Enter the actual hours worked, the actual rate paid, and the standard rate pay into the calculator to determine the labor rate variance.

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## Labor Rate Variance Formula

The following formula is used to calculate the labor rate variance.

LRV = H * (AR – SR)

- Where LRV is the labor rate variance ($)
- H is the total hours worked (hrs)
- AR is the actual rate paid ($/hr)
- SR is the standard rate ($/hr)

## Labor Rate Variance Definition

A labor rate variance is a measure between the total amount paid for labor and the standard amount paid.

## Labor Rate Variance Example

How to calculate the labor rate variance?

**First, determine the actual hours work.**Measure the total hours worked by the worker or group.

**Next, determine the rate paid.**Determine the actual rate paid for this work in $/hr.

**Next, determine the standard rate.**Determine what the standard or industry rate typically is for the labor being performed.

**Finally, calculate the labor rate variance.**Using the 3 values from steps 1-3, calculate the labor rate variance using the formula or calculate above.

## FAQ

**What is labor rate variance?**

Labor rate variance is the total difference between the total paid amount for a certain amount of labor and the standard amount that the labor usually commands.