W2 burden rate calculator

What the calculator does

The inputs match how payroll costs actually behave.

• Employer Social Security at 6.2% up to the wage base and Medicare at 1.45% with no cap.
• Federal unemployment at the effective 0.6% on the first $7,000 of wages.
• State unemployment with your own rate and wage base.
• Workers’ compensation per $100 of payroll.
• Liability insurance and benefits as a share of pay.
• Paid time off and paid training hours, which are paid but not billable.
• Burden shown for your assignment length and for 13-week and 52-week assignments side by side.

Why assignment length matters

Unemployment taxes apply only to the first slice of each employee’s wages. On a short assignment that slice is a large share of the total, so burden per hour is higher than on a full year.

The formulas

Burden is the sum of each cost; the bill rate works from the cost of a billable hour.

• Burden % = total employer cost ÷ wages × 100.
• Cost per billable hour = (wages + burden) ÷ (paid hours − paid time off − training).
• Lowest bill rate = cost per billable hour ÷ (1 − target margin).

Worked example

A $60 W2 rate for 26 weeks at 40 hours, with the example inputs shown in the calculator, gives a burden of about 15.6% and a loaded cost near $69 per paid hour. At a 20% target margin the lowest bill rate is about $87 an hour.

Check with your payroll provider

Your assigned rates, credits and class codes decide the real numbers. Use the defaults as a starting point and replace them with your own figures before quoting.

Frequently asked questions