Custom Home Builder Real Cost of Labour Calculator
What you pay a custom home tech and what an hour of their time actually costs you are two different numbers. See your true cost per billable hour once payroll burden and non-billable time are in.
Built for custom home owners who'd rather know than guess. Your numbers stay in your browser.
Burden = taxes, insurance, benefits, paid time off. Utilization = the share of paid hours that are actually billable once travel, admin, and downtime are out.
| Wage you pay | $29/hr |
| Burdened wage | $38/hr |
| True cost / billable hour | $74/hr |
| Hidden cost per hour | $46/hr |
Bill labour below the true cost and every hour loses money, no matter how busy the crew looks.
What you get
Three reasons this earns its place on your desk
See the real hourly cost
The gap between the wage you pay and the true cost per billable hour is usually wider than owners guess.
Stop under-charging labour
Once you know the real number, you can set a labour rate that actually covers burden, downtime, and overhead.
Price from facts, not gut
Feed the true hourly cost straight into your custom home quotes instead of guessing.
How it works
The math behind the number
Your true cost per billable hour is the burdened wage (pay plus taxes, insurance, and benefits) divided by the share of paid hours that are actually billable. Non-billable time spreads the same cost over fewer hours, so the real number sits well above the wage.
The defaults
Custom Home Builder benchmarks (2026)
The calculator starts from the 2026 figures sourced below, so the first number you see is realistic, then you replace them with your own.
| Benchmark | Typical value |
|---|---|
| Average job value | $500,000 |
| Gross margin | 20.7% |
| Net profit margin | 8.7% |
| Median field-tech wage | $28.51/hr |
| Payroll burden | 35% |
| Billable utilization | 65% |
| Billed labour rate | $50/hr |
| Close rate | 20% |
| Marketing % of revenue | 5% |
Sources
- NAHB — New Study Provides Statistics on Builder Financial Performance (Cost of Doing Business 2025, 2023 data)
- NAHB Eye on Housing — Builders' Profit Margins Improved in 2023 (20.7% gross / 8.7% net, $11.3M avg revenue, cost-of-sales 79.3%, opex 12.0%)
- BLS Occupational Outlook Handbook — Carpenters (May 2024 median $59,310/yr = $28.51/hr)
- BLS Occupational Outlook Handbook — Construction Laborers and Helpers (May 2024 median $46,050/yr = $22.14/hr)
- SmartBarrel — Labor Burden in Construction (30-40% of base wage typical)
- Bridgit — Construction Workforce Utilization Rate (40-70% typical)
- Bokka Group — Average Conversion Rates for Home Builder Sales (~20% appointment-to-sale, ~4% lead-to-sale)
- HomeAdvisor — How Much Does a Carpenter Cost per Hour (2025, $40-$70/hr billed)
- EPCON Franchising / NAHB & SBA marketing-budget guidance (~5% of revenue, 1-2% advertising)
- Sweeten — Average Cost to Build a House in 2025 (~$428K standard build / $350K-$1.5M custom)
Get the download
Email me the editable worksheet
Get the spreadsheet so you can run every role and keep your true labour cost current.
FAQ
Common questions
- What is the real cost of labour?
- It is the burdened wage (pay plus taxes, insurance, and benefits) divided by the share of paid time that is actually billable. Non-billable time — travel, admin, downtime — spreads the same cost over fewer billable hours, so the real number is higher than the wage.
- What is payroll burden?
- The employer costs on top of wages: payroll taxes, workers comp, insurance, benefits, and paid time off. For most trades it adds 15 to 30 percent on top of the base wage.
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