What a $1 raise really costs an electrical contractor

A $1 an hour raise costs about $2,334 a year per journeyman on a 2,080-hour year, once you add payroll burden at 12.2%, the construction average for legally required costs (BLS, June 2026). On a 3-month job with 10 hands, $1 runs $5,834 on 40-hour weeks and $10,210 on 6-10s. Losing two hands mid-job usually costs more.

01Why the rate keeps going up

The market moved, and your hands can see it. Production and nonsupervisory construction workers averaged $39.36 an hour in August 2026, up 5.0% in a year, per AGC's read of the federal jobs data. In the AGC and NCCER 2026 workforce survey, more than 8 in 10 firms said they raised base pay for hourly craft and salaried workers as much as or more than the year before.

One national electrical contractor told us: "We've been going higher and higher on the pay rate so we can be competitive." They still didn't know where competitive was. That's a different question, covered in how much to pay a journeyman electrician in 2026. This post is about what each dollar costs you once you've decided to move.

02What rides on top of every $1

Every dollar of wage carries the taxes and insurance figured on payroll, plus time and a half on every overtime hour.

• Legally required costs. BLS puts Social Security, Medicare, unemployment insurance and workers' comp for private construction at $4.42 an hour on $36.13 in wages (Employer Costs for Employee Compensation, June 2026). That's 12.2% on top of wages (our math: $4.42 / $36.13).
• Workers' comp is priced on payroll, so it goes up with the raise. Your class code and state set the real rate.
• Unemployment taxes stop at a wage base. For a hand already past it, the true add-on for a raise is a little under 12.2%.
• Overtime. Federal law pays time and a half for hours over 40 in a workweek (DOL Fact Sheet #23). Every $1 of rate is $1.50 on each OT hour.
• Anything figured as a percent of pay, like a 401(k) match, rises with the rate too.

The examples below use 12.2%. Swap in your own number from your labor burden on an electrician and the math still works the same way.

03Cost per hand per year: $1, $3 and $5

At 2,080 straight-time hours, each $1 adds $2,080 in wages and about $2,334 with burden.

Overtime stacks on top. If a hand works 300 OT hours a year, each $1 of raise adds another $450 in wages ($1.50 x 300), or about $505 burdened.

04Cost on a 3-month job with 10 hands

On a 13-week job with 10 hands, a $1 raise costs $5,834 on 5-8s and $10,210 on 6-10s, burdened.

The jump on long weeks is the overtime. On 6-10s each hand works 40 straight hours and 20 OT hours, so every $1 of rate costs $70 a week before burden ($40 + $30).

Totals are 10 hands for 13 weeks, with 12.2% burden. Example: $3 on 6-10s is $3 x 70 rate-hours = $210 a hand a week, x 13 weeks x 10 hands = $27,300, x 1.122 = $30,631.

If the job is lump sum, every one of those dollars comes out of margin. That's why the next number matters.

05What losing two hands mid-job costs

Losing two hands mid-job usually costs more than a $3 raise for the whole crew, by the published estimates and by the agency math.

The published estimates are cross-industry, not construction-specific:

• The Center for American Progress found the typical cost of replacing a worker is about 20% of annual pay for jobs paying $75,000 or less (2012, a review of 11 research papers). On the May 2025 BLS median electrician wage of $63,190, that's $12,638 per hand (our math). Two hands: $25,276.
• Gallup puts it at "one-half to two times the employee's annual salary" (2019). On the same $63,190, that's $31,595 to $126,380 per hand (our math).

Use CAP as your floor. Gallup's range is a broad estimate across all kinds of jobs, so treat the top of it as a ceiling, not a likely number.

The agency fill, as a worked example. Say your J-man makes $50 an hour, inside the $50 to $55 one national electrical contractor told us they pay. Burdened at 12.2%, he costs you $56.10. Two of them walk at week 5 with 8 weeks left, and you cover the slots with agency hands. That same contractor told us an agency billed them $87.50 an hour plus per diem, and those were apprentices.

• Gap per hour: $87.50 - $56.10 = $31.40
• Per hand per 40-hour week: $1,256
• Two hands, 8 weeks: $20,096, before per diem

Compare that to the raise: $3 for all 10 hands for all 13 weeks at 40 hours is $17,503. The agency cover for two hands costs more than keeping the whole crew. If you can't fill the slots at all, the cost shows up as slipped dates, OT on the rest of the crew and a GC asking for a recovery plan. More on that in what it costs when a journeyman quits.

06The decision rule

A raise is cheaper than turnover when its cost for the rest of the job is less than the hands it keeps times what each loss costs you.

1. Price the raise for the weeks left. Raise x straight hours left x hands, plus raise x 1.5 x OT hours left x hands, then x (1 + your burden).
2. Count the hands you'd lose without it. Be honest. Who told you he got a call? Whose rate sits under the BLS median for your metro? Who's a traveler with a per diem job open somewhere else?
3. Price each loss. Use CAP's 20% of annual pay as the floor, or the agency fill gap for the weeks left, whichever fits your job.
4. Compare. If the raise costs less, give it. If it's close, raise only the hands you can't lose, or use a completion bonus for the weeks left. Holding a crew to the end of the job walks through the bonus math, including the overtime it triggers.

The break-even on the 10-hand example: at CAP's figure, a $3 raise across the crew on 40-hour weeks ($17,503) pays for itself if it keeps two hands ($25,276). It doesn't pay for itself if it keeps only one ($12,638). On 6-10s ($30,631) it needs to keep three hands ($37,914).

Two things the table doesn't show. A raise stays after the job ends; a completion bonus doesn't. And a raise you give one hand, the rest of the crew hears about by Friday. If one man brought you a competitor's number, read what to do when a competitor offers your journeyman $2 more before you answer him.

07Raise everybody, or just the hands you can't lose?

Raise by skill and role unless the whole crew is under the market. If your journeymen sit below the BLS median for your metro, a number that includes apprentices, a crew-wide move is overdue and the math above is the cost of catching up. If they're at the market, pay for what's scarce on this job: medium voltage, controls, VFDs, the hand who can run work from prints with no one standing over him. One national electrical contractor told us that at $58 an hour, "that person better be very experienced and I should just be able to point and say, hey, go do it."

Write down why each hand is at his rate. When the next one asks, you have an answer that isn't "because he asked first."

If you're short-handed now and the raise math says you need more hands, not higher rates, apply here and we'll see if we can put 5 licensed electricians in front of you in 14 days. If we don't book you 5 in 14 days, you don't pay.

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