Contractor & construction
Construction Labour Cost Calculator
Works construction labour cost, where the burden and the classification both matter.
Result
Burden is on top of wage and typically runs 25–40% once payroll taxes, workers' compensation, insurance and paid time off are counted. Quoting on the bare wage is a reliable way to lose money.
Get a Free Business AuditHow the calculation works
Crew hours at burdened rates by trade, with the burden covering payroll taxes, workers compensation, liability allocation, paid time and training. Construction workers compensation rates vary enormously by trade, which means a single blended labour rate misprices work with a different trade mix.
What moves the number
- Workers compensation rate by trade classification.
- Hours by task and by trade.
- Overtime, which carries burden on the premium.
- Travel and mobilisation time.
Where this one goes wrong
Workers compensation classification varies by trade more than almost any other business cost, with roofing and structural work rated far above interior finish work, which means payroll has to be split by the work actually performed rather than all reported at one rate. A misclassification discovered at audit is corrected with arrears. Prevailing wage requirements also apply on many public projects and are a separate obligation from market rates.
Before you quote
- Split payroll by trade classification as actually performed.
- Apply burden to overtime premiums as well as base hours.
- Check prevailing wage requirements on public work.
Where the rules come from
Questions
About this calculator
Why does classification matter so much in construction?
Because workers compensation rates vary enormously by trade, with roofing and structural work rated far above interior finish. Reporting all payroll at one rate either overpays or produces an audit adjustment with arrears.
What does an hour of crew time actually cost?
Meaningfully more than the wage, once payroll taxes, workers compensation, liability allocation, paid time and training are counted. Estimating from wages understates every job in the same direction.
Do public projects have different wage rules?
Many do. Prevailing wage requirements apply on a range of publicly funded work and are a separate obligation from market rates, with record-keeping attached. They need checking before bidding rather than after award.
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How to use this calculator
- Crew size. Enter your own figure; the page starts at 3.
- Hours per day. Enter your own figure; the page starts at 8.
- Days on site. Enter your own figure; the page starts at 6.
- Average hourly wage ($). Enter your own figure; the page starts at $31.
- Labour burden (%). Enter your own figure; the page starts at 32%.
- Productive share of the day (%). Set-up, breaks and pack-down are paid but not productive.
The result updates as you type, so you can try a figure, see what it does to total labour cost, and change it back. Nothing you enter is sent anywhere or saved.
A worked example
These are the figures the calculator opens with. Every number in the results column below is produced by the same calculation the page runs, so you can follow it through before putting your own figures in.
What goes in
| Input | Value |
|---|---|
| Crew size | 3 |
| Hours per day | 8 |
| Days on site | 6 |
| Average hourly wage | $31 |
| Labour burden | 32% |
| Productive share of the day | 80% |
What comes out
| Result | Value |
|---|---|
| Total labour cost main result | $5,892 |
| Total man-hours | 144.0 |
| Burdened hourly cost | $40.92 |
| Cost per productive hour | $51.15 |
144.0 man-hours at $40.92 burdened costs $5,892. Allowing for 20% unproductive time, each productive hour really costs $51.15.
How sensitive the answer is
Holding everything else steady and changing only average hourly wage, this is what happens to total labour cost. It is worth knowing which of your inputs the answer actually hinges on, and which barely move it.
| Average hourly wage ($) | Total labour cost |
|---|---|
| $15.5 | $2,946 |
| $23.25 | $4,419 |
| $31 example above | $5,892 |
| $46.5 | $8,839 |
| $62 | $11,785 |
Every other input is held at the example value while this one changes, which is not how a real job behaves. Treat it as a guide to which number matters most, not as five separate quotes.
What each figure means
- Crew size
- A number, between 0 and 500, starting at 3.
- Hours per day
- A number, between 0 and 24, starting at 8.
- Days on site
- A number, between 0 and 2000, starting at 6.
- Average hourly wage ($)
- A money amount, starting at $31.
- Labour burden (%)
- A percentage, between 0 and 200, starting at 32%.
- Productive share of the day (%)
- Set-up, breaks and pack-down are paid but not productive.
What the results tell you
| Result | What it is |
|---|---|
| Total labour cost | The headline result. A money figure. |
| Total man-hours | A decimal figure. |
| Burdened hourly cost | A money figure. |
| Cost per productive hour | A money figure. |
Overhead is where these go wrong
Pricing and margin figures are only as good as the cost you put in. If your cost covers parts and wages but not the van, the insurance, the phone and the unbilled hours, the markup is paying for those before it becomes profit, and the margin you think you are making is not the one you are making.
Keep going
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