By outlining all the tasks that need to be completed for a project and assigning a value to each task, you can have a clear understanding of how much each stage of the project should cost. For residential construction projects, one of the easiest ways to reduce labor costs is to WBS - work breakdown structure. There are a number of ways to reduce construction labor costs, but it will generally depend on the type of construction project you are undertaking. (Hourly Wage + Hourly Labor Burden) * Hours Worked/Neededįor example, if you have a worker that is paid $25 per hour with a labor burden of $7 per hour and they will be needed for 40 hours during your project, the labor cost for this worker is $1,280 ( ($25+$7)*40 ). The formula for calculating the construction labor cost is: ![]() ![]() To find your construction labor cost, you need to know three things: The additional costs of labor beyond an hourly wage can quickly wipe out your profit margin from any job if they're not properly accounted for upfront. How to calculate construction labor costs?Ĭalculating your real cost of labor is an important step in providing accurate estimates. Additional costs may include retirement plan support, vacation, bonuses, allowances, membership dues, or any other expenses you pay for each employee. ![]() This includes both state and federal taxes, medicare, and insurance premiums. Your labor burden is the additional costs that you pay beyond a standard wage of a worker on payroll. This Construction Labor Cost Calculator is designed to help you accurately project the actual labor cost of an individual worker in a project by accounting for wage, hours worked and labor burden.
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