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What does an employee really cost you?
The wage is only part of it. Add payroll taxes, workers comp, and benefits, then account for the non-billable part of the day, and see your true cost per billable hour, the number your billing rate actually has to beat.
What this measures
Labor burden is everything you pay for a worker beyond the base wage: payroll taxes, workers comp, and benefits. Bidding off the base wage without the burden can make a job that looked profitable come in thin. This shows your fully-loaded cost per hour, and the truer number, your cost per BILLABLE hour, once you account for the non-billable part of the day.
Build the true cost of an hour
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What this means for you
Compare base wage with loaded cost per entered billable hour. A 50 to 100%+ difference is a possible scenario, not measured prevalence. The 61% default assumes 61 of every 100 paid hours are billable. Change it to match your team. Level's separate billing-capture measure compares invoiced hours with job-logged hours, so it cannot be used as this utilization input.
Quick win this week
Take your lowest-paid field wage, run it through this, and look at the cost-per-billable-hour number. If your billing rate does not cover it plus the chosen margin, review pricing alongside overhead, materials and job mix; this check alone does not identify the cause.
Strategic fix
Recompute your fully-loaded cost per billable hour whenever wages, workers-comp mods, or benefits change, and rebuild your billing rates off that number, not the wage. Review workers-comp class codes and experience mod annually; rates can vary by class code and experience mod.
Are your billing rates built on real labor cost?
We rebuild your fully-loaded cost per billable hour from your actual payroll, burden, and utilization, then show you which rates are underwater.
No commitment. Real numbers, not generic advice.
Frequently asked questions
How do you calculate labor burden?
Labor burden is everything you pay for a worker beyond the base wage: payroll taxes (FICA 7.65% on wages subject to both components, with the Social Security wage-base limit, plus applicable federal and state unemployment), workers compensation, and benefits (health, retirement, PTO). Add those to the base wage to get the fully-loaded hourly cost. Burden rate is the burden divided by the base wage, expressed as a percent.
What is a typical labor burden rate for contractors?
The 30 to 50% burden band is a planning reference on top of base wage, not a measured distribution. Workers-comp class rates, benefits, jurisdiction and included costs vary. A result below 30% is a reason to check coverage, not proof that costs are missing.
Why should I price off cost per billable hour instead of the wage?
Because the fully-loaded cost is paid for the whole day, but only part of the day is billable, the calculator starts with a chosen 61% billable share of paid hours. This is not Level billing capture, which compares invoiced with job-logged hours. Dividing loaded cost by your measured billable share gives scenario cost per billable hour. A 50 to 100%+ premium to wage is a possible scenario, not a measured prevalence claim.
Want your real loaded labor cost from your own payroll?
We pull your actual wages, burden, and utilization and build your fully-loaded cost per billable hour by role, then show you which billing rates are underwater against it.
Operating review
Questions before adding a role
The margin, cash, and operating questions we check first when reviewing your numbers.
Does backlog require another person or a better handoff?
Booked work, available crew hours and invoice-ready work are different capacity measures.
What work would a supervisor release from the owner or crew?
A title and salary do not establish what capacity a new role creates.
Is the back office missing a bookkeeper, controller or decision owner?
Transaction processing, close review and operating decisions are separate responsibilities.
Simple pricing
Three tiers, one ladder.
$500+/mo
Bookkeeping
The clean data layer: monthly books, reconciliations, and organized financials AI can work with.
$1,500-$5,000/mo
Scale
The full AI operating layer: custom agents, weekly actions, and benchmarks to grow margin per hour.
Custom
Platform / Multi-Office
Multi-branch benchmarking and scorecards for PE-backed and multi-location groups.
Price off real labor cost, not the wage
Drop your info and the Level team will build your fully-loaded cost per billable hour from your actual payroll.
No commitment. Real numbers, not generic advice.