Labor Burden Calculator: Avoid the "Fake Profit" Trap
The most common way to fall into the "Fake Profit" trap is bidding wages instead of cost-to-hire. Every estimate should use the fully-burdened rate, not the raw wage.
Labor Burden Calculator
Calculate the true fully-burdened hourly cost of your crew.
Cost Breakdown
Always use this number for job costing.
Diagnostic: Identifying the "Burden Blind Spot"
Level 1 of the Trap
Labor burden is the difference between what you pay an employee and what they actually cost your business. For every dollar in wages, a remodeling contractor typically spends $1.25–$1.45 in total labor cost.
Mandatory Adjustment
If your burden multiplier is >40%, your [Job ROI](/calculators/remodeling-roi-calculator/) will appear healthy while your net profit disappears. **Action:** Recalculate your [Markup Multiplier](/calculators/markup-vs-margin-calculator/) using your new fully-burdened rate.
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