A technician's fully burdened hourly rate is what that tech costs a shop per hour on the clock, not the number on their pay stub. It adds employer payroll taxes, workers' compensation insurance, benefits, paid time off, and vehicle cost to the wage, then divides the total by the hours the tech bills out. Price a job off the wage alone and every ticket underprices the labor on it.
Why the wage isn't the real cost
A pay stub shows one number: the wage. A shop pays several more on top of it, and none of them show up on that stub. Payroll taxes are mandatory and mostly fixed by federal rules. Workers' comp, benefits, and vehicle cost depend on the shop's own policies, and on what the state and the insurance carrier charge. Unbillable time isn't a cost you add at all. It's a smaller number you divide by, and it moves the final rate more than anything else on this list.
The inputs to a burdened rate
These six items, added together and divided by billable hours, turn a wage into the number a price book should use.
- Wage: the hourly base pay before anything else is added.
- Payroll taxes: the employer's share of Social Security, Medicare, and federal unemployment tax, plus state unemployment tax.
- Workers' compensation insurance: a premium set by the state and the class code that matches the work.
- Benefits: health insurance, retirement contributions, and anything else the shop pays toward.
- Paid time off: vacation, holidays, and sick days the tech is paid for but never bills.
- Vehicle: fuel, insurance, and maintenance on the truck the tech drives.
Payroll taxes: the federal rates are public
Two of these are fixed and don't vary by state. Social Security tax is 6.2 percent from the employer and 6.2 percent from the employee, 12.4 percent total. Medicare tax is 1.45 percent from each side, 2.9 percent total (irs.gov, Tax Topic 751, checked September 27, 2026). Combined, the employer's share of FICA is 7.65 percent of wages.
Federal unemployment tax (FUTA) is 6.0 percent on the first $7,000 of each employee's wages for the year. Employers who pay their state unemployment tax in full and on time usually qualify for a credit of up to 5.4 percent, which brings the net FUTA rate down to 0.6 percent (irs.gov, Tax Topic 759, checked September 27, 2026). Because it only applies to the first $7,000 a year, FUTA adds a few dollars a month per tech, not a meaningful hourly figure.
State unemployment tax (SUTA) sits on top of FUTA and isn't fixed. Each state sets its own rate, and a shop's rate moves with its claims history. Check your own state unemployment agency or your last rate notice for the number that applies to your account, rather than assuming a rate from another state or another shop.
Workers' compensation: no single number applies
Workers' comp premiums are set per class code, and HVAC, plumbing, and electrical work each carry their own code and rate. Rates also vary by state and by carrier. There's no published national figure that fits every shop, so use the premium on your own policy, or ask your carrier or your state's rating bureau what the current rate is for your class code and state.
Benefits and paid time off
The most recent federal data on this comes from the Bureau of Labor Statistics. For private industry workers, wages and salaries make up 70.0 percent of total compensation cost and benefits make up the remaining 30.0 percent, on average, across all industries (bls.gov, Employer Costs for Employee Compensation, released September 9, 2026). That's a broad average, not a number for your shop's specific health plan or PTO policy. Use what the shop pays for health coverage, retirement match, and paid days off instead of applying a national ratio to your own payroll.
Vehicle cost
Add fuel, insurance, and maintenance for the truck a tech drives, spread across the hours that tech works in a year. A shop that owns the vehicle outright still has insurance, fuel, and upkeep costs to divide across those hours; a shop making a loan or lease payment adds that on top.
Unbillable time: the number that changes the rate the most
Every input above adds a cost. This one changes the denominator, and it moves the final rate more than any single cost line. A tech paid for 2,080 hours a year (40 hours a week, 52 weeks) doesn't bill 2,080 hours of work. Drive time, callbacks, training, and slow days come out of that number before you get to hours a customer pays for.
Divide total annual cost by the hours paid and the rate looks lower than it really is. Divide by the hours billed and the rate reflects what the shop needs to charge to cover a tech who's only productive part of the time they're on the clock. Track billable hours for a few months if you don't already know the ratio. Guessing at it in either direction throws off every price built on the result.
A worked example
The figures below are a made-up example with round numbers, not a real payroll. Use your own wage, tax rate, insurance premium, benefits cost, and billable-hour count instead.
| Line | How it's figured | Annual amount |
|---|---|---|
| Wage | 2,080 paid hours x $28/hour | $58,240 |
| Employer payroll taxes | 7.65 percent FICA, plus FUTA and state unemployment, illustrative 10 percent total | $5,824 |
| Workers' compensation | Illustrative premium for this class code | $3,600 |
| Benefits | Illustrative health and retirement contribution | $6,000 |
| Vehicle | Illustrative fuel, insurance, and maintenance | $7,200 |
| Total annual cost | Sum of the five lines above | $80,864 |
| Billable hours | Of the 2,080 hours paid, illustrative 1,400 billed | 1,400 |
| Burdened hourly rate | $80,864 divided by 1,400 billable hours | $57.76 |
The $28 wage becomes a $57.76 burdened rate once every cost is added and the total is divided by billable hours instead of paid hours. That's the number a price book should use for labor, not the wage.
Where this number goes next
The burdened rate is one of four inputs to a flat-rate task price, alongside materials, overhead, and profit margin. The guide to building a flat rate price book covers the other three and works through a full task price. The flat-rate price calculator takes a burdened rate as one of its inputs and returns a task price.
Recalculate the burdened rate when a wage changes, when workers' comp renews at a new premium, when benefits costs move, or at least once a year. A rate built on last year's costs undercharges for labor on every job until someone catches it. SpanCrew charges $99 a month flat for the whole crew, with no per-tech pricing, currently in early access.