📆 Today’s Rundown
Hey 👋, hope you had a great week! I bet you missed me, but I was off with my kids for a long overdue vacation.
In the last issue, we discussed why tracking Accrued Payroll matters, and now we are moving with the next topic from Headcount content.
Let’s talk about ⬇️
Fully Burdened Labor Rate
Most founders think pricing their services is as simple as:
“What do I pay this person per hour? Cool, I’ll charge 2x that.”
But after helping 50+ companies fix their pricing and margins, I can tell you this:
Nothing will tank your profitability faster than ignoring your fully burdened labor rate.
In reality, you need to factor in these 5 components to get pricing right:
- Salary & bonuses
- Taxes & benefits
- Tools, training & equipment
- Admin overhead
- Work hours & utilization
Let’s break it down!
TL;DR
1️⃣ Know your true cost per person
2️⃣ Use the right formula (not a guess)
3️⃣ Benchmark (but with context)
4️⃣ Remote ≠ free
5️⃣ Optimize like a CFO
1️⃣ Know your true cost per person
Forget just salaries.
The fully burdened labor rate includes salary, taxes, benefits, equipment, paid time off, training costs, and more.
A $90K developer might actually cost you $120K or more once you add everything up.
If you're billing clients hourly or setting flat rates, this number matters a lot.
2️⃣ Use the right formula (not a guess)
Here’s the basic structure:
Salary + Benefits + Payroll Taxes + Tools + Training + Admin Costs
/
2,080 hours (standard FTE year)
= Your true hourly cost
Most companies charge blindly. You won’t.
Need clarity on your financial strategy or cash flow optimization?
I'm Aleksandar, fractional CFO at Fiscallion, where we help founders like you achieve financial clarity, streamline reporting, and build investor-ready forecasts.
Ready to level up your finances?
Book a free strategy call with me today3️⃣ Benchmark (but with context)
Most fully burdened rates are 25–40% higher than base salary.
But that’s just a starting point.
💡 A seasoned consultant? Higher.
💡 A remote team? Different overhead.
💡 Your city? Totally skews things.
Know your industry, your people, your margins.
4️⃣ Remote ≠ free
Sure, you're not paying for office rent. But you're now funding:
- Home office stipends
- Security & collaboration tools
- Async workflows & onboarding
- Mental health & retention perks
Remote reduces some costs — but adds others. Track both.
5️⃣ Optimize like a CFO
To drive profitability, you can:
- Automate admin tasks
- Increase employee utilization
- Streamline internal workflows
- Trim unused software or tools
- Focus on retention to lower hiring churn
Every 1% matters here.
If you take this seriously, you’ll…
→ Price with confidence
→ Forecast with clarity
→ Keep your margins healthy
And if you're not sure where to start… feel free to hit reply.
Let’s build better margins together.
Talk soon,
