Labor Cost Calculator

Enter hours per worker, hourly rate, and number of workers to calculate total labor cost, man-hours, and cost per worker with monthly and annual projections.
Luis GonzalezCreated by Luis GonzalezLast updated:

How to Use This Calculator

  1. 1

    Enter Hours per Worker

    Input the number of hours each worker will work for the project or period.

  2. 2

    Enter Hourly Rate

    Provide the fully burdened hourly rate including wages, taxes, and benefits.

  3. 3

    Enter Number of Workers

    Input the total number of workers assigned to the project.

  4. 4

    Review Your Results

    See your Total Labor Cost, Total Man-Hours, and Cost per Worker. The Labor Cost Projections panel shows monthly and annual estimates plus a 10% contingency buffer.

Example Calculation

A contractor calculates labor cost for a 2-person crew working 40 hours each at $35/hr.

Hours per Worker

40 hrs

Hourly Rate

$35/hr

Number of Workers

2

Results

Total Labor Cost

$2,800.00

Total Man-Hours

80 hrs

Cost per Worker

$1,400.00

Tips

Use the Burdened Rate

Include payroll taxes, workers' comp, health insurance, and retirement in your hourly rate. These typically add 20-40% to base wages — a $25/hr base wage becomes $30-$35/hr fully burdened.

Add a Contingency Buffer

The Insights panel shows a 10% contingency. On a $2,800 project, that is $280 extra for a $3,080 total budget. Most contractors recommend 10-20% for unexpected labor overruns.

Project Annual Costs

If this is a weekly labor cost, the Insights panel projects your annual expense. A $2,800/week crew costs ~$145,600/year — use this for hiring decisions and annual budgets.

The Labor Cost Calculator determines your total workforce expense by multiplying hours per worker, hourly rate, and number of workers.

For a 2-person crew working 40 hours each at $35/hr, the total labor cost is $2,800 with 80 man-hours and $1,400 per worker.

The Labor Cost Formula

The calculator uses a direct multiplication to determine total labor expense.

Total Man-Hours = Hours per Worker x Number of Workers
Total Labor Cost = Total Man-Hours x Hourly Rate
Cost per Worker = Hours per Worker x Hourly Rate

Where:

  • Hours per Worker is the number of hours each individual works.
  • Hourly Rate is the fully burdened cost per hour (wages + taxes + benefits).
  • Number of Workers is the crew size.
💡 Need to plan for unexpected labor overruns? Our Project Contingency Budget Calculator helps you set aside the right buffer amount.

Worked Example: 2-Person Crew for One Week

A contractor needs to estimate labor costs for a home renovation project with a 2-person crew working a full week at $35/hr burdened rate.

  1. Calculate total man-hours: Total Man-Hours = 40 hrs x 2 workers = 80 hrs
  2. Calculate total labor cost: Total Labor Cost = 80 hrs x $35/hr = $2,800.00
  3. Calculate cost per worker: Cost per Worker = 40 hrs x $35/hr = $1,400.00

The weekly labor cost is $2,800.

Projected monthly (4.33 weeks), that is ~$12,124.

Annually (52 weeks), the same crew costs ~$145,600.

💡 To see how labor costs fit into your overall revenue picture, try our Labor Cost as % of Revenue Calculator.

Labor Rates by Trade in 2026

Hourly labor rates vary significantly by trade, skill level, and region.

Use these ranges for the Hourly Rate field:

  • General labor: $20-35/hr
  • Carpenters: $40-65/hr
  • Plumbers: $45-70/hr
  • Electricians: $45-75/hr
  • HVAC technicians: $50-80/hr
  • Specialists (custom fabrication, master electricians): $80-120+/hr

These are base rates.

Add 20-40% for the fully burdened rate (taxes, insurance, benefits).

A carpenter at $50/hr base becomes $60-70/hr fully burdened.

Planning Your Project Labor Budget

Labor typically represents 40-60% of total project costs in construction and home improvement.

For a complete budget, combine your labor cost with material estimates and add a contingency:

  • Labor (from this calculator): $2,800
  • 10% contingency: $280
  • Budgeted labor total: $3,080
  • Estimated materials (40-60% of total): $1,867-$4,200
  • Total project estimate: $4,947-$7,280

Track actual hours against estimates as the project progresses.

If labor is running 10-20% over estimate, investigate the cause early before costs escalate further.

Frequently Asked Questions

How is total labor cost calculated?

Total Labor Cost = Hours per Worker x Hourly Rate x Number of Workers. For example, 2 workers at 40 hours each at $35/hr = 80 man-hours x $35 = $2,800. This gives you the direct cost of labor for a project or period.

What should be included in the hourly rate?

The hourly rate should be the 'fully burdened' cost including base wages, payroll taxes (FICA, FUTA), workers' compensation insurance, health insurance, retirement contributions, and any other employer-paid benefits. This typically adds 20-40% to the base wage.

How do I estimate labor costs for a full project?

Break the project into tasks, estimate hours per task, assign workers, and calculate each phase separately. Then add a 10-20% contingency for unforeseen issues. For a $2,800 weekly cost over a 4-week project, budget $11,200 plus $1,120-$2,240 contingency.

What is a typical hourly rate for construction workers?

Rates vary by trade and region. General labor runs $20-35/hr, skilled carpenters and plumbers $40-65/hr, electricians $45-75/hr, and specialists can exceed $100/hr. Always use the fully burdened rate (base + benefits + taxes) for accurate cost estimates.

How much does labor typically cost as a percentage of a project?

Labor typically represents 40-60% of total project costs in home improvement and construction. On a $10,000 bathroom remodel, expect $4,000-$6,000 in labor. Use this calculator alongside material estimates for a complete project budget.