Burden Rate

The true fully-loaded cost of an employee per hour — wages plus payroll taxes, workers' comp, benefits, and other employer costs.

An employee earning $30/hour costs the business more like $40-$50/hour fully loaded once you add FICA, FUTA, SUTA, workers' comp (especially in high-risk trades), benefits, and paid time off.

Pricing labor at the wage rate instead of the burden rate is a slow-motion margin leak — the gap between $30 and $45 is real money, and it has to come out of the customer or out of profit.

Related

• Overhead — The cost of running the business that isn't tied to any specific job — rent, insurance, software, your truck, the time you spend quoting.
• Workers' Compensation — State-mandated insurance that pays medical bills and lost wages when an employee is hurt on the job.
• Compare contractor CRMs — FieldKrew against Jobber, Housecall Pro and ServiceTitan
• Retainage — A percentage of each progress payment (typically 5-10%) that the owner or GC withholds until the job is fully complete and accepted.
• Draw Schedule — A pre-agreed payment schedule for a construction project, tied to milestones or percentage of completion.
• Deposit — An up-front payment collected when a contract is signed, typically 10-30% of the contract value.