How to Calculate Restoration Crew Labor Cost

Crew size, hours, and hourly cost determine the labor total for each task. Keep those inputs separate when the crew or rate changes during a job.

To total your own tasks, open the Crew Labor Calculator. This guide explains the arithmetic and how to enter each input.

Person-Hours Are Not Elapsed Hours

Elapsed hours measure the clock. Person-hours measure the work.

If three people work together for eight hours, eight hours pass on the clock, but the job consumed 24 person-hours. Labor cost follows person-hours, because each person is paid for their time.

The calculator asks for Crew Count and Hours per Person separately for this reason. It multiplies them to get person-hours.

The Basic Calculation

• Person-hours = crew count × hours per person
• Task cost = person-hours × hourly cost
• Labor subtotal = the sum of all task costs

Hypothetical example: 3 people × 8 hours × $30 per hour.

• Person-hours: 3 × 8 = 24
• Task cost: 24 × $30 = $720

The calculator's Load Example button fills in a sample so you can see how each row is shown.

Separate Rows for Different Tasks

Different tasks often involve different crew sizes and different people.

Hypothetical example: on the same job, a second task uses 2 people for 3 hours each at $45 per hour. That row is 6 person-hours and $270. Together with the first task, the labor subtotal is $990 and total person-hours are 30.

Give each task its own row and name it in Task Name (Optional), such as "Extraction" or "Demolition." A row with some but not all of the three numbers filled in is left out of the totals and counted as incomplete.

Loaded Cost Versus Selling Rate

The Hourly Cost field should hold your cost, not the rate you charge a customer.

• A base wage is what the employee is paid per hour.
• A loaded cost adds employer costs you associate with that labor, such as payroll taxes, insurance, and benefits.
• A selling rate is what you bill. It is meant to cover cost, overhead, and profit.

Mixing these in one calculation makes the result meaningless. If you want to compare cost with what you bill, calculate each separately, and use the Job Cost and Margin Calculator for the comparison.

Applying Burden Without Double Counting

The Burden (Optional) field applies one percentage to the labor subtotal:

• Total = subtotal × (1 + burden ÷ 100)

Continuing the first example, a 20% burden on $720 adds $144, for a total of $864. The person-hours stay at 24.

Use burden only when the hourly cost is a base wage. If you already entered a loaded cost, leave burden blank. Applying both counts the same employer costs twice.

What burden covers is your decision. The calculator does not assume any tax, insurance, or benefit rate.

Handling Overtime

The calculator does not calculate overtime automatically, because overtime rules depend on the employee, the jurisdiction, and your pay practices.

If some hours are paid at a different rate, enter them as a separate row with the rate you actually pay for those hours, and name the row clearly, such as "Extraction — overtime hours." Confirm which hours qualify with your payroll provider or employment advisor. This guide is not legal or payroll advice.

What the Numbers Do Not Tell You

• The calculator does not suggest wages or market rates. Example rates in this guide are hypothetical.
• It does not estimate how many hours a task should take.
• It does not include overhead or profit.

For how labor fits into job-level costing, see Job Costing for Water, Fire, and Mold Restoration Projects. For the broader cost picture, see Restoration Business Profitability.

Total Your Crew Labor

Enter each task in the Crew Labor Calculator and use Copy Summary to paste person-hours and labor totals into your job file.

Frequently Asked Questions

What Is the Difference Between Person-Hours and Elapsed Hours?

Elapsed hours are clock time. Person-hours multiply clock time by the number of people working. Three people for eight hours is 8 elapsed hours and 24 person-hours.

Should I Enter My Billing Rate as the Hourly Cost?

No. Enter what the labor costs you. Billing rates include overhead and profit, so mixing them with cost makes the total misleading.

When Should I Use the Burden Field?

Use it when the hourly cost is a base wage and you want to add employer costs as a percentage. Leave it blank if the hourly cost is already loaded.

How Do I Include Overtime?

Enter overtime hours as a separate row with the rate you actually pay. The calculator does not apply overtime rules automatically.

Disclaimer

This article provides general operational education, not accounting, payroll, tax, or legal advice. Hypothetical rates and hours are illustrations, not market rates or benchmarks.