.calculator-container-wp {
max-width: 800px;
margin: 0 auto;
font-family: 'Segoe UI', Tahoma, Geneva, Verdana, sans-serif;
color: #333;
background: #f9f9f9;
padding: 20px;
border-radius: 8px;
box-shadow: 0 4px 15px rgba(0,0,0,0.05);
}
.calc-header {
text-align: center;
margin-bottom: 30px;
}
.calc-header h2 {
color: #2c3e50;
margin-bottom: 10px;
}
.calc-grid {
display: grid;
grid-template-columns: 1fr 1fr;
gap: 20px;
}
.input-group {
margin-bottom: 15px;
}
.input-group label {
display: block;
margin-bottom: 5px;
font-weight: 600;
font-size: 0.9em;
color: #555;
}
.input-group input {
width: 100%;
padding: 10px;
border: 1px solid #ddd;
border-radius: 4px;
font-size: 1em;
box-sizing: border-box;
}
.input-group .hint {
font-size: 0.8em;
color: #888;
margin-top: 4px;
}
.full-width {
grid-column: span 2;
}
.calc-btn {
background-color: #2980b9;
color: white;
border: none;
padding: 15px 30px;
font-size: 1.1em;
border-radius: 4px;
cursor: pointer;
width: 100%;
transition: background 0.3s;
margin-top: 10px;
font-weight: bold;
}
.calc-btn:hover {
background-color: #1a5276;
}
.results-box {
background: #fff;
border: 1px solid #e0e0e0;
border-radius: 6px;
padding: 25px;
margin-top: 30px;
display: none;
}
.results-header {
border-bottom: 2px solid #2980b9;
padding-bottom: 10px;
margin-bottom: 20px;
color: #2980b9;
font-size: 1.2em;
font-weight: bold;
}
.result-row {
display: flex;
justify-content: space-between;
margin-bottom: 15px;
padding-bottom: 15px;
border-bottom: 1px dashed #eee;
}
.result-row:last-child {
border-bottom: none;
margin-bottom: 0;
padding-bottom: 0;
}
.result-label {
color: #666;
}
.result-value {
font-weight: bold;
font-size: 1.1em;
color: #2c3e50;
}
.big-result {
background: #eaf2f8;
padding: 15px;
border-radius: 4px;
text-align: center;
margin-top: 20px;
}
.big-result .label {
font-size: 0.9em;
text-transform: uppercase;
letter-spacing: 1px;
color: #555;
}
.big-result .value {
font-size: 2em;
color: #2980b9;
font-weight: 800;
}
@media (max-width: 600px) {
.calc-grid {
grid-template-columns: 1fr;
}
.full-width {
grid-column: span 1;
}
}
.article-content {
margin-top: 50px;
border-top: 2px solid #eee;
padding-top: 30px;
line-height: 1.6;
}
.article-content h2 {
color: #2c3e50;
margin-top: 30px;
}
.article-content h3 {
color: #34495e;
}
.article-content ul {
padding-left: 20px;
}
.article-content li {
margin-bottom: 10px;
}
function calculateLaborRate() {
// Get inputs
var baseWage = parseFloat(document.getElementById('baseWage').value);
var laborBurden = parseFloat(document.getElementById('laborBurden').value);
var billableHours = parseFloat(document.getElementById('billableHours').value);
var annualOverhead = parseFloat(document.getElementById('annualOverhead').value);
var numEmployees = parseFloat(document.getElementById('numEmployees').value);
var profitMargin = parseFloat(document.getElementById('profitMargin').value);
// Validation
if (isNaN(baseWage) || isNaN(billableHours) || isNaN(annualOverhead) || isNaN(profitMargin) || billableHours <= 0 || numEmployees = 1) {
alert("Profit margin must be less than 100%.");
return;
}
var targetRate = breakEvenRate / (1 – decimalMargin);
// Display Results
document.getElementById('resBurdenedWage').innerText = "$" + burdenedWage.toFixed(2);
document.getElementById('resOverheadHour').innerText = "$" + overheadPerHour.toFixed(2);
document.getElementById('resBreakEven').innerText = "$" + breakEvenRate.toFixed(2);
document.getElementById('resTargetRate').innerText = "$" + targetRate.toFixed(2) + " / hr";
// Show results div
document.getElementById('resultsArea').style.display = "block";
}
How to Calculate Your Custom Labor Rate Correctly
Determining the correct hourly labor rate is one of the most critical financial tasks for service-based businesses, contractors, and consultants. Charging too little results in invisible losses where you might be busy but not profitable. Charging too much without justification can lose you bids. This guide explains the methodology used in the Custom Labor Rate Calculator above.
1. The Labor Burden
Many business owners make the mistake of using the employee's base hourly wage as their cost basis. However, the true cost of an employee includes payroll taxes (Social Security, Medicare), unemployment insurance, worker's compensation, health benefits, and paid time off.
This is known as the Labor Burden. A typical labor burden ranges from 15% to 30% on top of the base wage. In our calculator, we calculate the Fully Burdened Hourly Cost to ensure you aren't absorbing these costs out of your profit.
2. Calculating Overhead Allocation
Your billable rate must cover not just the person doing the work, but the business that supports them. Overhead includes rent, utilities, software subscriptions, marketing costs, accounting fees, and the salaries of non-billable staff (like receptionists).
To find the Overhead Cost per Hour, we divide your total annual overhead by the number of billable employees to find the share per person. Then, we divide that share by the number of billable hours per year. This ensures every hour billed contributes a small fraction toward keeping the lights on.
3. Billable Efficiency
A standard work year is 2,080 hours (40 hours x 52 weeks). However, no employee is 100% billable. You must account for:
- Vacation and Sick days
- Staff meetings and training
- Administrative tasks
- Travel time
A realistic billable efficiency for a full-time employee is often between 1,500 and 1,700 hours. The calculator uses this reduced number to ensure you recover your annual costs in fewer hours.
4. The Profit Margin Formula
Once you have your Break-Even Rate (Labor + Overhead), you must add profit. The calculator uses the Gross Margin Formula, which is the industry standard for pricing.
Price = Cost / (1 – Desired Profit Margin %)
For example, if your costs are $80/hour and you want a 20% profit margin, you do not simply add 20% to $80 ($96). Instead, you divide $80 by 0.80, resulting in $100. This ensures that $20 is exactly 20% of your final $100 revenue.
Summary
By using this calculator, you move from "guessing" your rates to "knowing" them. This confidence allows you to negotiate better, hire strategically, and ensure the long-term sustainability of your business.