Hospitality Labor Burden Calculator
Thin benefits keep the percentage low, but tips, turnover, and mandated sick leave still add over $4 an hour to an $18 cook.
Pre-filled with hospitality estimates: workers comp 2.0%, benefits 4.0%, 7 PTO days, overhead 4.0%. Edit any field below.
Social Security + Medicare (7.65%)
Federal unemployment (effective 0.6%)
Health, retirement, etc.
$37.10/hr
Fully burdened rate
23.6%
Burden added
$77,158
Annual cost
Burden breakdown
A $37.10/hr fully burdened rate is real money per placement. Skillora's AI screens every candidate so you only pay for the right ones.
Estimates only, using editable 2025 US defaults. Tax and insurance rates vary by employer, classification, and locality. Verify with a licensed accountant before relying on these figures.
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A line cook on $18 an hour costs a restaurant about $22.25 an hour at the defaults on this page. Hospitality carries the lowest labor burden percentage of the industries on this site, yet operators still get it wrong, because tips, tip credits, and turnover change how the percentages apply. This hospitality labor burden calculator starts from restaurant and hotel defaults so a labor budget matches the P&L.
Why labor burden is different in hospitality
Hospitality burden is different because of tips. Employer FICA is owed on reported tips as well as cash wages, so the 7.65% applies to more than the base wage on a tipped role. Restaurants can recover part of that through the FICA tip credit on their federal return, but the cash still goes out each payroll. For servers and bartenders, enter the base wage plus expected reported tips as the pay rate, then treat the credit as a year-end offset rather than a lower burden.
Benefits are thin but no longer optional. Employers with 50 or more full-time-equivalent staff must offer ACA-compliant coverage, and hourly hospitality workers who qualify often decline it, which is why the 4% default is low. Paid sick leave is the faster-growing cost: a long list of states and cities require accrual, usually one hour per 30 worked, and it applies to part-time staff. The 7-day PTO default covers statutory sick leave plus a few holidays.
Turnover is the hidden burden line. Annual turnover in restaurants and hotels routinely exceeds that of any other industry, and every replacement costs onboarding, training, uniforms, and the productivity of the first weeks. The 4% overhead default is an estimate for that churn; operators who calculate their own cost per hire often find it higher.
Worked example with hospitality defaults
Take a line cook at $18.00 an hour. Add employer FICA at 7.65%, FUTA at 0.6%, state unemployment at the 2.7% US default, workers comp at 2.0%, benefits at 4.0%, and 6.7% for overhead plus 7 PTO days. Total burden is 23.6%, so the fully burdened rate is $22.26 an hour, or $46,295 a year on 2,080 hours against $37,440 of base wages.
| Role (pay estimate) | Pay rate | Burden | Fully burdened | Annual cost |
|---|---|---|---|---|
| Line cook | $18.00/hr | 23.6% | $22.26/hr | $46,295 |
| Front desk agent | $17.00/hr | 23.6% | $21.02/hr | $43,723 |
| Server (base wage, before tips) | $16.00/hr | 23.6% | $19.78/hr | $41,151 |
Pay rates are rounded estimates near national medians, and the SUI line uses the US default. Open a state page from the labor burden by state list to swap in a local SUI estimate, then enter your own class rate for workers comp.
What drives the range
Tipped versus non-tipped roles
Tipped roles carry FICA on reported tips. Non-tipped roles like cooks and housekeepers do not. Run the two groups separately, with the tipped group using base wage plus reported tips as the pay rate.
Hotel versus restaurant class codes
Hotels carry a different workers comp class than restaurants, and housekeeping has higher injury rates than front desk work. Use the class rate from your policy rather than the 2% midpoint estimate.
Local sick leave and minimum wage rules
Cities such as Seattle, San Francisco, and New York add sick leave accrual and higher minimum wages on top of state rules. Both raise burden: the accrual through PTO, the wage floor through the base rate.
Seasonal staffing and unemployment claims
Seasonal resorts and event venues lay off staff each year, and each layoff can become an unemployment claim that raises the SUI experience rate. Enter your assigned rate from the state notice, not the new-employer default.
Hospitality burden defaults
| Input | Default | Typical spread (estimate) |
|---|---|---|
| Workers comp (% of payroll) | 2.0% | 1.5% to 4.0% by class code |
| Benefits (% of wages) | 4.0% | Health and retirement only |
| Paid time off | 7 days | 2.7% of a 2,080-hour year |
| Overhead (% of wages) | 4.0% | Entered as 6.7% with PTO |
| Typical total burden | 23.6% | 14% to 24% |
Sources: benefits share from the BLS Employer Costs for Employee Compensation release; workers comp variation from NCCI class codes and state rating bureaus; pay estimates near BLS OEWS medians. PTO, overhead, and the burden range are estimates, not published figures.
- BLS Employer Costs for Employee Compensation (ECEC): benefits share of total compensation by industry
- NCCI class codes and state workers compensation rating bureaus: rate variation by classification
- BLS Occupational Employment and Wage Statistics (OEWS): median hourly wages by occupation
- PTO, overhead, and burden range defaults are Skillora estimates from staffing practice, not published figures
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Labor burden calculator with the generic US defaults, and labor burden by state for local SUI estimates in all 50 states and DC.
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