Free Resource · Small Business Finance
Overhead &
Burden Rate Calculator
Most trade contractors undercharge because they calculate labor cost as just the paycheck. Your true cost per field hour — the fully burdened rate — includes payroll taxes, benefits, insurance, and your share of overhead. Get that number wrong and you're losing money on every bid.
Your Business Numbers
Employee Labor
$
#
#
#
Payroll Burden (% of Base Wages)
%
%
%
%
$
%
#
$
Annual Overhead Costs
$
$
$
$
$
$
Your Fully Burdened Hourly Rate (Per Worker)
—
vs. base wage of — — that's —× your paycheck rate
Direct Labor Cost / Hr
—
Wage + payroll burden
Overhead / Hr
—
Allocated per billable hour
Total Annual Labor Cost
—
All workers combined
Cost Breakdown
| Cost Category | $ / Worker / Year | $ / Hour | % of Total |
|---|
⚠️ Potential undercharge risk: Your overhead allocation per hour is high relative to your wage rate. If you're quoting jobs using just the base wage + a markup, you may not be recovering your full overhead. Every hour you bill needs to carry its share of rent, vehicles, admin, and insurance — not just the worker's paycheck.
What to Charge — Break-Even vs. Profitable
| Billing Rate | Hourly | Gross Margin | Annual Profit (all workers) |
|---|
Rule of thumb for trade contractors: Your billing rate should be your burdened cost plus your target margin. If you want a 20% gross margin, divide your burdened rate by 0.80. At 25%, divide by 0.75. The calculator above gives you the floor — your actual billing rate needs to sit above it.
You've Got Your Numbers — Now Protect Your Contracts
Knowing your true cost is step one. Step two is making sure your DoD contracts stay active. CMMC Level 1 compliance is now required for every subcontractor handling federal contract information on NAVFAC and USACE projects.
CMMC compliance for trade subs
No IT expertise required
Hawaii, Guam & CNMI coverage
Starting at $299/year
→ Take the free Sub Compliance Risk Check first
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