Where do calculations run?

This tool runs in your browser for quick estimates. Use consistent units and verify critical figures independently.

Vendora

Small business calculator

Labor Cost Calculator

Estimate a loaded hourly cost: enter gross pay rate per hour, hours worked per year, and employer taxes and benefits as a percent of wages. You get effective hourly cost and total annual labor cost before allocations.

Inputs

Estimate annual payroll labor cost and loaded hourly labor cost. Gross hours come from weekly hours; net hours subtract time not worked (e.g., absence days). Burden adds employer taxes and benefits as a percent of wages.

Pay rate Wage to the employee before employer burden.

Gross hours per week Scheduled hours per week before absences.

Absent days per year Vacation, sick days, and other days not worked (in days).

Employer burden (% of wages) Taxes, benefits, and other load as % of gross wages.

Gross hours per year Calculated as gross hours per week × 52.

Hours not worked per year Absent days × (gross hours per week ÷ 5).

Net hours worked Gross hours per year minus hours not worked.

Gross pay Pay rate × net hours worked.

Hourly labor cost Annual payroll labor cost ÷ net hours worked.

Annual payroll labor cost Gross pay × (1 + burden ÷ 100).

Results

Loaded hourly cost = pay rate × (1 + burden ÷ 100). Annual labor cost = loaded hourly cost × hours per year.

Hourly labor cost —

Annual payroll labor cost —

Example

Pay rate is $25 per hour, hours per year are 2,080, and employer burden is 18%. Loaded hourly cost is $25 × 1.18 = $29.50. Annual labor cost is $29.50 × 2,080 = $61,360.

How it works

Loaded hourly cost = gross pay rate per hour × (1 + employer burden % ÷ 100). Annual labor cost = loaded hourly cost × hours worked per year. Burden must be between 0 and 100 percent. This is a planning estimate—confirm with payroll and tax advice.