Effective Labor Rate Calculator
Understanding your effective labor rate is crucial for accurate pricing, profitability analysis, and ensuring your business is sustainable. The effective labor rate represents the actual hourly rate you generate from your labor after accounting for all overhead costs associated with employing that labor. It's not just about the wages you pay, but the total cost to have an employee performing work for you.
Calculate
Results:
Total Labor Cost per Hour (including burden):
Total Annual Billable Hours:
Total Annual Labor Cost (including burden):
Effective Labor Rate (Revenue / Billable Hours):
Profit Margin per Billable Hour:
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button:hover {
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.result-section {
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.result-section p {
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.result-section span {
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function calculateEffectiveLaborRate() {
var directLaborCost = parseFloat(document.getElementById("directLaborCost").value);
var burdenRate = parseFloat(document.getElementById("burdenRate").value);
var billableHours = parseFloat(document.getElementById("billableHours").value);
var weeksPerYear = parseFloat(document.getElementById("weeksPerYear").value);
var projectRevenue = parseFloat(document.getElementById("projectRevenue").value);
var totalLaborCostPerHour = document.getElementById("totalLaborCostPerHour");
var totalAnnualBillableHours = document.getElementById("totalAnnualBillableHours");
var totalAnnualLaborCost = document.getElementById("totalAnnualLaborCost");
var effectiveLaborRate = document.getElementById("effectiveLaborRate");
var profitMarginPerHour = document.getElementById("profitMarginPerHour");
// Input validation
if (isNaN(directLaborCost) || directLaborCost < 0 ||
isNaN(burdenRate) || burdenRate < 0 ||
isNaN(billableHours) || billableHours < 0 ||
isNaN(weeksPerYear) || weeksPerYear < 0 ||
isNaN(projectRevenue) || projectRevenue 0) {
calculatedEffectiveLaborRate = projectRevenue / calculatedTotalAnnualBillableHours;
}
var profitMarginPerHour = calculatedEffectiveLaborRate – calculatedTotalLaborCostPerHour;
// Display results
totalLaborCostPerHour.textContent = "$" + calculatedTotalLaborCostPerHour.toFixed(2);
totalAnnualBillableHours.textContent = calculatedTotalAnnualBillableHours.toFixed(0);
totalAnnualLaborCost.textContent = "$" + calculatedTotalAnnualLaborCost.toFixed(2);
effectiveLaborRate.textContent = "$" + calculatedEffectiveLaborRate.toFixed(2);
profitMarginPerHour.textContent = "$" + profitMarginPerHour.toFixed(2);
}