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Construction

Labor Cost Calculator

Easily estimate your total labor expenses—including hourly wages, taxes, insurance, and benefits—for individual employees or your entire business. Use this calculator to understand your true hourly labor cost, plan staffing budgets, and evaluate workforce efficiency.

Employee Specific Costs — per employee

Additional Annual Costs — per employee

Business Wide Inputs

Used only to compute the labor cost percentage

Labor Cost Summary

Gross Hours Per Year per employee
0.00
Gross Pay per employee
$0.00
Hours Not Worked per employee
0.00
Net Hours Worked per employee
0.00
Other Annual Costs per employee
$0.00
Annual Payroll Labor Cost per employee
$0.00
Actual Hourly Labor Cost per employee
$0.00
Total Annual Payroll Labor Cost all employees
$0.00
Labor Cost Percentage
0.00%

Table of Content

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Why Labor Cost Calculators Matter

Labor often represents the largest controllable cost in a business.

Accurately estimating it helps owners, managers, and accountants set fair pricing, manage margins, and forecast profit more reliably.

Key uses:

  • Calculate total annual and hourly labor costs (including overhead)

  • Compare costs per employee and across teams

  • Estimate labor-to-revenue ratio for financial analysis

  • Identify cost-saving opportunities in payroll and operations

How the Calculator Works

1️. Enter employee-specific details:

  • Hourly pay rate

  • Gross weekly hours

  • Days absent per year

  • Daily working hours

2️. Add annual additional costs:

  • Taxes, insurance, benefits, overtime, and supplies

3️. Enter business-wide data:

  • Total employees

  • Total annual revenue

4️. Get instant results:

  • Annual payroll labor cost per employee

  • Actual hourly labor cost

  • Total annual payroll cost

  • Labor cost percentage (as part of revenue)

Example Calculation

Inputs:

  • Hourly rate: $10

  • Hours per week: 40

  • Days absent: 15

  • Annual costs: taxes $1,500, insurance $1,000, benefits $800, overtime $400, supplies $200

  • Employees: 5

  • Revenue: $80,000

Results:

  • Gross hours/year: 2,080

  • Gross pay: $20,800

  • Net hours worked: 1,960

  • Annual payroll cost/employee: $24,700

  • Total payroll (5 employees): $123,500

  • Labor cost % of revenue: ≈154%

Pro Tip:

A healthy labor-to-revenue ratio depends on industry, but most construction and service-based businesses aim for 20–35%.
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Benefits & Limitations

Benefits

  • Helps project managers and CFOs understand true labor costs

  • Useful for forecasting, pricing, and workforce planning

  • Includes overhead (benefits, insurance, overtime, and supplies)

Limitations

  • Results are estimates—does not include taxes varying by state/country

  • Assumes consistent weekly hours and similar pay rates

  • Use with actual payroll data for precise financial modeling

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