HEALTH BENEFITS: WHAT THEY COST PER EMPLOYEE AND WHERE IT GOES IN THE BURDEN.
Two national averages give an owner something to compare against. The Bureau of Labor Statistics, in its Employer Costs for Employee Compensation for June 2026, reports that benefits of all kinds are 30.0 percent of total pay costs in private industry. That is $14.07 an hour on top of $32.82 in wages, or about 43 percent on wages. For health coverage alone, the KFF Employer Health Benefits Survey for 2025 reports an average premium of $9,325 for single coverage and $26,993 for family coverage, and workers pay $1,440 and $6,850 of those. The employer share works out to about $7,885 and $20,143 a year. On a $28 an hour employee that is $3.79 an hour for single coverage and $9.68 an hour for family, before the hours nobody bills are counted.
Health coverage is the one big burden item that does not move with payroll. It is a flat dollar amount per covered person, so the same plan is a bigger percent of a $22 wage than of a $40 wage. This page shows what the averages say, how they compare to a bid burden, and how to put the plan's actual invoice into the rate.
WHAT IT MEANS.
The employer health benefit cost per employee is the part of the health, dental and vision premium the contractor pays for each covered worker, which becomes one line of the labor burden rate once it is turned into a dollar cost per productive hour.
Everything on this page that comes from a survey is an average across many employers and industries, with the publisher and year stated in the text. A contractor's own invoice is the number that goes in a bid. Plan rules, tax rules and state law differ, so the plan advisor and a tax professional answer questions about who can be covered, what is deductible and what a plan must offer. SPM works with the cost side: what the plan costs per hour and which line of the rate it belongs to.
HOW THE COST REACHES THE RATE.
The cost is a flat dollar amount per employee
Payroll tax and workers comp are set as a percent of wages, so they grow with the wage. A health premium is set per person by age, plan and coverage tier. A $22 laborer and a $40 foreman on the same single plan cost the same $7,885 a year in the example below, which is 17.2 percent of the laborer's wage and less than 10 percent of the foreman's. A company-wide percent for benefits spreads it evenly, and it makes the lower paid crews look cheaper than they are.
The employer pays less than the premium
The KFF Employer Health Benefits Survey for 2025 reports that covered workers paid on average $1,440 toward single coverage, 16 percent of the premium, and $6,850 toward family coverage, 26 percent. The burden uses the employer share, the part that leaves the company's bank account, and not the full premium on the carrier's bill. Using the bill overstates the burden by whatever the worker pays.
The cost follows the enrolled, not the headcount
The plan invoice lists who is covered. An employee who declines coverage costs the company nothing on the plan, and an employee who covers a family costs several times what a single employee does. A burden that spreads the invoice evenly over every field employee overstates one crew and understates the other. SPM builds the rate by crew from the invoice and the enrollment list.
A monthly bill has to become a cost per productive hour
The invoice is monthly and the estimate prices labor by the hour. The conversion is the annual employer share divided by the hours the employee is paid for, 2,080 for a full-time year, and then spread over the hours billed to jobs, the same productive hour step used for the rest of the burden. Skipping it leaves the health cost in overhead, where it is not in the bid and not in the job cost.
Field cost and office cost are separate lines
Coverage for the crews that build the work belongs in the labor burden and in job cost. Coverage for the estimator, the project managers, the office staff and the owner belongs in overhead, recovered through the overhead rate. Putting office coverage in the field burden raises every labor bid, and leaving field coverage in overhead understates every job.
The renewal changes the rate in the middle of the backlog
The plan renews once a year and the new rate applies to the whole company at once. Work bid at last year's cost, with months still to build, now has a higher health cost than the estimate has in it. The renewal page covers what to ask for and when. Here the point is that the burden rate is recalculated on the renewal date and the open bids are repriced.
Why a national average is not the bid number
BLS measures cost per hour worked across every employee in its sample, covered or not, in every private industry. KFF reports per covered worker, in firms with ten or more workers. A contractor with half of its field crew enrolled has a plan cost per enrolled worker above the BLS average and a cost per employee below it. Neither average knows the contractor's enrollment, carrier, state, ages or crew mix. They are good for a sanity check on a rate and not for pricing.
WHAT IT LOOKS LIKE IN DOLLARS.
The KFF Employer Health Benefits Survey for 2025 covers private and non-federal public employers with ten or more workers. The average annual premium was $9,325 for single coverage and $26,993 for family coverage. Workers paid $1,440 and $6,850. Subtracting gives an employer share of about $7,885 for single coverage, 84 percent of the premium, and about $20,143 for family coverage, 74 percent. That subtraction is SPM's calculation and not a published KFF figure. KFF also reports that workers at firms with 10 to 199 workers paid an average of $8,889 toward family coverage, against $6,227 at larger firms, so a smaller contractor may pay a lower share than the all-firm average.
Take a $28 an hour employee paid for 2,080 hours, who is billed to jobs for 1,800 of them. These are round inputs, and the employer share is the KFF average above. Single coverage: $7,885 divided by 2,080 paid hours is $3.79 an hour, which is 13.5 percent of the wage. Divided by 1,800 productive hours it is $4.38 on every hour a customer pays for. Family coverage: $20,143 divided by 2,080 is $9.68 an hour, 34.6 percent of the wage, and $11.19 per productive hour. The labor burden page assumes $3.00 an hour for health insurance and reaches $43.15 per productive hour. Replace $3.00 with $3.79 and the rate becomes about $44.06, because the extra $0.79 is divided by 0.865 like the rest of the stack.
In its Employer Costs for Employee Compensation for June 2026, BLS reports that private industry employers paid $46.89 an hour worked in total: $32.82 in wages and salaries, which is 70.0 percent, and $14.07 in benefits, which is 30.0 percent. Benefits are 30 percent of the total, and divided by the wage they are 42.9 percent, so the owner who reads 30 percent and compares it to a burden stated on wages is comparing two different bases. Inside the $14.07, BLS shows insurance benefits of $3.69 an hour, which covers health, life and disability and is 7.9 percent of total pay costs, and legally required benefits of $3.40 an hour, 7.2 percent, which include Social Security, Medicare, unemployment tax and workers compensation. On wages, those are about 11.2 percent and 10.4 percent. Those two divisions are SPM's calculations.
WHAT WE CHANGE.
SPM asks for the plan invoice and the enrollment list and takes out the amount employees pay through payroll. What is left is the employer cost by person and by coverage tier. It is divided by paid hours and then by productive hours, and the result goes into the burden for that crew as a dollar amount an hour, not as a percent.
SPM separates the people who build the work from the people who staff the office, so each cost goes where the bid recovers it. The overhead rate picks up the office coverage. The labor burden picks up the field coverage.
Once the rate is built, SPM lines it up against the BLS and KFF figures on this page. If the contractor's benefits cost is far above or below the averages, the question is why: enrollment, coverage tier, plan design or a mistake in the books. The bid still uses the contractor's own number.
The renewal letter goes to SPM the week it is received. The burden rate is updated, the open bids that use labor at the old cost are listed, and the backlog is repriced so the owner sees what the renewal does to the margin on jobs already won.
FLAT MONTHLY FEE. NO SURPRISES.
Three tiers, priced by your trailing twelve month revenue. Which one you're in depends on how much of the work you want off your desk. No hourly billing. No payroll. The one-time onboarding fee is right here in the table.
| Last 12 months revenue | Monthly fee | One-time onboarding |
|---|---|---|
| Up to $1M | $1,900 to $2,900 | $1,000 |
| $1M to $3.5M | $2,600 to $3,900 | $1,500 |
| $3.5M to $6.5M | $3,800 to $5,700 | $3,000 |
| $6.5M to $9.5M | $5,100 to $7,100 | $4,500 |
| $9.5M to $12.5M | $6,100 to $8,500 | $6,000 |
| $12.5M to $15.5M | $7,400 to $11,000 | $7,500 |
| $15.5M to $18.5M | $9,400 to $13,500 | $9,000 |
| $18.5M+ | Quoted individually | Quoted individually |
The onboarding fee covers migrating your books back to the start of your last taxable year and getting you fully operational in 60 days. It's billed once, with your first invoice. It's the same for all three tiers. Your first month is prorated, and your monthly engagement starts on the first of the first full month.
Range reflects the three tiers below. Which one you're in depends on how much of the work you want off your desk. No payroll. No hidden line items. The onboarding fee is right here in the table.
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