Labor Rate Calculator

Calculate your labor rate based on hourly wage, benefits, and overhead costs

Input Parameters

Calculation Results

Calculation Formula

Labor Rate = (Hourly Wage + Benefits Cost) × (1 + Overhead Rate) × (1 + Sales Tax Rate)

Where:
Hourly Wage: Base pay per hour
Benefits Cost: Costs per hour for employee benefits
Overhead Rate: Additional business expenses as percentage
Sales Tax Rate: Tax applied to labor services

Gross Labor Cost per Hour ($):

$0.00

Overhead Cost per Hour ($):

$0.00

Sales Tax per Hour ($):

$0.00

Total Labor Rate ($):

$0.00

Labor Rate Calculator Calculator Usage Guide

Learn how to use the Labor Rate Calculator to determine your professional rates

How to Use This Calculator

  1. Enter your base hourly wage (what you pay yourself per hour)
  2. Include any additional benefits costs you pay per hour (health insurance, retirement contributions, etc.)
  3. Set your overhead rate (typically 20-50% of labor costs for small businesses)
  4. Enter your local sales tax rate if applicable to your services
  5. Click "Calculate" to see your total labor rate

Understanding the Results

The calculator shows your total labor rate including all costs. This rate should be used to price your services to ensure profitability while covering all expenses.

Practical Applications

  • Determining your professional service rates
  • Setting competitive prices for labor-intensive projects
  • Creating accurate quotes for clients
  • Understanding your true cost of providing services

Example Scenario

Suppose you have a base hourly wage of $50, benefit costs of $10 per hour, overhead at 30%, and a sales tax rate of 8.25%.

Your calculation would be:

  • Gross Labor Cost: $50 + $10 = $60
  • Overhead: $60 × 0.30 = $18
  • Sales Tax: ($60 + $18) × 0.0825 = $6.63
  • Total Rate: $60 + $18 + $6.63 = $84.63 per hour