Labor Cost Calculator Formula
Understand the math behind the labor cost calculator. Each variable explained with a worked example.
Formulas Used
Total Labor Cost
total_labor_cost = hourly_rate * hours * num_workersCost Per Worker
cost_per_worker = hourly_rate * hoursDaily Labor Cost (8hr day)
daily_cost = hourly_rate * 8 * num_workersVariables
| Variable | Description | Default |
|---|---|---|
hourly_rate | Hourly Rate(USD) | 35 |
hours | Hours Worked(hours) | 40 |
num_workers | Number of Workers | 3 |
How It Works
How to Calculate Labor Costs
Formula
Total Labor Cost = Hourly Rate x Hours x Number of Workers
Labor is typically the largest expense for service businesses and contractors. Accurate labor cost estimation is critical for profitable bidding and project management.
Worked Example
3 workers at $35/hour for 40 hours each.
hourly_rate = 35hours = 40num_workers = 3
- 01Cost per worker = $35 x 40 = $1,400
- 02Total labor cost = $1,400 x 3 = $4,200
- 03Daily labor cost (8hr day) = $35 x 8 x 3 = $840
Ready to run the numbers?
Open Labor Cost Calculator