Calculating Payroll Burden


how to compute labor payroll burden in MacNail construction payroll software.
handling worker's workman's compensation as a part of burden on Master Index.


burden is a multiplier that adds extra $ to all labor costs, to cover employer taxes and insurance.
Generally it ranges from 1.12 to 1.5 (12% to 50% additional)


add the following together, then add 1:
FICA % (employer portion, both halves, currently 7.65%)
SUTA % (state unemployment, generally 2% to 5%)
FUTA % (federal unemployment, .8%)
workers comp % (usually 8% to 35% for carpenters, 1% to 3% for office)
general liability % (if figured as % of payroll. If not, add in overhead)
any employee benefits, vacation, etc (converted to % basis)


common errors & questions for MacNail construction payroll software's burden calculations:
don't add 1 to burden-- labor costs are then too low
don't include burden at all-- labor costs are all zero
do they have to put worker's comp in burden AND in the worker's comp column? Yes. Add it to burden (for job costing) AND put it into worker's comp column (to compute actual comp cost).
note: there's a writeup about burden in newsletter #12

Entered 4/25/95 by Dennis. Updated 11/22/2010.