BURDEN RATE Meaning and
Definition
-
Burden Rate is a financial term used in business to refer to the indirect costs associated with labor in addition to the direct wages or salaries paid to employees. It is the total cost incurred by a company to employ an individual, including various expenses beyond their base compensation, such as benefits, taxes, and other overhead costs.
The Burden Rate is often expressed as a percentage or a ratio and is calculated by dividing the total indirect costs by the direct labor cost. These indirect costs can include employer taxes, insurance premiums, employee benefits (such as healthcare or retirement plans), workers' compensation, vacation or sick leave, training expenses, and any other expenses related to maintaining an employee workforce.
Understanding the Burden Rate helps businesses accurately assess the true cost of employing a worker and estimate the total budget allocation for labor expenses. It is an essential metric for companies to consider while determining pricing, bidding for projects, or assessing profitability.
The Burden Rate can vary depending on various factors, such as industry, location, and the specific benefits and costs applicable to a particular company. It is critical for organizations to regularly review and update their burden rates to ensure accurate cost allocation and financial planning for human resources.
In summary, the Burden Rate is the proportion of indirect costs associated with labor that businesses must factor in when assessing the total cost of employing individuals.
Common Misspellings for BURDEN RATE
- vurden rate
- nurden rate
- hurden rate
- gurden rate
- byrden rate
- bhrden rate
- bjrden rate
- birden rate
- b8rden rate
- b7rden rate
- bueden rate
- budden rate
- bufden rate
- butden rate
- bu5den rate
- bu4den rate
- bursen rate
- burxen rate
- burcen rate
- burfen rate
Etymology of BURDEN RATE
The word "burden" comes from the Old English word "byrthen", which means "a load or stress". It can be traced back to the Proto-Germanic word "burthinan", meaning "to bear, carry, or bring forth".
The word "rate" comes from the Latin word "ratus", which means "reckoned or estimated". It has evolved from the Middle English word "rate", which referred to a fixed proportion or a charge for services.
Combining these two words, "burden rate" refers to the estimated or calculated charge or cost associated with carrying or bearing a load or stress. It is commonly used in the context of business or finance to refer to the total cost of employee compensation, including wages, benefits, and taxes, which are considered as a burden or overhead for a company.
Infographic
Add the infographic to your website:
