What Is the Way to Make Burden Rate Calculations?


Quick Answer

In order to make burden rate calculations, determine the person's hourly wage, days that person can work and day that person may be absent, multiply potentially absent days by eight hours and subtract this figure from available hours per year, determine how much money the employee costs per year, take his or her available hours and multiply this by the person's hourly wage and then divide this number of actual hours worked. When determining the total employee costs per year, make sure to include all money related to insurance, supplies, payroll taxes, benefits, training and meals.

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Full Answer

A burden rate describes the indirect costs a business has for their employees. This is the costs in addition to payroll costs and gross compensation.

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