ContractorMaths › 👷 Labour & Productivity › Labour Cost Calculator

Labour Cost Calculator

Calculate the true cost of labour for any job — including wages, superannuation, workers compensation, payroll tax, tools and overhead allocation. Most contractors under-price labour because they only count the wage rate.

Quick answer: True Labour Cost = Wage Rate × (1 + On-Costs%). In Australia, on-costs add approximately 30–45% to the base wage. A $35/hr worker actually costs $45–$51/hr all-in.

🔨 Labour Cost Calculator

Ordinary time rate before on-costs
Australia: 11.5% (2024-25)
Varies by trade: 3–12%
If above threshold in your state
Leave loading, training, uniforms
Total Labour Cost
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True Cost per Hour
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Base Wages
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On-Costs Total
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📐 How It Works

The true cost of labour is significantly more than the wage rate. Superannuation (11.5% in Australia), workers compensation insurance, payroll tax and leave entitlements all add to the base wage. Most contractors should budget 30–45% on-costs on top of the base wage rate when pricing labour.

On-Cost Rate = Super% + Workers Comp% + Payroll Tax% + Other% True Hourly Cost = Wage Rate × (1 + On-Cost Rate ÷ 100) Total Labour Cost = True Hourly Cost × Hours × Workers

📋 Worked Example

A plumber earning $42/hr. Super: 11.5%, Workers comp: 6%, Leave loading: 4%. Total on-costs: 21.5%. True cost = $42 × 1.215 = $51.03/hr. A 6-hour job with 2 plumbers = $51.03 × 6 × 2 = $612.36 in labour cost alone.

❓ Frequently Asked Questions

On-costs are employment costs on top of the base wage: superannuation (11.5% in 2024-25, rising to 12% in 2025-26), workers compensation insurance (3–12% depending on trade risk), payroll tax (if above state threshold), and leave loading (17.5% of 4 weeks annual leave). Total on-costs typically add 25–45% to the base wage.

Workers comp rates in Australia vary by trade and state: electricians 3–5%, plumbers 4–6%, carpenters 5–8%, roofing and demolition 8–15%. Check your state's WorkCover schedule for your specific trade classification.

Absolutely. Superannuation is a mandatory employer cost — 11.5% of ordinary time earnings in 2024-25. Many contractors forget to include it and effectively subsidise it from their profit. Always include super when calculating your true labour cost.

Not all hours worked are billable. Allow for travel time, breaks, tool maintenance, site meetings and wet weather. A common approach: multiply your billable hours by 1.15–1.25 to get total hours paid, or reduce your efficiency rate when pricing.