Reply #38: The Rule of 4: take the wage price, multiply times 4. That's your wage cost. [View All]

[patriotvoice]

In business of any scale, you can quickly estimate the actual wage cost by taking the market wage price and multiplying by 4. When I pay a programmer $75 an hour, I bill him at $300 per hour to cover his costs, which includes profit, taxes, office space, connectivity, utilities, health care, retirement, business cards, shirts, and toilet paper. In my experience, I have found that estimate to be spot on.

It is totally reasonable for the wage cost to be $70/hr for an assembly line worker priced at $17.50/hr.