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The estimated labor cost for a job is determined by multiplying the total adjusted labor man-hours by the labor rate per man-hour.

Labor Cost Example: The total adjusted estimated labor is 109.77 hours and the labor rate per man-hour is $18.00.
Estimated labor cost = Total adjusted estimated labor hours x labor rate per man-hour
Estimated labor cost = 109.77 hours x $18.00
Estimated labor cost = $1,975.86

Labor Rate per Man-Hour
The labor rate per man-hour can be determined by one of two methods: the shop average, or the job average.

Author's Comment: The labor rate per man-hour is significantly different in different parts of the country. In some areas, a journeyman electrician is paid less than $20 per hour, and in other areas, the rate is over $50 per hour.

Shop Average Labor Rate
The shop average labor rate per man-hour is determined by dividing the total field labor cost over a given period of time by the total number of field man-hours over the same period of time.

Author's Comment: When using the shop average labor rate per man-hour, it might be too low for jobs that require greater skill (such as control wiring), or too high for simple jobs that require less skill (such as residential wiring).

Job Average Labor Rate
Another approach in determining the labor rate per man-hour is to use the anticipated job average labor rate per man-hour. This method requires you to consider how you plan on manning the job; meaning who will be there and what the skill level and wage rate are relative to each other. Review the following example:

Author's Comment: For prevailing wage jobs, be sure to use the rate required in the specifications.

The above content is extracted from Mike Holt's Electrical Estimating Program.