Loaded Labor Rate Calculator

The "loaded labor rate" accounts for: payroll burden (FICA 7.65% + FUTA/SUTA + workers comp + state unemployment ≈ 18-30%), benefits (health insurance, retirement, paid time off ≈ 15-25%), overhead (vehicle, insurance, tools, supervision, office, software ≈ 20-40%), and billable efficiency (worker is paid 8 hours/day but billable for only 6-6.5 actual job-site hours ≈ 75% efficiency). A $25/hr wage becomes ~$50-60/hr loaded cost before profit.

Divide loaded cost by (1 - profit margin). If your loaded cost is $50/hr and you want a 15% margin, billing rate = $50 / (1 - 0.15) = $58.82/hr - this is the margin method the calculator uses. Do not multiply by (1 + margin): that gives a markup of $57.50, which leaves you a smaller margin than intended. Margin is a percentage of revenue while markup is a percentage of cost, so most pros price on margin. Industry rule of thumb: residential GC margins 15-25%, specialty trades 20-35%, design-build 30-40%.

Markup: profit divided by cost. $100 cost + 20% markup = $120 sell price. Margin: profit divided by sell price. $120 sell price - $100 cost = $20 / $120 = 16.7% margin. So 20% markup = 16.7% margin, NOT 20% margin. This is the most common pricing mistake new contractors make - they apply 20% markup expecting 20% margin and lose 3-4 percentage points of profit per job.

Subtract from 40 paid hours: drive time between jobs, paid lunch/break, weather delays, shop time, supply runs, callbacks (rework that wasn't billed), training, paperwork. Most field employees achieve 65-78% billable efficiency. Track via project-management software (Buildertrend, Knowify, ServiceTitan) which automatically allocates hours. If efficiency drops below 65%, root causes are usually: too-distant job locations, frequent supply-runs (set up better stocking), excessive callbacks (quality control issue).

Fully load each crew member separately, then bill per crew-hour. A lead plus a helper might blend to $145-$175/hr on residential work. If every member has the same loaded cost, just multiply by headcount; if their costs differ, sum the individual loaded costs and apply your profit margin once to the total.

70-80% is typical. Pushing from 70% to 80% can lift net profit 30% or more, because each extra billed hour is almost pure profit once your fixed costs are already covered.

A lot. California workers comp runs 8-15% of payroll versus 4-8% in Texas, and coastal rents push overhead to 35-45%. Rebuild your rate with local burden and overhead figures rather than borrowing a number from another market.

At least quarterly, and any time wages, insurance, or fuel rise or a fiscal year closes. A rate that hasn't been updated in 12 months has usually given back a good chunk of its margin.