Guides / Payroll burden

How to calculate payroll burden for a painting bid

The wage on the check is not your labor cost. Payroll burden is the employer-paid extras on top of wages. In CutInMath, loaded rate = wage × (1 + burden %). Get the burden wrong and every paint bid is wrong in the same direction.

This page explains the arithmetic painting estimators use. It is not tax, legal, or insurance advice. Use the rates on your own payroll reports and insurance declarations, and ask a payroll provider or tax professional when you are unsure.

What belongs in burden

For a bid, burden usually means the employer costs that scale with wages:

  • Employer Social Security and Medicare (FICA)
  • Federal unemployment tax (FUTA)
  • State unemployment tax (SUTA / SUI) — rate set by your state
  • Workers' compensation insurance — rate from your policy
  • Any employer-paid benefits you want allocated to field labor (health, PTO accrual, retirement match)

Federal income tax withheld from the employee is not employer burden. The employee's own FICA withholdings are not employer burden either.

Federal pieces you can look up (2026)

These employer rates are published by the IRS:

  • Social Security (employer): 6.2% of wages, up to the annual wage base. For 2026 the wage base is $184,500 (IRS Topic 751; Publication 15 (2026)).
  • Medicare (employer): 1.45% of all covered wages, with no wage base (IRS Topic 751). Combined employer FICA is therefore 7.65% on wages below the Social Security wage base.
  • Additional Medicare Tax (0.9% on wages over $200,000) is withheld from the employee. There is no employer match (IRS Topic 751), so do not put it in burden.
  • FUTA: The FUTA rate is 6.0% on the first $7,000 of wages paid to each employee in the year. Most employers who pay state unemployment tax on time receive a credit of up to 5.4%, which brings the net federal rate to 0.6% (IRS Topic 759). Credit-reduction states pay more; check the current IRS list if that applies to you.

State unemployment and workers' compensation

These two often matter as much as FICA, and they are not the same for every company:

  • State unemployment (SUTA). Each state sets its own taxable wage base and employer rate. New employers often start at a standard new-employer rate; your rate later depends on your claims history. Read it from your state unemployment account, not from a national average.
  • Workers' compensation. Premiums are usually quoted as dollars per $100 of payroll for a class code. Painting contractors use painting or wall-covering class codes that vary by state. Your declaration page or broker quote is the source of truth. Experience modification (EMR) multiplies the base rate up or down.

Turning the pieces into one burden %

CutInMath asks for a single percentage. Build it from your real costs:

  1. Start with employer FICA: 7.65% for wages under the Social Security wage base.
  2. Add an effective FUTA rate. For a full-time painter well above $7,000 a year, net FUTA at 0.6% on $7,000 is only about $42 a year. Spread over annual wages that is often under 0.3%. For part-time or short-tenure labor it is higher as a percent of that person's wages.
  3. Add your actual SUTA rate from the state notice.
  4. Add your workers' comp rate as a percent of payroll (rate per $100 ÷ 100, then × EMR if applicable).
  5. Add benefit cost ÷ wages if you allocate benefits into the loaded rate.

Burden % ≈ FICA + effective FUTA + SUTA + workers' comp % + benefits %

Illustrative example (not your rate)

Suppose a painter earns $23.75/hr (the BLS May 2025 median for construction and maintenance painters; BLS), you use employer FICA of 7.65%, you estimate effective FUTA at 0.25%, your state unemployment notice shows 2.0%, and your workers' comp declaration works out to 5.0% of payroll, with no benefits allocated. Burden ≈ 7.65 + 0.25 + 2.0 + 5.0 = 14.9%. Loaded rate ≈ $23.75 × 1.149 ≈ $27.29/hr.

The sample bid in CutInMath uses a 20% burden as a round, conservative placeholder that can also absorb light benefits. Replace it with your number. At the same wage, 20% burden means a loaded rate of $28.50/hr.

Where people underbid

  • Using the wage alone and ignoring employer FICA.
  • Copying a national "average burden" instead of reading their own SUTA and workers' comp bills.
  • Forgetting that overtime multiplies both the wage and the percentage-based burden items.
  • Leaving benefits out of the rate and then wondering why the bid felt profitable until open enrollment.

Use it in CutInMath

Open a bid, set the wage, and enter your burden percentage. CutInMath multiplies them into the loaded rate used for labor cost, break-even and the recommended job price. Pair this with the bidding guide and the production rates guide.

Open the calculator