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The True Cost of a Productive Field Hour

Estimate what one productive field hour actually costs using your own compensation, employer-cost and paid-time information.
5–8 min
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Pricing & Margin / Calculator

Productive Field-Hour Cost Calculator

Use average annual amounts for one typical employee in the labor category you are analyzing. Use the same employee basis and time period for all inputs.

Employee / Labor Category

Employer Labor Cost

$/yr
$/yr
$/yr
$/yr
$/yr
Optional. Exclude overhead, equipment, vehicles, pricing and profit.

Paid Hours and Non-Job Time

hrs/yr
hrs/yr
PTO dollars already stay in gross compensation. Subtract only the paid nonworking hours here.
hrs/yr
hrs/yr
hrs/yr
hrs/yr
Only subtract travel that is not already recorded as job labor time.
Your result is only as reliable as the averages you enter. Run the calculator separately for materially different labor categories.
The Formula
AVERAGE GROSS
COMPENSATION
+
EMPLOYER COSTS
=
TOTAL EMPLOYER LABOR
COST
÷
PRODUCTIVE / JOB-COSTED
HOURS
=
COST PER PRODUCTIVE FIELD
HOUR
CORE EDUCATIONAL EXPLANATION

Why Wage Alone Is Not Your Labor Cost

What Employer Labor Cost Includes

Average total employer labor cost combines gross compensation with employer payroll taxes, workers’ compensation, employer-paid benefits and other employer labor costs.

Paid Hours Are Not Productive Hours

Average productive / job-costed hours account for paid time that is not assigned to jobs.

Avoiding Double Counting: PTO and Travel

PTO: The pay is already included in compensation. Enter the nonworking hours here. Travel / mobilization: Only include hours here when they are not already assigned to jobs.

The Formula

AVERAGE GROSS COMPENSATION + EMPLOYER COSTS = TOTAL EMPLOYER LABOR COST ÷ PRODUCTIVE / JOB-COSTED HOURS = COST PER PRODUCTIVE FIELD HOUR.

INCLUDE | DO NOT INCLUDE
INCLUDE
DO NOT INCLUDE

Gross compensation

General overhead / office expense

Employer payroll taxes

Equipment / vehicle costs

Workers’ compensation

Profit / markup / margin

Employer-paid benefits

Selling / administrative costs

Other direct employer labor costs

Costs not tied to employing the worker

INTERPRETATION / DECISION GUIDANCE

How to Read Your Result

This is a labor-cost input.

This result is intended for estimating and job costing.

What This Number Is Not

It is not a selling rate, overhead recovery, equipment cost, profit, markup, or margin.

Assumptions and Disclaimers – Your result is only as reliable as the averages you enter.

Related Decision Path
You are here The True Cost of a Productive Field Hour
APPLY IT TO YOUR BUSINESS

Some labor-cost decisions need your actual numbers.

If you want help replacing example assumptions with reviewed company figures, or you want a second set of eyes on how you separate labor cost from pricing, we can walk through your numbers together.
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