Warehouse Labor Cost Calculator
Calculate the true cost of your picking labour: cost per order line, cost per order, daily cost and annual cost, using a fully loaded hourly rate that includes employer burden and indirect labour. Use it for budgeting, 3PL rate comparisons and building the business case for automation or process change.
Workload and productivity
Cost assumptions
Social charges, holiday pay, insurance, pension.
Supervision, admin, training, agency premium.
Cost per order line
0.19
23.00 fully loaded per productive hour
Labour hours per day
166.7h
Operators required
23
Cost per day
3,833
Cost per year
958,333
Cost per order
1.53
Fully loaded hourly rate
23.00
How the Warehouse Labor Cost Calculator Works
The model converts workload into hours, then hours into money. Order lines divided by the pick rate gives labour hours per day. The fully loaded hourly rate is the direct wage increased by employer burden and then by an indirect labour uplift. Multiplying hours by that rate gives daily cost, and daily cost divided by lines and orders gives the unit costs.
The formulas
- Fully loaded rate = wage × (1 + burden %) × (1 + indirect %)
- Labour hours per day = order lines ÷ pick rate
- Cost per day = labour hours × fully loaded rate
- Cost per line = fully loaded rate ÷ pick rate
Worked example
At a 16.00 hourly wage with 25% burden and a 15% indirect uplift, the fully loaded rate is 16 × 1.25 × 1.15 = 23.00 per productive hour. 20,000 lines a day at 120 lines per hour needs 166.7 labour hours, which costs 3,833 per day, about 0.19 per line and 1.53 per order at 2,500 orders. Over 250 operating days that is roughly 958,000 a year.
Using it for a business case
Because cost per line is simply the loaded rate divided by the pick rate, a productivity improvement translates directly into savings. Raising the rate from 120 to 140 lines per hour in the example above saves around 137,000 a year — the figure to compare against the cost of the slotting project, equipment or system that delivers it.
This model covers picking labour only. Receiving, replenishment, packing, dispatch, equipment, rent and systems must be added for a full operating cost.
Related Pages
- Pick Rate Calculator — measure the productivity this model depends on
- Throughput Calculator
- Warehouse Picking Productivity
- Storage Capacity Calculator
Frequently Asked Questions
- How do you calculate warehouse labour cost per order line?
- Divide the fully loaded hourly rate by the pick rate. At a fully loaded rate of 23.00 per hour and 120 lines per hour, each line costs about 0.19. Multiplying by daily lines gives the daily cost and multiplying by operating days gives the annual cost.
- What is a fully loaded labour rate?
- The direct wage plus employer burden — social charges, holiday pay, sick pay, insurance and pension — plus an uplift for indirect labour such as supervision, administration and training. Burden commonly adds 20–35% and indirect labour a further 10–20%.
- Should I use paid hours or productive hours?
- Use productive hours for the rate and cost per line, since only those hours produce picks. Paid hours are already reflected in the burden and indirect percentages, so counting them twice inflates the cost.
- How many operating days should I assume?
- A five-day operation is typically 250–255 days a year, a six-day operation around 300, and a seven-day operation 355–365. Use the days your site actually picks, not calendar days.
- How can I reduce cost per line?
- Cost per line falls only when the fully loaded rate falls or the pick rate rises. In practice the productivity side gives more: better slotting, batch or zone picking, shorter travel, fewer touches and cleaner order profiles all raise lines per hour without changing the wage.
Related Warehouse Tools
Pick Rate Calculator
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Throughput Calculator
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Storage Capacity Calculator
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Pallet Position Calculator
Convert SKU counts and inventory levels into the pallet positions your warehouse actually needs.