Every contractor has had the thought: "I need help." Most then look at the wage they'd have to pay, feel the fear, and stay exactly as tired as they are.
The fear is honest but misinformed. It's aimed at the wrong number. The wage is $28 an hour. The employee is not $28 an hour. The employee is everything the wage touches: payroll taxes, workers' comp, benefits, the truck they ride in, the tools they wear out, the supervision they need. That's the burdened rate, and it's the only number that tells the truth about hiring.
01
The true cost, assembled
Wage is the sticker. The burdened rate is the price:
- Base wage
- Payroll taxes, roughly 9% to 12% on top
- Workers' comp, which in contracting can exceed the taxes
- Benefits, if you offer them, and you should price them even if you don't yet
- Equipment share: truck hours, tools consumed, fuel
Add them, line by line, for a field hire at a $28 wage:
- Base wage: $28.00
- Payroll taxes, 11%: $3.08
- Workers' comp, high-rate trade, 15%: $4.20
- Benefits, 7%: $1.96
- Truck, tools, and fuel share: $3.76
Total: $41.00 an hour. There's the title. The $41 hour isn't an argument against hiring. It's the arithmetic that makes a hire safe, because now you can compute what the hire must produce.
02
The break-even hour
A hire pays for itself at a specific, computable point: the contribution margin of the production they add, plus any actual expenses they verifiably eliminate, equals their incremental cost. Below that point, the hire is a loan you gave the company. Above it, the hire is a machine that prints margin. One thing is deliberately absent from that formula: recovered owner time. Freed hours are capacity, not cash. They count only when they convert - into a job sold that otherwise wasn't, or an expense gone that otherwise stayed. Lesson 7 gave you the currency: revenue per field day. This lesson prices the person in the same currency.
03
The True-Cost Machine
Move the sliders. Nothing here touches your saved numbers.
- The burdened hourly rate
- $41.00 / hr
- What the hire costs per month, all in
- $7,107 / mo
- Contribution per added job
- $1,800
- Added contribution, monthly
- $0 / mo
- The verdict: cash in minus cash out
- −$7,107 / mo
- Owner time recovered - POTENTIAL VALUE, not counted
- $1,613 / mo
- The shortfall in Lesson 7 field days
- 6.2 field days
Move a slider and watch what happens to the money.
MIKE'S EXAMPLE
Mike · General contractor, 43
Mike's next hire was an estimator, not a carpenter. Salary basis, not hourly.
- Salary: $52,000
- Payroll taxes at 9%: $4,680
- Benefits: $2,120
- True cost: $58,800 a year, $4,900 a month, $28.27 an hour burdened (58,800 / 2,080)
Notice what's missing from that list: no truck, no roof-rate workers' comp. An office estimator carries the lightest burden in the company, and that's part of why he was first.
Break-even, cash only. The hire eliminated a real expense first: the outside takeoff service, $400 a month, gone from month one. Added production: the estimator's organized pipeline landed its first extra job in month two - $12,000 of revenue, $10,200 of direct costs to produce it, $1,800 of contribution. He counted it conservatively: 15% of the price above direct cost, and nothing for the overhead share those jobs would also carry. Two a month by month three, three a month from month four: $400 of verified savings plus $5,400 of contribution is $5,800 against $4,900. Run-rate cleared in the fourth month. The full cost of the hire from day one - the months it ran behind - was paid back in month twelve.
And the hours? The hire freed ten of Mike's estimating hours a week: 43 hours a month, $1,613 at the value Lesson 6 puts on his hour. That number is real and it is not in the break-even. It is capacity. The three added jobs a month are what the capacity turned into, and paying for the hours and the jobs they produced would be counting the same hour twice. Potential value converts to cash exactly once, and Mike can point at where.
04
Price One Real Hire
Write down the actual hire you keep almost making. Assemble the burdened rate, honestly: wage, taxes, comp class, benefits, truck and tools. Then the two-line verdict: monthly true cost, and the specific contribution it must add - or the expense it verifiably eliminates - to clear it. If you can't name either in dollars, the problem isn't the wage. It's that the role doesn't exist yet.
05
Check Yourself
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06
Enter Your Number
The burdened hourly cost of the hire you keep almost making. Lesson 9 takes the freed hours and asks what has to be written down before anyone else can do them.
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07
Put This Lesson to Work
Run the burden math against your real numbers at the Meridian Shift tools hub. The true cost of a person should never be a guess again.
08
Next
Lesson 9: you have help or you're close. Now the real bottleneck shows itself. A hire doing your decisions still needs you, because the decisions live in your head.