Rent, software, equipment, admin support per employee.
Standard full-time is 2080. Subtract PTO/Holidays for accuracy.
The markup percentage you want to earn on this role.
Please enter valid numeric values for all fields.
Base Hourly Rate (Raw Salary):$0.00
Load Factor (Multiplier):1.0x
Total Annual Cost (Fully Loaded):$0.00
Fully Loaded Hourly Cost (Break-Even):$0.00
Recommended Billable Rate:$0.00
What is a Fully Loaded Rate?
In financial planning and professional services, a Fully Loaded Rate (or fully burdened rate) represents the true cost of an employee to an organization. While most employees only think about their base salary, a company incurs significantly more expenses to keep that employee on staff.
Calculating the fully loaded rate is essential for service-based businesses, agencies, and consultants to ensure they are pricing their services correctly. If you bill clients based solely on an employee's hourly salary, you will likely operate at a loss.
Components of the Fully Loaded Cost
The calculation moves beyond the gross salary to include:
Mandatory Payroll Taxes: Employer contributions to Social Security, Medicare, and federal/state unemployment insurance.
Benefits & Perks: Health insurance premiums, life insurance, 401(k) matching contributions, and paid time off (vacation, sick leave, holidays).
Overhead: The indirect costs associated with the employee, such as office rent, utilities, software licenses, laptops, and administrative support.
How to Calculate Fully Loaded Rate
The formula generally follows these steps:
Calculate Total Annual Cost: Base Salary + Taxes + Benefits + Overhead Allocation.
Determine Billable Hours: Start with the standard 2,080 work hours per year (40 hours/week × 52 weeks) and subtract holidays, vacation days, and estimated non-billable administrative time.
Calculate Hourly Cost: Divide the Total Annual Cost by the Billable Hours. This is your "Break-Even" rate.
Add Profit Margin: Apply a markup to the break-even rate to determine the final billable rate charged to clients.
Why is this Calculation Critical?
1. Pricing Accuracy: Failing to account for overhead and benefits leads to underpricing projects. A common rule of thumb is that an employee costs 1.25x to 1.5x their base salary, but this varies wildly by industry.
2. Hiring Decisions: Understanding the fully loaded cost helps managers budget accurately for new hires, ensuring the revenue generated by the role justifies the total expense.
3. Profitability Analysis: It allows businesses to see which employees or departments are actually generating profit versus those that are merely covering their base salaries.
function calculateFullyLoadedRate() {
// 1. Get input values
var baseSalary = parseFloat(document.getElementById('baseSalary').value);
var taxRate = parseFloat(document.getElementById('taxRate').value);
var annualBenefits = parseFloat(document.getElementById('annualBenefits').value);
var annualOverhead = parseFloat(document.getElementById('annualOverhead').value);
var billableHours = parseFloat(document.getElementById('billableHours').value);
var profitMargin = parseFloat(document.getElementById('profitMargin').value);
var errorMsg = document.getElementById('errorMsg');
var resultsDiv = document.getElementById('results');
// 2. Validate inputs
if (isNaN(baseSalary) || isNaN(taxRate) || isNaN(annualBenefits) ||
isNaN(annualOverhead) || isNaN(billableHours) || isNaN(profitMargin)) {
errorMsg.style.display = 'block';
resultsDiv.style.display = 'none';
return;
}
if (billableHours <= 0) {
alert("Billable hours must be greater than 0");
return;
}
errorMsg.style.display = 'none';
// 3. Perform Calculations
// Calculate tax amount in dollars
var taxAmount = baseSalary * (taxRate / 100);
// Total Annual Fully Loaded Cost
var totalAnnualCost = baseSalary + taxAmount + annualBenefits + annualOverhead;
// Base Hourly Rate (Raw salary / 2080 standard hours usually, or user defined hours)
// We will use user defined billable hours for the rate context, but for 'Raw Salary' visual
// it is often helpful to see salary / 2080. However, to keep consistency with the
// specific inputs, let's use the provided hours to show effective base rate.
var baseHourly = baseSalary / billableHours;
// Fully Loaded Hourly Cost (Break Even)
var fullyLoadedHourly = totalAnnualCost / billableHours;
// Load Factor (Ratio of Total Cost to Base Salary)
var loadFactor = totalAnnualCost / baseSalary;
// Recommended Billable Rate (Cost + Margin)
// Formula: Cost * (1 + Margin%)
var billableRate = fullyLoadedHourly * (1 + (profitMargin / 100));
// 4. Update UI
// Format currency helper
var formatter = new Intl.NumberFormat('en-US', {
style: 'currency',
currency: 'USD',
minimumFractionDigits: 2
});
document.getElementById('resBaseHourly').innerText = formatter.format(baseHourly);
document.getElementById('resLoadFactor').innerText = loadFactor.toFixed(2) + "x";
document.getElementById('resTotalAnnual').innerText = formatter.format(totalAnnualCost);
document.getElementById('resHourlyCost').innerText = formatter.format(fullyLoadedHourly);
document.getElementById('resBillableRate').innerText = formatter.format(billableRate);
resultsDiv.style.display = 'block';
}