What does labor burden refer to in construction?

Labor burden in construction refers to the additional costs associated with employing workers beyond their direct wages. This includes expenses such as payroll taxes, workers' compensation, health insurance, retirement contributions, and other benefits that an employer must pay in addition to the base salary of their employees.

Understanding labor burden is crucial for accurate cost estimation, as it impacts the overall budgeting for a project. Accurately accounting for labor burden ensures that all costs related to hiring and retaining employees are included in the project estimate, leading to better financial planning and project management.

While total salaries, overtime pay, and profits are important factors in labor-related costs, they do not encapsulate the broader range of expenses that constitute the labor burden. Therefore, recognizing labor burden's comprehensive nature helps construction estimators make informed and precise calculations.