Labor Burden

Labor burden is a cumulative analysis of actual costs to have labor.   It includes the actual compensation paid to the employee, associated employer taxes, benefits and legal compliance.   Some companies will add the cost of the human resources department.

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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