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Labour Variance Calculator

Work out labour variance instantly with clear inputs, formula shown and shareable results.

About Labour Variance Calculator

Labour variance splits into a rate variance, owned by whoever sets pay and staffing mix, and an efficiency variance, owned by production. The rate difference is applied to actual hours and the hours difference to the standard rate, keeping the two effects separate.

Formulas

Rate variance

LRV = (Standard rate - Actual rate) x Actual hours

Efficiency variance

LEV = (Standard hours - Actual hours) x Standard rate

Worked example

With the default values below, Labour Variance Calculator returns Total labour variance of -$6,190.00. Change any input above and every figure here is recalculated in your browser.

Inputs used

Standard labour rate per hour
28
Actual labour rate per hour
30.5
Standard hours for actual output
1,500
Actual hours worked
1,580

Results

Total labour variance
-$6,190.00
Labour rate variance
-$3,950.00
Labour efficiency variance
-$2,240.00
Excess hours worked
80.0

Step by step

  1. 1Values used
  2. 2Rate variance
  3. 3Efficiency variance
  4. 4Total labour variance= -6,190.00
  5. 5Labour rate variance= -3,950.00
  6. 6Labour efficiency variance= -2,240.00
  7. 7Excess hours worked= 80.0

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, fees or charges or compounding frequency into account.
  • Figures are rounded for display to 2 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 drives an adverse rate variance?

Overtime premia, agency cover, or using higher-graded staff than the standard assumed.

Can efficiency be adverse for good reasons?

Yes — training new starters, running a first article, or working with substandard material all consume hours the standard does not allow.

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Labour Variance Calculator – Calculate Total labour variance