Labor cost calculator for contractors

More than the wage. With this page’s example inputs, a carpenter paid the national median of $29.12 an hour (BLS, May 2025) costs $59.28 an hour to break even once payroll taxes, workers’ comp, benefits, unbilled time and overhead are added. Billing $74.10 an hour earns a 20% margin. Your numbers will differ, so swap in your own.

Everything that comes with an hour of wages: employer payroll taxes (6.2% Social Security plus 1.45% Medicare, 7.65% together), federal and state unemployment taxes, workers’ comp and benefits. This calculator adds those first, then unbilled time and overhead, to reach a fully burdened labor rate. How to calculate your true labor rate walks through each step.

Divide your break-even rate by one minus your target margin. With the example numbers, $59.28 ÷ 0.80 = $74.10 an hour at a 20% margin. Break-even is the worker’s yearly cost plus their share of overhead, divided by the hours you can bill. ECHOPS job costing reports then show labor and profit per job, so you can check the rate against real work.

The national median wage for HVAC mechanics and installers was $29.33 an hour in the Bureau of Labor Statistics’ May 2025 estimates. That’s what the worker earns, not what you bill. Add payroll taxes, insurance, benefits, unbilled time, overhead and margin in this labor rate calculator to get a billing rate. Running a shop? See ECHOPS for HVAC.

Yes. Put in what you want to pay yourself as the wage, along with your own taxes, insurance, benefits and overhead, and count only the hours you can bill. Owners who estimate, sell and drive between jobs often bill fewer hours than they work, so get that number right before you trust the rate.