Labour burden is the cost of the payroll taxes and insurances that an employer must pay, over and above wages, in order to employ workers.
The term comes from North American practice, where it typically includes workers’ compensation insurance. In the UK the equivalent costs include employer’s National Insurance contributions, employer’s liability insurance and the Construction Industry Training Board (CITB) levy. These are added to basic wages and benefits when building up an all-in labour rate. For the QS, understanding labour burden helps when:
- checking that a contractor’s all-in rates are realistic;
- valuing daywork, where percentage additions often cover these costs;
- assessing the effect of changes in statutory costs during a long contract.
Related terms: Labour Benefits, All-in Labour Rate, Daywork, On-costs.
