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Separate annual employee cost from the cost of a specific job.

First calculate what the employee costs your company over a year. Then use that loaded hourly cost to estimate regular and overtime labor on one specific job.

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Step A · Annual employee cost

A. Calculate the employee’s annual loaded labor cost

These inputs describe the employee and recurring employer costs across the year. They are not costs for one particular job. Results update automatically as you type.

Annual input. Include paid vacation, holidays and sick time if they are part of annual paid hours.
Annual employer burden estimate. Use your own payroll/tax figures.
Annual employer burden. Enter the rate shown on your ESD account or rate notice.
Annual employee-cost input based on the applicable L&I risk classification.
Annual input used to estimate total employer-paid workers’ comp cost.
Example: employer health contribution. This helps build annual employee cost; it is not entered again as a job expense.
Training, uniforms, tools, bonuses or other recurring employee costs not already entered.
Usually lower than paid hours because vacation, holidays, meetings, training, travel and downtime may not be billable.
Annual employer burden not already included above.
Annual-cost rule: Use employer-paid costs that belong to the employee across the year. Do not enter materials, permits, subcontractors, job equipment or other project-specific expenses here.

Annual employee-cost results

Annual base wages—
Annual labor burden above wages—
Labor burden percentage—
Total annual employer labor cost—
Loaded cost per paid hour—
True cost per productive regular hour—
Cost of 8 productive regular hours—
Cost of 40 productive regular hours—

The true productive-hour cost spreads the employee’s annual employer cost across the hours you expect to be productive or billable.

Step B uses this annual result as the regular labor cost basis — True cost per productive regular hour
Step B · Job-specific labor

B. Apply the loaded labor cost to this job

Only enter labor hours and pricing assumptions for this specific job. These fields do not change the employee’s annual cost above.

Job-specific input.
Job-specific input. For a typical nonexempt Washington employee, overtime generally begins after 40 hours in the workweek.
Defaults to 1.5×. Change it when the project or applicable rule requires a different multiplier.
Job-pricing input used to calculate suggested billable labor rates.
Overtime planning: The calculator applies the overtime multiplier to the employee’s wage and wage-based employer burden for entered overtime hours. Workers’ comp and hourly benefit costs are added at their normal hourly amount. Fixed annual employee costs are not multiplied by 1.5.

Job-specific labor results

Regular labor cost on this job—
Estimated loaded overtime cost per hour—
Overtime labor cost on this job—
Estimated total labor cost for this job—
Suggested billable regular labor rate—
Suggested billable overtime labor rate—

Job-specific result: carry “Estimated total labor cost for this job” into the Direct Labor or Direct Job Costs field in the other contractor calculators.

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How Washington overtime is handled

For most overtime-eligible Washington employees, overtime is at least 1.5 times the regular rate for hours worked over 40 in a seven-day workweek. The regular rate may include more than the base hourly wage when an employee receives certain additional compensation.

Public works can have additional overtime requirements, including overtime after 8 hours in a day in some circumstances. Use the editable multiplier and overtime-hours fields for planning, then verify the project’s actual wage and overtime requirements.

Why productive hours matter

An employee can be paid for 2,080 hours in a year without producing 2,080 billable hours. Paid holidays, vacation, sick time, meetings, training, shop time, travel and other nonbillable activity reduce the number of hours available to recover the employee’s cost.

That is why the annual section first converts annual employer cost into a true cost per productive regular hour, and only then applies that cost to a specific job.

Washington rate references

Washington L&I overtime rules ↗

Washington L&I workers’ compensation rates ↗

Washington ESD unemployment tax rates ↗

Workers’ compensation and unemployment costs vary by employer, classification, experience and other factors. Enter your actual employer rates rather than relying on a generic percentage.

Use the job labor result in your other contractor calculators

The Estimated total labor cost for this job can be carried into the Direct Labor or Direct Job Costs field in the other calculators.

Job Tax & Profit Calculator   Overhead & Break-Even Calculator

Planning estimate: overtime, payroll taxes and benefit rules can have wage bases, caps, exemptions, prevailing-wage rules and other details that a simple calculator cannot model. Verify payroll and project requirements with your payroll provider, accountant, Washington L&I and ESD as appropriate.