Is the 42% overhead rate realistic for every company?

No, it's an indicative example. The real rate depends on the applicable collective agreement, region, accident history, sickness and company arrangements. Ask your accountant or payroll consultant for an up-to-date coefficient.

Can I use the same hourly cost for every worker?

It's better to differentiate by contract level and seniority. For a first estimate you can use a weighted average, but accuracy pays off in management reporting.

Does archim use this hourly cost?

Yes. In archim you set an hourly cost per worker and the system multiplies it by the hours recorded on site reports, assigning the cost to the correct project.

Hourly labour cost for construction workers: practical calculation guide

§ 01 / Guides

How to calculate the real hourly cost of a construction worker

A step-by-step example for moving from gross annual salary to the real productive hourly cost, including contributions, holidays, bonus months and overheads.

7 min readUpdated 31 August 2026Reviewed by Matthieu Crétier

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In short: How to calculate the real hourly cost of a construction worker

A step-by-step example for moving from gross annual salary to the real productive hourly cost, including contributions, holidays, bonus months and overheads.

What this guide covers

•1. Start from the annual gross salary
•2. Add contributions and overheads
•3. Calculate contractual and productive hours

Many construction companies estimate margins using the contractual hourly rate of a worker. The risk is underestimating the real cost, because that figure doesn't include employer contributions, holidays, sick leave and other overheads. In this guide we show how to move from gross salary to productive hourly cost with a concrete numeric example.

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1. Start from the annual gross salary

Let's assume a construction worker with a gross annual salary of €28,000. This is the base for all following calculations. The gross salary includes monthly pay and any thirteenth/fourteenth month payments, but not employer social charges.

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2. Add contributions and overheads

Employer social contributions in the construction sector are typically around 35–40% of gross salary. Add workers' compensation insurance, which is significant in construction. For this example, we use an overall overhead rate of 42%, equal to €11,760. The loaded salary becomes €39,760.

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3. Calculate contractual and productive hours

A working year has roughly 2,080 contractual hours (52 weeks × 40 hours). But the worker doesn't produce in all those hours: holidays, leave, sickness, public holidays and training reduce the total. Productive hours are typically 75–80% of contractual hours, around 1,600 per year.

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4. Get the real hourly cost

Divide the loaded salary (€39,760) by productive hours (1,600). The result is about €24.85 per hour. This is the true cost the company bears for every productive hour, well above the simple hourly wage.

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5. Use it in estimates and margins

When estimating a job or a site margin, multiply estimated hours by the real hourly cost, not the contractual rate. If you enter €24.85/h in archim, every hour logged on a site report is automatically turned into a project cost.

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What to do next

Calculating the real hourly cost isn't just accounting: it's the number that determines whether a site is profitable. Use our free tool to rerun the calculation with your own figures.

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FAQ

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