Estimating in Building Construction

Labor 59

that are billable to a project and should not include vacation,
holiday, and sick leave hours.

Burdened Hourly Wage Rate Formula 7-6

EXAMPLE 7-5 BURDENED HOURLY WAGE RATE

Craft—Mason

Wage rate—$29.00 per hour

Hours worked—50 hours per week for 20 weeks and 40 hours

per week for 29 weeks

Paid vacation, holidays, and sick leave—Three weeks at

40 hours per week

Overtime—Time-and-a-half for any hours over 40 per week

Gas allowance—$100 per month

Annual bonus—$500

Social security—6.2 percent on the first $106,800 of wages

Medicare—1.45 percent of all wages

FUTA—0.8 percent on the first $7,000 of wages

SUTA—4.5 percent on the first $18,000 of wages

Worker’s compensation insurance—$7.25 per $100.00 of wages

General liability insurance—0.75 percent of wages

Health insurance (company’s portion)—$300 per month per

employee

Retirement—$0.75 per $1.00 contributed by the employee on

6 percent of the employee’s wages

$3,600

Health insurance$300/month12 months

General liability insurance$70,7200.0075$530

Workers’ compensation insurance$70,720

$7.25

$100

$5,127

SUTA$18,0000.045$810

FUTA$7,0000.008$56

Medicare$70,7200.0145$1,025

Social security$70,7200.062$4,385

Wages$70,720

$100 per month12 months$500

(10 hour per week20 weeks$29.00/hour1.5)

Wages(40 hours per week52 weeks$29.00/hour)

Burdened hourly wage rate 

WagesBenefits

Billable hours

The company contributes up to 4.5 percent (75 percent of 6 per-

cent) of the employee’s wages to the employee’s retirement account.

Assume that the employees take full advantage of this benefit.



7–5 Pricing Labor

To price labor, first the estimator must estimate the labor hours

required to do the work. These labor hours can then be multi-

plied by the burdened wage rate to develop the labor costs.

However, when the crew is made up of different crafts being

paid different wage rates, a weighted average burdened wage

rate must be determined. This is done by determining the total

cost for the crew for an hour and by dividing that amount by

the number of persons on the crew, as shown in Figure 7.2. In

Figure 7.1, a D-8 crew was used in the placement of the decora-

tive block. Figure 7.3 shows the makeup of the crew, which

includes three bricklayers and two bricklayer helpers.

Once the average crew wage rate has been found, it

can be multiplied by the number of labor hours to deter-

mine the labor costs. Formula 7-7 is used to determine the

labor costs.

Labor cost Adjusted labor hours

Weighted average burdened wage rate

Labor Cost Formula 7-7

EXAMPLE 7- 6 DETERMINING LABOR COST

From Example 7-2, there were 110 labor hours. The labor costs

would be the following:

Labor cost 110 labor hours $35.58/hour $3,913.80 

Burdened hourly wage rate$41.41 per hour

Burdened hourly wage rate

$70,720$18,715

2,160 hours

Billable hours2,160 hours

29 weeks

40 hours per week

Billable hours50 hours per week20 weeks

Benefits$18,715

$3,600$3,182

$810$5,127$530

Benefits$4,385$1,025$56

Retirement$70,7200.045$3,182

Burdened

Bare Hourly Labor Hourly Total Labor

Quantity Craft Wage Rate Burden Wage Rate Cost /Hour

3 Mason 29.00 12.41 41.41 124.23

2 Helpers 18.00 8.84 26.84 53.68

5 Total 177.91

Weighted Average Burdened Wage Rate 35.58

FIGURE 7.2.Weighted Average Burdened Wage Rate.