How Labor Burden Is Worked Out
An employee's wage is only part of what you pay. Labor burden adds the employer taxes, insurance, and benefits on top, and the hourly rate follows from the total.
1
Annual Gross Pay
Wage × regular hours, plus wage × 1.5 × overtime hours. At $22 and 2,080 hours, gross pay is $45,760.
2
Employer Taxes With Caps
Social Security (6.2% to $184,500), Medicare (1.45%), FUTA on the first $7,000, and state tax on your state's wage base.
3
Insurance and Benefits
Workers' comp per $100 of payroll, general liability per $1,000, health, retirement match, and other employer costs.
4
Burden and Hourly Rate
Burden % = additional costs ÷ gross pay. Hourly cost = (gross pay + additional costs) ÷ your chosen hours.
2026 Employer Payroll Tax Reference
These federal figures are built into the calculator. State unemployment tax is not, because rates and wage bases differ by state and by employer.
| Tax |
Employer Rate |
Wage Limit |
Maximum per Employee |
| Social Security | 6.2% | $184,500 | $11,439.00 |
| Medicare | 1.45% | None | No cap |
| FUTA, net of full credit | 0.6% | First $7,000 | $42.00 |
| FUTA, no credit | 6.0% | First $7,000 | $420.00 |
| State unemployment (SUTA) | Set by your state | Set by your state | Depends on your rate |
| Additional Medicare Tax | No employer share | Employee-only | Not an employer cost |
Social Security and Medicare per IRS Topic 751. FUTA per IRS: 6.0% of the first $7,000, reduced by a credit of up to 5.4% for eligible employers. Maximums are rate times wage limit.
Taxes that stop at a wage limit do not scale with pay. This is why a flat 7.65% plus 6.0% FUTA on every dollar overstates burden for higher-paid workers.
What BLS Data Says About Benefit Costs
The Bureau of Labor Statistics tracks employer compensation costs. Use these numbers as context, not as your rate, because BLS counts items a contractor may handle differently.
| Group |
Wages per Hour |
Benefits per Hour |
Benefits, % of Total Pay |
Benefits, % of Wages |
| Private industry, June 2026 | $32.82 | $14.07 | 30.0% | 42.9% |
| Natural resources, construction, and maintenance, December 2024 | $31.42 | $14.99 | 32.3% | 47.7% |
Source: BLS Employer Costs for Employee Compensation. "% of wages" is benefits divided by wages, calculated here. BLS benefits include paid leave, insurance, retirement, and legally required benefits.
BLS uses total compensation as its base, while burden here uses gross pay. That is why the two percentages differ, and why you should not copy either into a bid without checking your own payroll.
Why a Wage Is Not the Cost of Labor
A bid built on a $22 hourly wage loses money, because the employer also pays taxes, insurance, and benefits on that wage. Labor burden puts those costs back into the estimate.
Keep burden separate from shared business expenses. Office rent and owner salaries belong in overhead, which you can price with the construction overhead calculator.
Once you have a burdened hourly rate, apply it to the hours in your job. The construction labor cost calculator multiplies hours by rate across a crew.
For concrete work specifically, labor is often the largest line after material. See the concrete labor cost calculator and use your burdened rate in place of raw wages.
The burdened rate is cost, not price. Add profit with the contractor markup calculator or compare it to a target with the construction profit margin calculator.
Side-by-Side Employee Comparisons
These sample calculations compare two workers and one crew bid. The insurance, state tax, and benefit rates are hypothetical samples for the math, not market rates. Replace them with your policy and payroll records.
🧱 Laborer, $22 per Hour
Hours: 2,080 regular, 0 overtime
Sample rates: comp $8.00 per $100, GL $3.00 per $1,000, SUTA 3.0% on $10,000
Benefits: health $400 per month
Gross pay: 22 × 2,080 = $45,760
FICA (7.65%): $3,500.64
FUTA + SUTA: $42.00 + $300.00
Comp + GL: $3,660.80 + $137.28
Health: $4,800.00
Burden: $12,440.72 = 27.2%
Cost per paid hour: $58,200.72 ÷ 2,080 = $27.98
The $22 worker costs $27.98 per paid hour, or $5.98 more than the wage.
🛠️ Finisher, $32 per Hour With Overtime
Hours: 2,080 regular, 100 overtime
Sample rates: same as the laborer
Benefits: health $400 per month, 3% retirement match
Gross pay: 66,560 + 4,800 = $71,360
FICA (7.65%): $5,459.04
FUTA + SUTA: $42.00 + $300.00
Comp + GL: $5,708.80 + $214.08
Health + match: $4,800.00 + $2,140.80
Burden: $18,664.72 = 26.2%
Cost per paid hour: $90,024.72 ÷ 2,180 = $41.30
Burden is lower as a percentage because FUTA and SUTA are capped dollar amounts, even though total cost is higher.
📋 Crew Bid Using Wages Alone
Crew: 4 laborers from the first card
Job: 80 hours each, 320 job hours total
Rate used: $27.98 per hour
Wages only: 320 × $22 = $7,040
Burdened cost: 320 × $27.98 = $8,954
Gap: about $1,914, or 27.2% of wages
A bid priced from wages alone starts $1,914 short before overhead or profit.
Using the Rate in a Real Bid
⏱️
Pick the Right Hours
Paid hours match payroll, worked hours remove paid leave, and job hours remove non-job time. Apply the rate to the same kind of hours.
📈
Overtime Cost
Non-exempt workers generally earn at least 1.5 times their regular rate after 40 hours in a workweek. Use actual overtime pay in the payroll total.
🏛️
Prevailing Wage Jobs
On Davis-Bacon work, the prevailing wage combines the basic hourly rate and listed fringe benefits. Check the contract's wage determination.
🤝
Subcontractors
Subcontracted work is a job cost, but do not add your employee burden percentage to the invoice. Confirm the worker's actual status first.
Build the rate into your bid with the contractor bid calculator, then roll it up in the project budget calculator.
For a full concrete job that mixes labor, material, and equipment, use the concrete project estimator.
Sources and Method
- IRS Topic 751, Social Security and Medicare Withholding Rates (2026 employer rates of 6.2% and 1.45%, $184,500 wage base): irs.gov
- IRS, FUTA Credit Reduction (6.0% on the first $7,000, credit of up to 5.4%, net 0.6%): irs.gov
- BLS, Employer Costs for Employee Compensation, June 2026 (private industry $32.82 wages and $14.07 benefits per hour worked): bls.gov
- BLS, Employer Costs for Employee Compensation, December 2024 release (natural resources, construction, and maintenance group): bls.gov
- ClockShark, Labor Burden Calculator (formula, wage-limit treatment, paid, worked, and job hours): clockshark.com
- busybusy, Labor Burden Calculator (workers' comp per $100 and general liability per $1,000 of payroll): busybusy.com
Burden = additional employer costs ÷ gross pay. Annual employment cost = gross pay + additional costs. Insurance and state tax inputs come from you, and the calculator does not assume them.
Last reviewed: October 2026. Reviewed by site author.
⚠️ Disclaimer
This calculator provides estimates for planning purposes. For permitted structural work, foundations, multi-story construction, retaining walls over 4 feet, and commercial projects, calculations must be verified by a licensed structural engineer per IBC 2024 §1604. ConcreteCalculate.com is not liable for structural decisions made from these estimates.
This tool is not tax, payroll, insurance, or legal advice. Confirm tax rates, wage bases, and insurance terms with your accountant, payroll provider, and carrier.
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