TenorOpsHR & Team Cost Calculators · Labor Cost Estimator
Free Employee Labor Cost Calculator | Annual, Monthly & Loaded Hourly Rate
Calculate total employee labor costs including base wages, payroll taxes, overtime, health insurance, PTO, and overhead in Easy or Advanced Mode.
Basic & Advanced Details
Employee Labor Cost Inputs
Results
Annual & Monthly Labor Cost
Step-by-step guide
How to Use the Cost of Employee Labor Calculator
- 1Choose Easy Mode or Advanced Mode
Use Easy Mode for base wages and payroll taxes, or switch to Advanced Mode to include overtime, health benefits, PTO, and overhead.
- 2Enter hourly wage, annual hours, and payroll tax %
Full-time employees typically work 40 hours/week (2,080 hours/year) with 7.65% FICA payroll tax.
- 3Review Yearly, Monthly, and True Hourly Cost
See the total loaded cost per employee and optional target billing rate.
Formula & methodology
How Total Employee Labor Cost Is Calculated
Combining direct wages, statutory payroll taxes, benefits, overtime, and overhead reveals the true annual cost of an employee:
Base Wages = Hourly Rate × 2,080 hrs ($20 × 2,080 = $41,600) Overtime + Taxes + Health + PTO = $3,000 + $3,181.20 + $6,000 + $3,328 = $15,509.20 Indirect + Overhead Allocation = $10,000 + $15,000 = $25,000 Total Yearly Labor Cost = $82,109.20 ($6,842.43/month)
Common questions
Frequently Asked Questions
How much more does an employee cost beyond their base hourly wage?
Mandatory payroll taxes, workers' compensation, health insurance, and PTO typically add 20% to 40% to base pay. Including facility and administrative overhead can bring total cost to 1.5x–2.0x base wage.
Why are 2,080 hours used for annual full-time calculations?
40 hours per week multiplied by 52 weeks in a year equals 2,080 paid hours.
What is the difference between direct and indirect labor?
Direct labor covers staff who prepare food, serve guests, or complete billable client jobs; indirect labor covers support roles like administration, HR, and accounting.
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