Enter the total labor sales ($) and the total labor hours (hrs) into the Effective Labor Rate Calculator. The calculator will evaluate the Effective Labor Rate. 

Effective Labor Rate Formula

The following two example problems outline the steps and information needed to calculate the Effective Labor Rate.

ELR = LS / LH

  • Where ELR is the Effective Labor Rate ($/hr)
  • LS is the total labor sales ($) 
  • LH is the total labor hours (hrs) 

How to Calculate Effective Labor Rate?

The following example problems outline how to calculate Effective Labor Rate.

Example Problem #1:

  1. First, determine the total labor sales ($). 
    • The total labor sales ($) is given as: 500.
  2. Next, determine the total labor hours (hrs). 
    • The total labor hours (hrs) is provided as: 5.
  3. Finally, calculate the Effective Labor Rate using the equation above: 

ELR = LS / LH

The values provided above are inserted into the equation below and computed.

ELR = 500 / 5 = 100.00 ($/hr)


Example Problem #2: 

For this problem, the variables required are provided below:

total labor sales ($) = 600

total labor hours (hrs) = 20

Test your knowledge using the equation and check your answer with the calculator..

ELR = LS / LH = ?