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:

- First, determine the total labor sales ($).
- The total labor sales ($) is given as: 500.

- Next, determine the total labor hours (hrs).
- The total labor hours (hrs) is provided as: 5.

- 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** = ?**