How to calculate labor burden on an electrician

Labor burden is everything you pay for a hand on top of his wage: payroll taxes, workers' comp, insurance, retirement, paid time off, and his truck and tools. In June 2026, private construction employers paid $36.13 an hour in wages and $15.84 in benefits, per the BLS. In the example below, a $45 an hour journeyman costs about $61 per hour actually worked without a truck and tools, and $67.11 with them.

01What burden runs in construction, per BLS

BLS measures what employers spend on benefits in its Employer Costs for Employee Compensation (ECEC) survey.

For private industry construction in June 2026:

Source: BLS ECEC, June 2026, table 4. The benefit lines add to $15.83 because of rounding; BLS puts total benefits at $15.84.

Our math on those numbers: benefits run 43.8% on top of wages, and the legally required part alone is 12.2% of wages. That's an average across all construction jobs, union and open shop, field and office. It doesn't count trucks, tools or fuel, which is where an electrical contractor's burden really climbs. Burden sits on top of the wage, so set the wage first with how much to pay a journeyman electrician in 2026.

02Build it for one journeyman: a $45 an hour example

Every number in this table is an example except the federal tax rates. Put your own rates in.

Assumptions: $45 an hour, 2,080 paid hours a year, 80 hours of vacation and 6 paid holidays (48 hours). That's 128 hours paid but not worked, so he's on the job 1,952 hours. Burden only counts if you divide it by the hours he actually works.

Where the fixed rates come from: for 2026, Social Security is 6.2% for the employer on wages up to $184,500, Medicare is 1.45% with no cap, and FUTA is 6.0% on the first $7,000, or 0.6% after the full 5.4% state credit (IRS Publication 15 (2026)).

The rest change a lot by state and shop:

• Workers' comp depends on your state, your carrier, your class code for electrical work and your experience mod. Pull the rate off your own policy. It's the line most likely to be wrong in a rough guess.
• State unemployment rates and wage bases vary by state and by your claims history.
• Health insurance is whatever your plan costs you for his coverage after his share.
• Truck only applies if he takes one home or has one assigned on the job.

03What the example tells you

On those numbers, the $45 journeyman costs $67.11 per hour worked, $22.11 over his wage. That's 49% on top (our math).

Take the truck and tools off and he costs about $61 per hour worked, roughly 35% on top.

Two lines surprise people:

1. Paid time off. He makes $45 an hour, but because you pay 128 hours he doesn't work, his wage alone costs you $47.95 per hour worked.
2. The truck. At $900 a month, the truck costs more per hour than his health insurance.

The legally required lines (Social Security, Medicare, both unemployment taxes and comp) come to $12,287, or 13.1% of wages. That's close to the BLS construction average of 12.2%, which is a good sign the example isn't far off.

Burden goes up from here if you count time you pay for that you can't bill: drive time to the job, shop time, rain days and callbacks. If 10% of his worked hours aren't billable, divide by 1,757 hours instead of 1,952.

04Burdened cost vs an agency bill rate

Your burdened number is what an agency's markup should be measured against.

Say an agency bills you $86 an hour for a journeyman it pays $52. That's a $34 spread, 65% over his wage (our math). One national electrical contractor told us agency markups run "on average, 30 to 40%" in their experience, and that one agency billed them about $87.50 an hour, plus per diem, for apprentices.

Here's what the $34 has to cover, using the same example rates as the table:

Now run the same hand on your own payroll. A $52 journeyman with the same taxes, comp, liability, health, retirement, paid time off and training as the table, but no truck or tools, costs about $69.70 per hour worked (our math). The agency bills $86 per hour worked. That's $16.30 an hour more, or $8,476 per hand over 13 weeks of 40-hour weeks, before per diem.

That gap is the cost of the agency's recruiting. Sometimes it's worth it for a short job. On a long one it adds up. It's also worth knowing that BLS puts the median for electricians employed by staffing firms at $57,760 a year, under the $61,570 median at electrical contractors (May 2025, BLS Occupational Outlook Handbook). More on how agencies price this in how much a staffing agency marks up an electrician.

05Put the number to work

Once you have burdened cost per worked hour, use it in three places.

• Bids. Price labor at burdened cost per worked hour, not wage. A bid built on $45 when the hand really costs $67 is $22 an hour short before overhead or profit.
• Raises. On this example, every $1 of wage adds about $1.25 per hour worked once PTO, payroll taxes, comp, liability and the 3% match ride on it (our math). See what a $1 raise really costs an electrical contractor.
• Your first hire. For a small shop, the truck and comp lines decide whether a second hand pays for himself. See when to hire your first electrician.

If you'd rather put hands on your own payroll than keep paying an agency spread, apply here and we'll see if we can put 5 licensed electricians in front of you in 14 days.

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