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Staffing Productive-Hour Cost Table

Compare productive-hour costs for a hypothetical $78,000 annual employer budget at different delivered capacities, without built-in payroll rates.

By PriceAndProfit Editorial Updated

The annual budget is an illustrative sum of cash pay, employer charges, benefits and other operating costs. It contains no published statutory percentage. The denominator measures productive delivery capacity after the absences and support work included in your planning definition. Paid hours and productive hours answer different questions.

Cost per productive hour = $78,000 annual employer budget ÷ productive hours
Hypothetical worked values; no market or statutory rates
Annual employer budgetProductive hoursCost per productive hour
$78,000 1,800 $43.33
$78,000 1,600 $48.75
$78,000 1,500 $52.00
$78,000 1,200 $65.00
$78,000 1,000 $78.00
$78,000 0 Undefined; annual cost still exists

How to read and reuse this example

Build the annual budget from your records, then document the calendar behind productive capacity. If pay already covers vacation, do not add the same wages again as an extra cash benefit. Instead, reduce productive hours for the absence where appropriate. Keep training and supervision costs visible, particularly during an onboarding period when output may be lower.

Boundaries and exceptions

This table is a budgeting comparison, not a wage calculation or a legal test for employee status. A low workload can make used-hour cost exceed capacity-hour cost because the full annual budget remains. At zero productive hours the cost is real but the quotient is undefined. Ask a qualified payroll provider for applicable obligations; this page supplies none.

Method reference: BLS: Employer Compensation Concepts. Checked October 22, 2026. Compensation components only. No average wage, benefit share or mandatory payroll rate is used.

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