Formula Reference
What counts as burden
Burden is what it costs to employ someone beyond the wage on their cheque: payroll taxes, unemployment insurance, workers' compensation, health cover, retirement, paid time off, union or trust contributions. It is not overhead. The office rent, the estimator's salary, general liability, the truck that is not assigned to a crew and the software subscriptions all have to be recovered too, but they are recovered as a percentage on the job, not as a rate per field hour. Mixing the two is how a contractor ends up double-counting cost in one place and missing it in another.
The parts you can look up
Two of the components have published rates. IRS Topic 751 puts the employer's Social Security tax at 6.2 per cent and Medicare at 1.45 per cent, which is the 7.65 per cent FICA line here; Social Security stops at a wage base of $184,500 for 2026, and Medicare has no cap. IRS Topic 759 puts FUTA at 6.0 per cent of the first $7,000 of each employee's wages in the year, reduced to 0.6 per cent where the full 5.4 per cent state credit applies.
State unemployment tax is neither. Each state sets its own rate schedule and its own taxable wage base, and your rate moves with your claims experience. The state figures in the dropdown are new-employer style rates โ a placeholder while you find the real one, which is on the rate notice your state sends you each year.
Workers' comp is the number you cannot look up
Comp rates are set per state by the rating bureau, quoted per $100 of payroll against a job classification, then multiplied by your experience modification. The same trade can differ by a factor of several between states and between two contractors in the same state. There is no national average worth publishing. Published rates for roofing in the highest-cost states run several times what a low-cost state charges, and roofing is exactly the class where being low costs most, so a single national number would mislead worst on the trade that can least afford it. This calculator does not quote one: the rating bureaus block automated access, so there is no filed rate we could read and stand behind. The rate on your policy declarations page is the only one that belongs in a bid.
What burden actually runs at
The Bureau of Labor Statistics measures this directly. In its Employer Costs for Employee Compensation release for March 2026, private-industry employers in the construction industry averaged $51.23 per hour worked in total compensation: $35.54 in wages and salaries and $15.69 in benefits. Benefits are therefore running at about 44 per cent of wages across the industry.
Of that $15.69, legally required benefits โ Social Security, Medicare, unemployment insurance and workers' comp โ account for $4.36, about 12 per cent of wages. The remaining thirty-odd points are paid leave ($2.61), supplemental pay ($2.48), insurance ($3.87) and retirement and savings ($2.37). Those are the boxes that start unticked on this page. If your burden comes out in the high teens, you have priced the taxes and the comp and nothing else, which is correct for a shop that offers no benefits and wrong for one that does.
Unemployment taxes stop, and this calculator stops with them. FUTA applies to the first $7,000 of each employee's wages in the year and each state's tax to its own base, so the unemployment cost of a worker who stays all year is a fixed annual amount rather than a constant hourly one. Both lines here are computed as that annual cost spread over the hours you enter: at $28 an hour over 2,080 hours FUTA works out at two cents an hour, which is the statutory $42 a year and not a penny more. Set the state wage base to your own โ bases vary by state and change annually. If you want the figure your own books produce, take last year's Form 940 and state filings, divide by last year's gross wages, and enter that as a custom percentage item.
What this output must not be used for
This is an estimating rate, not a payroll calculation and not tax advice. It does not compute what you owe. It applies the FUTA wage base and the state base you enter, but not credit reductions, experience-rating changes mid-year, or multi-state apportionment, and does not handle prevailing wage, fringe benefit offsets or multi-state employment, and does not know your experience modification. Rates and wage bases change every year. Before a burdened rate goes into a bid, check it against your own payroll records and your accountant โ a burden rate that is two points light on a labour-heavy job is a loss you find out about at closeout.
Frequently asked questions
Add up every employment cost above the wage โ employer payroll taxes, unemployment insurance, workers' compensation, health cover, retirement, paid time off โ and divide the total by the wage. A worker at $28 an hour carrying $3.90 of burden has a burdened rate of $31.90 and a burden of 13.9 per cent. Express each item per hour worked, not per hour paid, so paid time off lands on the hours that are actually productive. The result is an estimating rate, not a payroll figure: verify it against your own payroll records before you bid with it.
There is no single number, but there is a measured benchmark. The Bureau of Labor Statistics reports that in March 2026 private-industry employers in the construction industry paid $35.54 an hour in wages and $15.69 in benefits per hour worked โ benefits running at about 44 per cent of wages. Legally required benefits alone, meaning Social Security, Medicare, unemployment insurance and workers' comp, were $4.36 or about 12 per cent. A shop offering no health cover or paid leave will land near the lower figure and a fully benefited union shop above the higher one. Use your own payroll history rather than an industry average when the number is going into a bid.
Overhead. Office rent, estimating and administrative salaries, general liability and umbrella insurance, unassigned vehicles, software, marketing and interest are all real costs, but they are recovered as a markup on the job rather than as a rate per field hour. Small tools and consumables sit on the line between the two and should be handled one way or the other consistently. Profit is not burden either. Loading overhead into the burden rate double-counts it once you also apply an overhead and profit markup, and that error is easiest to spot by checking whether the same dollar appears twice on the estimate.
It is the wage plus the burden, so it depends on both and cannot be quoted as a single national figure. For scale, the Bureau of Labor Statistics puts total employer compensation cost in the construction industry at $51.23 per hour worked in March 2026, of which $35.54 was wages. That is an industry-wide average across all occupations and regions, not a rate for your crew: a helper in a low-wage state and a journeyman in a high-cost metro sit a long way either side of it. Calculate yours from your own wage and your own policy rates, then check it against payroll before pricing work off it.
Measured across the industry, benefit costs in construction ran at $15.69 per hour worked against $35.54 in wages in March 2026 according to the Bureau of Labor Statistics โ about 44 per cent. That figure includes paid leave, supplemental pay, insurance, retirement and legally required benefits together. Averages hide a wide spread, because workers' compensation rates vary by state, trade classification and experience modification, and because benefit packages differ enormously between shops. Treat it as a sanity check on your own calculated rate, not as a substitute for calculating it.
Statutory rates are quoted from IRS Topic no. 751, Social Security and Medicare withholding rates and IRS Topic no. 759, Form 940 and Federal Unemployment Tax. Industry compensation figures are from the U.S. Bureau of Labor Statistics, Employer Costs for Employee Compensation โ March 2026, Table 4, private industry, construction industry. The state unemployment rates in the dropdown and the workers' compensation trade presets are this calculator's own starting points, not published averages, and are identified as such above.