Blended Labor Rate Calculator
To calculate the blended labor rate, divide the total hourly rates by the total hours worked. This provides an average labor rate that takes into account various pay rates for different workers or tasks.
The Blended Labor Rate Calculator helps businesses calculate the average hourly wage across multiple employees or labor categories, especially when workers are paid at different rates. This is useful in industries where labor costs vary depending on the task, experience level, or position.
The blended labor rate provides a simplified view of overall labor costs and is commonly used for budgeting, cost estimating, and project management. By using this rate, businesses can more accurately predict labor costs for projects or contracts.
Formula:
| Variable | Description |
|---|---|
| BLR | Blended Labor Rate (in $/hour) |
| THR | Total Hourly Rates (sum of hourly rates for all workers or tasks) |
| THW | Total Hours Worked (combined hours worked by all workers) |
Solved Calculation:
Example 1:
| Step | Calculation |
|---|---|
| Total Hourly Rates (THR) | $240 (3 workers at $80/hr each) |
| Total Hours Worked (THW) | 6 hours (2 hours per worker) |
| Blended Labor Rate Calculation | |
| Result | $40 per hour |
Answer: The blended labor rate is $40 per hour.
Example 2:
| Step | Calculation |
|---|---|
| Total Hourly Rates (THR) | $500 (workers with varying rates) |
| Total Hours Worked (THW) | 10 hours (combined hours) |
| Blended Labor Rate Calculation | |
| Result | $50 per hour |
Answer: The blended labor rate is $50 per hour.
What is Blended Labor Rate Calculator?
A Blended Labor Rate Calculator helps calculate a single hourly rate when multiple employees with different pay rates contribute to a project or task. This method averages out varying labor costs, allowing businesses to estimate labor expenses more accurately.
To calculate the blended labor rate, you can use the following formula:
Blended Rate = (Total Wages of All Employees) / (Total Hours Worked by All Employees)
For example, if three employees earn $20, $30, and $40 per hour and work 10, 15, and 20 hours, respectively, you can calculate the blended rate by first multiplying their hours by their rates to get total wages, then dividing by the total hours.
Tools like the blended labor rate calculator in Excel or blended hourly rate calculator simplify this process by automating the calculations. Blended rates are often used in project management to provide a clear, averaged labor cost for budgeting purposes.
It’s also important for calculating blended rates for overtime, where different overtime rates need to be factored in based on each employee’s base pay.
Final Words:
Blended rates are also helpful when calculating the overall cost per thousand (CPM) or in understanding project management costs when teams with different wage rates are involved.
