Contractor Finance Glossary
What is Burdened Labor Rate?
Also called: loaded labor rate, labor burden
The burdened labor rate is the true hourly cost of an employee including base wage plus payroll taxes, workers compensation, benefits, and other employment costs, not just the wage on their paycheck.
Job costing is only as honest as the labor rate behind it. Costing a technician at their base wage understates job cost and overstates margin, which is why so many jobs look profitable on paper and are not.
Field roles carry a heavier burden than office roles, largely because workers compensation is expensive for trades. Using a blended or unburdened rate hides the difference. The burdened rate is what belongs in every job cost, every estimate, and every break-even calculation.
How it is calculated
Burdened rate = base hourly wage times (1 plus the burden rate), where the burden rate sums payroll taxes, workers comp, benefits, and other employment costs as a percentage of wage. Field roles commonly run 38% to 45%; office roles 25% to 30%.
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