Labor Rates with Burden w/Karen Mitchell [Webinar]

Home / Best Practices / Labor Rates with Burden w/Karen Mitchell [Webinar]

Labor Rates with Burden

Presentation by Karen Mitchell, CPA, Online Accounting

Thanks to everyone that joined us today. It was a fantastic presentation by Karen Mitchell, CPA, Online Accounting. We had some very obvious microphone issues and appreciate your patience while we worked those out. 

Karen is a seasoned CPA that focuses on helping entrepreneurs start, grow, and sell their businesses. She has a passion for teaching business owners how to select the proper entity type, develop management policies, make sound financial decisions, and ultimately increase the value of their company.

If you are forming or growing a company, and need a trusted advisor to help you get to the next level we are certain you’ll like working with Karen. She has been doing this since 1987!

Some of the services she provides include; creating a business plan, budget, forecast, financial policies and procedures, training for your accounting department, advice on investing in real estate with your self-directed IRA, put together a solid plan to exit your business and temp CFO work.

She is the author of several books and often speaks at industry specific trade shows across the country on finance and accounting topics. []

Deep Dive:

What happened today?

We talked about labor rates with burden – understanding what goes into those rates and how much employees actually cost.

Labor Rates with Burden, Presentation by Karen Mitchell, Online Accounting

What do we want to focus on today? How much are my employees costing me? There are three things to look at.

  • Rate – what is the hourly rate you’re paying your employees?
  • Burden – what are the costs to you to employ this person?
  • Calculation of burden – what to include and look for in burden?

KISS (keep it simple) vs. FLLB (fully loaded labor burden)

How much are my employees costing me?

  • Hourly rate +
    • Social security
    • Medicare
    • SUTA
    • FUTA
    • Workers Compensation (percentage of employee’s hourly rate)
    • General Liability Insurance
  • What about company paid benefits?
    • Medical
    • Dental
    • Vision
    • PTO
      • Vacation
      • Sick Pay
      • Holiday Pay

Let’s take a look at the spreadsheet below. In the example, we have an employee that is paid at $19/hour. Our costs, though, are much higher. You’ve got a dozen or so burdens on that rate that drive the cost to the employer to $25.79. That’s a 35.74% increase or burden. The largest and most significant factor? Workers compensation. The least significant? Various other state taxes.

You can see this is an enormous increase to that initial hourly rate of $19/hour. All of this burden should always be accounted for when bringing on additional staff. You may think you can afford an employee at $19/hour, but can you afford them at $25.79?

FLLB (Fully Loaded Labor Burden)

A few indirect costs to consider.

  • Indirect costs
    • Cell phones
    • Auto
      • Gas
      • Registration



What is the total percentage of burden included in the Clear Estimates > Labor Rate Editor page?

  • Great question and thanks for asking. For reference, these are the rates Clear Estimates provides via your Options page > Labor Rate Editor. 9.75% is included for vacation, sick time and Medical. Roughly 15% for UI, SS and Medicare. An additional percentage for workman’s comp. This number fluctuates and varies depending on the trade.
  • Per your Labor Rate Editor Page: Labor rates are the hourly cost of performing tasks without overhead & profit. Included is the basic wage paid, Unemployment Insurance, Workman’s Compensation, Social
    Security and Medicare, and 9.75% for benefits such as vacation, sick leave and medical

Where can we find the labor burden speadsheet?

Will you be covering how burden would be set up in the accounting software such as Quickbooks?

  • Not in this webinar. That’s an hour, maybe two worth of content. If you’re interested in this, you may check out the question below, or email Karen for more information.

Mastering Quickbooks for contractors – where can we find this?

Contact Info:

  • Her website
  • Contact
    • (208) 939-9842
  • Email for resources

A huge thank you, again, to Karen for an amazing presentation.

Thanks for reading. That concludes our Spring 2019 Webinar Series. Thanks again for joining us. If there are any topics you’d like to see in the future, let us know!

Related Posts