Fully-burdened cost
Fully-burdened cost is the total hourly cost of an employee including salary, payroll tax, benefits, software, and a share of overhead. It is typically 25% to 40% higher than salary alone.
Agencies that price from salary rather than burdened cost systematically underprice, because the gap is invisible until it appears in the annual accounts.
A working shortcut: annual salary multiplied by 1.25 to 1.4, divided by roughly 1,700 productive hours per year.
Related terms