Burden Rate Calculator

Formula

The formula to calculate the burden rate (BR) is:

\[ BR = \frac{IC}{DLC} \]

Where:

$ BR $ is the burden rate.
$ IC $ is the total indirect costs associated with hiring and maintaining employees.
$ DLC $ is the total direct labor costs of all employees.

What is a Burden Rate?

A burden rate is a ratio of indirect costs associated with hiring and maintaining employees to the direct costs of wages of those employees. The indirect costs include training, benefits, sick leave, pensions, etc.

Example Calculation

Consider an example where:

Total Indirect Costs (IC): $50,000
Total Direct Labor Costs (DLC): $200,000

Using the formula to calculate the burden rate:

\[ BR = \frac{50000}{200000} = 0.25 \]

This means that the burden rate for this example is 0.25.