Labor Burden Rate

Labor burden rate is a cost accounting formula deriving the total costs for labor against a objective measure such as hours, units of production or parts of an assembly.   Labor burden is often a contractual issue especially related to government contracts.

Labor Burden in Construction – Proper Rate Formula

Fixed Costs

Labor burden in construction is a value added on to the respective hourly labor base wage to to determine the total cost per hour for a particular trade or employee. Labor burden rates are used extensively with estimating and recording actual results. The key to labor burden is that the rate is NOT universal. The value is different per company and in some cases per trade/employee. The rate is highly dependent on the various employee benefits provided and the structure of the organization.

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