Calculating Labor Costs

Labor is one of the most difficult costs to predict in an estimate. Basically, it’s determined by calculating the hours required to complete a task or project, and then charging what it costs your business to compensate its field employees. But trying to predict the time required to complete a task or a project, especially if someone other than you will do the work, requires judgment and experience. You can get unit costs for labor from a cost estimate book, but you have to be careful. The numbers in the book are unlikely to accurately reflect your own hard costs, even if you apply the regional adjustment factors provided. Your labor charges must reflect