{ "id": "labor-cost", "version": "fd3fc765b341", "status": "published", "name": "Labor Cost Calculator", "question": "What is my labor cost?", "summary": "Works out the labor cost of a job or pay period from workers, hours and the hourly wage plus a labor burden for payroll taxes and benefits, the cost per hour, and labor cost as a percent of sales.", "category": "finance", "subcategory": "business", "url": "https://www.acalculator.org/finance/labor-cost-calculator", "markdown": "https://www.acalculator.org/finance/labor-cost-calculator.md", "kind": "function", "method": "Wages = workers × hours each × hourly wage. Labor burden = wages × burden ÷ 100. Total labor cost = wages + labor burden. Cost per hour worked = total ÷ (workers × hours each). Labor cost percentage = total ÷ sales × 100.", "assumptions": [ "Every worker is paid the same wage for the same hours; overtime and a second wage go in a second run.", "The labor burden is one percent of wages for payroll taxes, insurance, paid leave and other benefits, as typed.", "Arithmetic is exact on the typed decimals; money shows to the cent and the percentage to 2 decimals, halves rounded up." ], "inputs": { "$schema": "https://json-schema.org/draft/2020-12/schema", "type": "object", "properties": { "workers": { "title": "Number of workers", "description": "How many people work the hours below, each at the same wage.", "type": "integer", "minimum": 1, "maximum": 1000000 }, "hours": { "title": "Hours each", "description": "Hours each worker is paid for in the period (a shift, a week, a job).", "type": "number", "minimum": 0.01, "maximum": 1000000 }, "wage": { "title": "Hourly wage", "description": "The pay for one hour, before tax.", "type": "number", "x-unit": "USD", "minimum": 0.01, "maximum": 1000000 }, "burden": { "title": "Labor burden", "description": "Payroll taxes, insurance, paid leave and other benefits, as a percent of wages: 7.65% covers Social Security and Medicare alone. Optional.", "type": "number", "x-unit": "percent", "minimum": 0, "maximum": 500 }, "sales": { "title": "Sales for the period", "description": "Revenue for the same period, for the labor cost percentage. Optional.", "type": "number", "x-unit": "USD", "minimum": 0, "maximum": 1000000000000 } } }, "outputs": { "total": { "label": "Total labor cost", "description": "Wages + labor burden.", "format": "money" }, "wages": { "label": "Wages", "description": "Workers × hours each × hourly wage.", "format": "money" }, "extra": { "label": "Labor burden", "description": "Wages × labor burden ÷ 100.", "format": "money" }, "perHour": { "label": "Cost per hour worked", "description": "Total labor cost ÷ (workers × hours each): the hourly wage plus its burden.", "format": "money" }, "percent": { "label": "Labor cost percentage", "description": "Total labor cost ÷ sales × 100. Shown when sales of more than $0 are typed.", "format": "percent" } }, "defaultAnswer": { "inputs": { "workers": 5, "hours": 40, "wage": 18, "burden": 25, "sales": 15000 }, "outputs": { "total": 4500, "wages": 3600, "extra": 900, "perHour": 22.5, "percent": 30 }, "text": "5 workers for 40 hours each at $18.00 an hour cost $4,500.00 in labor, or $22.50 per hour worked." }, "examples": [ { "given": { "workers": 5, "hours": 40, "wage": 18, "burden": 25, "sales": 15000 }, "expect": { "wages": 3600, "extra": 900, "total": 4500, "perHour": 22.5, "percent": 30 }, "source": "hand calculation in content.mdx; Python 3 check in docs/progress/WP-137/xcheck.py: 5 × 40 × 18 = 3,600; 25% = 900; 4,500 ÷ 15,000 = 30%" }, { "given": { "workers": 1, "hours": 8, "wage": 7.25, "burden": 7.65 }, "expect": { "wages": 58, "extra": 4.437, "total": 62.437, "perHour": 7.804625 }, "source": "Beth Egan, Penn State, Introduction to Food Production and Service, Lesson 4.2, Managing Labor Costs (labor cost percentage = labor dollars ÷ sales × 100; employer taxes of 7.65% on an $58 day), https://workforce.libretexts.org/Bookshelves/Food_Production_Service_and_Culinary_Arts/Introduction_to_Food_Production_and_Service_(Egan)/04:_Managing_and_Controlling_Operating_Expenses/4.02:_Managing_Labor_Costs: 8 hours × $7.25 = $58.00; employer taxes 7.65% = $4.44" }, { "given": { "workers": 1, "hours": 1, "wage": 437.3, "burden": 0, "sales": 1500.25 }, "expect": { "total": 437.3, "percent": 29.148475254124314 }, "source": "Beth Egan, Penn State, Introduction to Food Production and Service, Lesson 4.2, Managing Labor Costs (labor cost percentage = labor dollars ÷ sales × 100; employer taxes of 7.65% on an $58 day), https://workforce.libretexts.org/Bookshelves/Food_Production_Service_and_Culinary_Arts/Introduction_to_Food_Production_and_Service_(Egan)/04:_Managing_and_Controlling_Operating_Expenses/4.02:_Managing_Labor_Costs: $437.30 ÷ $1,500.25 × 100 = 29.1%" } ], "sources": [ "Beth Egan, Penn State, Introduction to Food Production and Service (CC BY 4.0), Lesson 4.2, Managing Labor Costs: labor costs include wages and salaries, overtime and fringe benefits; labor cost percentage = labor dollars ÷ sales × 100 ($437.30 ÷ $1,500.25 × 100 = 29.1%); a part-time employee’s day of 8 hours at $7.25 ($58.00) with 7.65% employer taxes ($4.44). https://workforce.libretexts.org/Bookshelves/Food_Production_Service_and_Culinary_Arts/Introduction_to_Food_Production_and_Service_(Egan)/04:_Managing_and_Controlling_Operating_Expenses/4.02:_Managing_Labor_Costs (retrieved 2026-10-19)", "U.S. Bureau of Labor Statistics, Employer Costs for Employee Compensation, June 2026: private industry $46.89 an hour in total, $32.82 wages and salaries, $14.07 benefits. https://www.bls.gov/news.release/ecec.nr0.htm (retrieved 2026-10-19)", "Internal Revenue Service, Topic No. 751, Social Security and Medicare withholding rates: the employer pays 6.2% Social Security tax and 1.45% Medicare tax. https://www.irs.gov/taxtopics/tc751 (retrieved 2026-10-19)" ], "related": [ "employee-cost", "total-compensation", "overtime", "payroll-tax" ], "changelog": [] }