Glossary
Loaded Labor Cost Formula: $28.75 Wage = $40–$48/hr
Defined for HVAC, plumbing, and electrical operators.
Definition
Loaded labor cost is the true hourly cost of a technician once you add everything beyond their base wage — payroll taxes, benefits, workers' comp, vehicle and fuel, tools, training, and non-billable time. A technician paid $28.75 an hour often costs $40–$48 an hour fully loaded. Pricing off the wage instead of the loaded cost is one of the most common reasons contractors look profitable on paper but aren't: every job is quietly underpriced by the burden the wage rate ignores.
What Goes Into the Load
Base wage plus payroll taxes, health and retirement benefits, workers' compensation, the truck and fuel, tools and software, training, and — critically — non-billable hours. Spread the annual cost over actual billable hours and the effective rate is far above the wage. The loaded labor cost calculator runs that math for your own techs.
Why It Distorts Profitability
If you price jobs assuming a $28.75 labor cost when the real number is $45, every hour of labor sold loses margin you never see. Job costing on loaded labor is what turns a 'busy but broke' shop into a profitable one, because it prices work against its true cost. Tracking it weekly is part of contractor KPI development.
Loaded Labor Cost FAQs
How much more than the wage is loaded labor cost?
Commonly 40–70% more. A technician paid $28.75/hour often costs $40–$48/hour fully loaded once taxes, benefits, workers' comp, vehicle, tools, and non-billable time are included.
Why do my jobs look profitable but the business isn't?
Usually because jobs are priced off the wage rate, not loaded labor cost. The gap between the two silently underprices every job, so paper margin doesn't reach the bank.
Keep Going
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