Film Accounting Glossary
Labor burden
What is labor burden?
Labor burden is the total employer cost of employing someone beyond their gross wage: payroll taxes, union pension and health, vacation and holiday, workers' compensation, and payroll company fees.
It is the same concept as fringes, framed from the budgeting side, and it commonly adds a quarter to a half again on top of the wage. Any labor estimate quoted without burden is not a cost estimate.
Example
A department budgeted at $180,000 of wages actually costs about $250,000 once payroll taxes, pension and health, vacation and holiday, workers' compensation, and the payroll company's fee are added. Quote the $180,000 to a financier and the number is not a cost estimate.
Figures are illustrative, chosen to show the mechanics rather than to quote market rates.
Where you'll see it
The budgeting-side view of fringes, applied per labor category rather than as one blended rate.
Common mistake
Quoting a department's wage total as its cost. Burden commonly adds a quarter to a half again, so the wage figure alone is never the answer to what it costs.
Related questions
- What is included in labor burden?
- Employer payroll taxes, union pension and health, vacation and holiday pay, workers' compensation, and the payroll company's service fee.
- How is labor burden different from fringes?
- They describe the same cost. Burden is the budgeting-side framing, fringes the payroll-side framing, and both need to be applied per labor category.