Labor burden is every employment cost beyond the wage: payroll taxes, workers' compensation, liability insurance, benefits, PTO, training, tools and non-billable time. Burdened rate = (annual wages + annual burden costs) / annual billable hours. In construction the burdened rate is commonly 1.3x to 1.7x the base wage.
Burden rate percentage = total annual burden costs / total annual wages. Burdened hourly cost = annual total cost / actual billable hours worked. The second number is the one you estimate with.
Everything you pay because the person is employed, plus every hour you pay for that you cannot bill.
A carpenter at $30/hour works 2,080 paid hours, of which 1,700 are actually billable. Wages are $62,400. Burden costs total $24,000. Total annual cost is $86,400. Divide by 1,700 billable hours and the true cost is $50.82 per billable hour, which is 1.69x the wage. Estimating at $30 loses $20.82 every hour.
Two companies with identical burden percentages can have very different real costs if one bills 1,900 hours a year and the other bills 1,500. Track actual billable hours per employee before you trust any burden multiplier.
WinkScope tracks GPS-verified clock-in and clock-out, separates billable from non-billable hours, stores a burdened cost rate per employee, and posts real labor cost against each project so estimated versus actual labor is visible per job.
Most construction employers land between 30% and 70% on top of wages, depending heavily on workers' compensation class, benefits offered and how many paid hours are actually billable.
No. A 1099 subcontractor's quoted price already includes their own burden. You mark it up rather than burdening it.