Estimating with Labor Burden

Using the Burden Calculator

To have the BidMagic construction estimating software program calculate the net cost of labor for you, follow these steps:

1. Turn on the Use Burden Calculator button.
2. Enter base wage rates for an 'average' skilled and unskilled worker. NOTE: See the previous page for instructions on how to figure wages for an 'average' worker.
3. Enter the percentage cost of the employer half of FICA (social security) tax.
4. Enter the percentage cost of state and local Unemployment taxes combined. NOTE: These numbers will need to be adjusted whenever the Federal and State rates change.
5. Enter a Worker's Compensation rate. If you pay a flat rate for Worker's Comp, use that. If you pay a different rate for each employee, use the average rate for your skilled employees and the average rate for your unskilled employees. If you pay a different Worker's Comp rate for each type of work, use a weighted average rate, based on the work done by your skilled and unskilled employees respectively.
6. If you pay liability insurance or disability insurance as a percentage of payroll, enter the total percentage. NOTE: As an alternative, you can include these costs in the overhead percentage (see page 149).
7. If you pay medical benefits or any other benefits, enter the costs for each of them, on a percentage basis. If you pay any of these costs on a flat-price basis, convert the flat price to a percentage by dividing the total cost for the benefits by the gross payroll for all employees.
8. Enter the total number of paid holidays and paid vacation days received by the average skilled and unskilled worker.

As each burden cost is entered, the overall burden percentage and the net cost of labor is computed for you.