True labor cost for roofing crews
You pay a roofer $25 an hour. That is not what he costs you. By the time payroll tax, workers comp, and the hours he cannot bill are added, it is closer to $41. If your job costs and your prices use $25, every job looks better than it is.
The formula
True hourly cost = (Wages + Employer taxes + Workers comp + Benefits + Other) divided by Billable hours
Worked example, one crew member
| Wage | $25 an hour, 2,080 hours a year | $52,000 |
| Employer payroll taxes | FICA 7.65% plus FUTA and SUTA, call it 9% | $4,680 |
| Workers comp | Roofing class, say $18 per $100 of payroll | $9,360 |
| Benefits, PTO, small tools, phone | $3,500 | |
| Total cost | $69,540 | |
| Billable hours | 2,080 minus 2 weeks vacation, 1 week holidays, 2 weeks rain, 10% drive and load time | about 1,690 |
| True hourly cost | $69,540 divided by 1,690 | $41.15 |
The burden here is about 65% over the wage. Your comp rate and your weather will move it. Most roofing crews land between 35% and 65% once unbillable time is counted. Payroll burden alone, before unbillable time, is usually 20% to 35%.
Why it matters
- Pricing. A crew day priced at $25 an hour is underpriced by about 65%. That is the whole margin on a tight job.
- Sub vs W-2. A sub at $65 a square may be cheaper than your own crew once burden is in. Or not. You cannot know without this number.
- Job costing. Tag crew hours to jobs at the burdened rate, not the wage, or every job report is wrong the same direction.
How to get the real inputs
- Payroll tax: from your payroll provider's annual summary, employer portion only.
- Workers comp: the audited rate for the roofing class code on your policy, not the blended rate.
- Unbillable time: pull last year's timesheets. Count hours with no job tag. Most owners are surprised.
We build a burden rate for every job costing client from their actual payroll and comp policy. See job costing.
Questions
What is a normal labor burden for roofing?
Payroll burden alone runs 20% to 35% over wages. With unbillable time counted, the true hourly cost is often 35% to 65% over the wage.
Does this apply to subs?
No. A sub's rate is the cost. But compare it to your burdened W-2 rate, not the raw wage, when deciding which to use.
Should burden go in job costing?
Yes. Apply the burdened rate to crew hours on each job. Otherwise every job margin is overstated by the same percentage and you cannot see which ones are actually weak.