EP286: How Contractors Can Calculate True Labor Costs and Boost Profits

If you’re paying an employee $30 an hour, they don’t actually cost your construction business $30 an hour.In this episode of the Hammer & Grind Podcast, Brad Huebner breaks down how contractors can calculate their true labor costs and use the right labor burden rate to protect their profit margins. Your employee’s hourly wage is only one part of the total cost. Payroll taxes, workers’ compensation, employee benefits, paid time off, training, meetings, and other non-productive paid hours can significantly increase what that employee actually costs your business.You’ll learn how to:Calculate your true labor burden rateSeparate employee wages from total labor costsAccount for payroll taxes and workers’ compensationFactor in employee benefits and other direct labor costsCalculate the cost of non-productive paid timeDetermine your true cost per productive hourUnderstand the difference between markup and gross profit marginAvoid underpricing labor on construction estimatesIdentify hidden labor-related profit leaksPrice your labor correctly across multiple employees and crewsIf you’re a contractor who wants better construction estimating, stronger profit margins, and a clearer understanding of what your employees actually cost your business, this episode is a must-listen.Get the Labor Burden Worksheet:Use the worksheet to calculate your labor burden rate and understand your true labor cost per hour, day, week, month, and year. The worksheet can also help you calculate costs for different employee teams and crews.Links to resourcesGrab my free job costing worksheet and start job costing every job right away.https://go.hammercrm.com/widget/form/4Bws6E9GGX0RZPoED1bnWant to go deeper?Check out the Contractor Profit Blueprint: https://www.thecontractorprofitblueprint.com/Book a strategy call with Brad: https://hammerandgrind.com/qualification-websiteEnjoying the podcast? Visit our website at https://www.hammerandgrindpodcast.com for the latest episodes, resources, and more.Have a question, story, or topic you'd like us to cover? Leave us a message here: https://www.hammerandgrindpodcast.com/voicemail.We'd love to hear from you, and your message could be featured on a future episode!Help us get the word out to other contractors by leaving us a review or sharing our podcast! Hosted on Acast. See acast.com/privacy for more information.