Calculate loaded hourly labor cost, a margin-based billable rate, or affordable salary from payroll burden, benefits, overhead, and productive hours.

USD budgeting estimate. Blank cost additions mean zero; avoid counting the same expense twice. Hours must match the cost-recovery basis.

Use productive hours for labor cost, or billable hours for pricing. This is not automatically paid hours.

Optional settings

Enter your estimated employer expense rate; no tax rate is assumed.

Optional. Blank omits project totals.

Loaded Labor Rate Formula

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

LLR = BP × (1 + p / 100) + B + O

Variables:

  • LLR is the loaded labor rate ($ per hour)
  • BP is base pay (USD/hour); p is employer payroll burden as a percentage of base pay (blank means 0%).
  • B is the benefits ($ per hour)
  • O is the overhead ($ per hour)

In the hourly-components mode, add base pay, employer payroll burden, benefits and allocated overhead on the same hourly basis. The annual-salary modes divide the entered annual total by your productive or billable cost-recovery hours. Do not double-count expenses. Billable pricing uses cost ÷ (1 − target margin); margin is a share of revenue, not a markup on cost. All monetary inputs use USD without currency conversion.

What is a Loaded Labor Rate?

The loaded labor rate is the total hourly cost to employ a worker, including base salary, benefits, and overhead. This rate is often used in project costing and budgeting to estimate the true cost of labor. It provides a more accurate picture of employment costs than just the hourly wage or salary.

How to Calculate Loaded Labor Rate?

The following steps outline how to calculate the Loaded Labor Rate.

  1. First, determine the base pay (BP) of the employee in dollars per hour.
  2. Next, determine the hourly cost of benefits (B) for the employee.
  3. Next, determine the hourly overhead cost (O) associated with the employee.
  4. Use LLR = BP × (1 + p/100) + B + O; the example below uses p = 0% and totals $40.00/hour.
  5. Finally, calculate the Loaded Labor Rate (LLR) in dollars per hour.
  6. After inserting the variables and calculating the result, check your answer with the calculator above.

Example Problem :

Use the following variables as an example problem to test your knowledge.

Base Pay (BP) = $25.00 per hour

Benefits (B) = $5.00 per hour

Overhead (O) = $10.00 per hour