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That calculation is: Employee's Fully Burdened Labor Rate or total employee cost = (Labor Burden Costs PLUS gross payroll labor cost) DIVIDED BY the number of hours (production).
How to calculate labor burden rate. The labor burden rate is calculated by dividing labor burden cost by wage costs.
The fully burdened labor rate is the workers pay rate with all the added overhead costs included which effectively gives you your fully loaded employee cost. The labor burden component are just the overhead costs on a per hour basis.
That calculation is: Employee's Fully Burdened Labor Rate or total employee cost = (Labor Burden Costs PLUS gross payroll labor cost) DIVIDED BY the number of hours (production).
It includes wages, as well as other costs like payroll taxes, health insurance, training, and paid time off. Labor burden is typically expressed as a percentage of base wages.