The hourly wage you pay is only part of the bill. Add mandatory payroll taxes and benefits to see your real labor cost — the one that should go into your bids.
| Base wages | — |
| Mandatory payroll taxes | — |
| Benefits | — |
| Fixed annual costs | — |
| True total cost / year | — |
⚠️ Indicative estimate — exact contribution rates vary by province/state and industry classification. Confirm with your accountant for precise figures.
The true cost goes well beyond the hourly wage. You need to add mandatory payroll taxes (CPP/QPP, EI, workers' compensation — roughly 12% to 16% of wages, varying by province or state) and benefits (health insurance, retirement plans, training — often another 5% to 10%). In total, the true employer cost is usually 20% to 35% higher than the posted hourly rate.
An employer pays their share of mandatory payroll contributions (CPP/QPP, EI, workers' comp) on top of gross wages. Add voluntary benefits (group insurance, retirement plans) and equipment or training costs, and the real cost is significantly higher than what shows up on a pay stub.
If you price jobs using only the wage you pay (without taxes and benefits), you systematically underestimate your labor cost — and your real margin. Using true cost instead of raw hourly wage is essential to bid profitably.