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