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MasterElectricianHQ

Free electrical contractor calculator

What Does Your Electrician Really Cost Per Hour?

An employee's hourly wage is only part of the cost. Calculate employer payroll taxes, workers' compensation, unemployment, benefits, and the true cost of every billable field hour.

Calculate True Labor Cost

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A $30, $35, $40 or $50 an hour electrician never costs the company that figure. Employer payroll taxes, unemployment, workers' compensation and benefits sit on top of the wage, and the hours you pay for are never the same as the hours you can bill.

Enter your own numbers below. Everything runs in your browser — nothing you type is saved, stored or transmitted.

Payroll burden and true labor cost inputs

Employee Pay

The base hourly wage you pay this employee, before any employer costs.

A full-time employee working 40 hours per week for 52 weeks is paid for 2,080 hours before adjusting for your specific situation.

Enter the number of hours you realistically recover through customer billing or productive field work after vacation, holidays, training, meetings, travel, callbacks, shop time, and other non-billable time.

Billable Utilizationcalculated

—

Annual billable hours ÷ annual paid hours. Calculated for you from the two figures above.

Payroll Taxes, Workers' Comp & Benefits

Payroll burden is the employer-paid cost added on top of an employee's base wages. This calculator builds that percentage from payroll taxes, unemployment, workers' compensation, and employer-paid benefits instead of asking you to guess a percentage.

PTO, holidays, training, drive time and other paid non-billable hours are not entered here. They are already accounted for by the difference between your annual paid hours and annual billable hours, so adding them again would double-count the same cost.

Federal Payroll Taxes (2026) — calculated automatically

Employer Social Security (6.2% up to $184,500)
$0
Employer Medicare (1.45%, no wage cap)
$0
Estimated FUTA (0.6% on the first $7,000)
$0
About Estimated FUTA

FUTA is shown at the standard effective rate that applies when the employer receives the normal maximum state unemployment credit. It can differ for employers in states affected by credit-reduction rules, so verify the figure against your payroll records and use the advanced override below if your actual amount differs.

State Unemployment

Use the unemployment rate and taxable wage base shown on your state unemployment or payroll account. Employer-specific rates vary, so the calculator should not guess this number. Leave both blank if you do not have them — state unemployment will be shown as Not included.

State unemployment: Not included. If your company owes state unemployment tax, the burden percentage below understates your real employer cost.

Workers' Compensation

Use the rate applicable to your field electrical classification from your workers' compensation policy or payroll report.

Employer-Paid Benefits

All benefit fields are optional and count as zero when left blank. Do not include vehicles, fuel, general liability insurance, office payroll, advertising, software, tools or rent — those belong in Annual Company Overhead.

Where do I find these numbers?
SUTA:
State unemployment or payroll report.
Workers' comp:
Workers' compensation policy or payroll report.
Health benefits:
Monthly employer contribution per employee.
Retirement:
Employer plan contribution.
Other benefits:
Payroll and accounting records.

Live payroll burden summary

Enter your average hourly field wage and annual paid hours per field employee above, and your payroll burden will calculate here.

Your true labor cost

Enter an hourly wage, annual paid hours and annual billable hours to see the true cost of every hour you can sell. Employer cost fields are optional and count as zero when left blank.

Why Is the Billable-Hour Cost Higher?

The company pays employees for more hours than it can directly recover from customers. Paid hours can include vacation, holidays, training, meetings, shop time, travel, callbacks, administration and other non-billable time. Which of those you actually bill differs between contractors — some recover travel, some do not — so the calculator asks you for your own billable hours rather than assuming a split.

The true billable-hour cost therefore has to recover two things at once: the employer burden sitting above the wage, and the paid hours nobody invoices. That is why the figure lands well above the number on the employee's paycheck.

Hourly Wage vs. True Labor Cost

Hourly wage
What the employee earns.
Payroll burden
Employer-paid taxes, workers' compensation, unemployment and benefits above wages.
Loaded cost per paid hour
Wages plus employer burden divided across paid hours.
True cost per billable hour
The total annual employee cost divided only across the hours the company can realistically recover.

None of these four numbers is your selling rate. Once you know the true cost of a billable hour, read pricing and profitability fundamentals to see how labor cost, overhead recovery and margin fit together, or work through how to calculate an electrical labor rate step by step.

Frequently Asked Questions

Payroll burden is everything the employer pays on top of the electrician's base wage: employer payroll taxes, federal and state unemployment, workers' compensation and employer-paid benefits. It is normally expressed as a percentage of base wages so it can be applied consistently across the field crew.

Employer Social Security and Medicare, FUTA, state unemployment, workers' compensation, employer health, dental and vision contributions, employer retirement contributions, employer-paid life and disability cover, and any other payroll-related employer cost. Vehicles, fuel, general liability, office payroll, advertising, software, tools and rent are company overhead, not payroll burden.

Yes. Workers' compensation is charged as a percentage of payroll and varies by classification and by employer, so it belongs in burden rather than in overhead. Use the rate that applies to your field electrical classification, taken from your policy or payroll report.

Not as a separate burden percentage in this calculator. Paid time off, holidays, training and other paid non-billable hours are already captured by the gap between your annual paid hours and annual billable hours. Adding them again as a burden component would count the same cost twice.

A billable or productive hour is an hour you can realistically recover through customer billing. Annual billable hours are what remain from annual paid hours after vacation, holidays, training, meetings, travel, shop time, callbacks and administration — though which of those you can bill differs between contractors.

Two reasons stack. Employer burden adds taxes, workers' compensation and benefits on top of the wage, and the company pays for more hours than it can sell. Dividing the loaded annual cost across only the recoverable hours is what produces the true cost per billable hour.

True cost per billable hour is the floor your labor rate has to clear before company overhead and profit are added. Charging at or near this figure means the hour pays for the employee and nothing else. The labor rate calculator takes it from there and adds overhead recovery and your target profit.

Your workers' compensation rate is on your policy documents or payroll report, listed by classification code. Your state unemployment rate and taxable wage base are on your state unemployment account or payroll report. Both are employer-specific, so the calculator asks for them rather than guessing.

Know your cost. Now set your rate.

Your true labor cost is the floor. The labor rate calculator adds overhead recovery and your target profit to produce the rate you actually charge.

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