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Labour Cost Per Unit Calculator

Work out labour cost per unit instantly with clear inputs, formula shown and shareable results.

About Labour Cost Per Unit Calculator

Direct labour cost per unit is loaded hours divided by units. Isolating the idle-time share shows how much of the unit cost is paid for time that produced nothing — usually the fastest cost reduction available on a labour-intensive line.

Formulas

Labour cost per unit

Cost per unit = (Direct hours x Loaded rate) / Units produced

Idle cost

Idle cost = Total labour cost x Idle time %

Worked example

With the default values below, Labour Cost Per Unit Calculator returns Direct labour cost per unit of $12.1905. Change any input above and every figure here is recalculated in your browser.

Inputs used

Direct labour hours
1,600
Loaded hourly rate
32
Units produced
4,200
Idle and non-productive time
8

Results

Direct labour cost per unit
$12.1905
Total direct labour cost
$51,200.00
Productive hours
1,472.0
Cost of idle time
$4,096.00

Step by step

  1. 1Values used
  2. 2Labour cost per unit
  3. 3Idle cost
  4. 4Direct labour cost per unit= 12.1905
  5. 5Total direct labour cost= 51,200.00
  6. 6Productive hours= 1,472.0
  7. 7Cost of idle time= 4,096.00

Assumptions and limits

  • The result is derived only from the 4 inputs listed above. Anything not among them is not part of the calculation.
  • In particular, this calculator does not take inflation, tax or compounding frequency into account.
  • Figures are rounded for display to 4 decimal places, so totals built from several rounded parts can differ slightly from the unrounded arithmetic.
  • This is an estimate for general information and not professional financial, tax or legal advice. See the full disclaimer for the limits that apply to this kind of calculator.

How these calculators are built and tested is described on the Methodology page. If a figure looks wrong, please report it.

Frequently Asked Questions

What is in a loaded rate?

Base pay plus employer taxes, pension, holiday, insurance and shift premia — typically 25-60% above base pay depending on jurisdiction.

Why separate idle time?

Because it is recoverable capacity. Reducing idle time cuts unit cost without touching wage rates or headcount.

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