Contractor Burden Rate: What Is Inside a KORE1 Bill Rate
A line-by-line look at the 24% behind every bill rate, with a $100 to $124 worked example.
Burden fixed at 24% in every example. Jump to the worked example.
What is a contractor burden rate?
A contractor burden rate is the percentage of a contractor’s wages that an employer adds for payroll taxes, workers’ comp, required insurance and paid leave, and KORE1 models it at 24% in every bill rate. It is the cost of employing the person, before any margin.
Last updated: October 19, 2026
Here is the short version. A contractor’s bill rate covers wages, plus the 24% burden, plus the staffing firm’s recruiting, benefits and margin, and Devin Hornick’s example puts $100 an hour in pay at $124 loaded, which typically bills around $150 to $160 an hour. Three layers, nothing hidden.
Most buyers meet this number late. A finance lead sees a bill rate, a procurement lead asks why it is not closer to the wage, and nobody at the table can say what sits in between. This page opens that gap.
- This page
- What the 24% employer burden is made of, how $100 of pay becomes a bill rate, and what to ask before you approve a contract req.
- Somewhere else
- Budgeting by agency type is in the IT staffing agency pricing guide. Market rates by city are in IT contractor rates by metro. The day-to-day mechanics are in how contract staffing works.
KORE1 has run a contract staffing desk inside its IT staffing services practice since 2005. Burden is the part of a W2 bill rate that buyers most often skip past, and it is the part we would rather show you than hide.
Line by Line, What Is Inside the 24% Contractor Burden Rate?
Seven costs sit between a contractor’s wage and the cost of employing them. Four are set by law, two are bought from insurers and one is a California rule. KORE1 uses one flat 24% as its working figure rather than recalculating each line for each person. Here they are.
| Cost | 2026 rate or rule | Applies to | Source |
|---|---|---|---|
| Social Security, employer share | 6.2% | Wages up to $184,500 | IRS Publication 15 |
| Medicare, employer share | 1.45% | All wages, no cap | IRS Publication 15 |
| Federal unemployment (FUTA) | 0.6% net | First $7,000 per worker | IRS Topic 759 |
| State unemployment insurance | 3.4% for a new California employer | First $7,000 per worker | California EDD |
| Workers’ compensation | Set by job class and claims history | Payroll | Insurance carrier |
| General and professional liability | Carrier premium | Each placement | Insurance carrier |
| California paid sick leave | Five days or 40 hours each year, at minimum | Each California W2 worker | California DIR |
Add the first two lines and you get 7.65% before anything else is counted. That is the part everyone knows.
The rest is where bills drift. Federal unemployment is a small number once the 5.4% state credit is applied, but it stops being small when a state falls behind on its federal loan. State unemployment, workers’ comp and liability premiums all depend on the state, the job and the claims history, so a desk-based IT role and a warehouse role are not priced alike. Small numbers add up.
No two payrolls land on the same figure, which is why we hold 24% steady across every example on this page and across the 22-metro rate index, so that you can compare one city with another without a second set of assumptions.
Worked Example of a Contractor Burden Rate: $100 in Pay, $124 Loaded
Pull a core sample from one contractor hour and the layers show up in order. Depth here is dollars per hour. The thickness of each layer is its dollar value, drawn to scale.
- Contractor pay
- $0 to $100
- The wage the contractor earns. In this example, $100 an hour.
- Employer burden, 24%
- $100 to $124
- Payroll taxes, workers’ comp, liability insurance and required paid leave. $2.40 on every $10 of pay.
- Recruiting, benefits and margin
- $124 to $150-$160
- The staffing firm’s own layer. It starts after the loaded cost, which is why a bill rate is not a markup on pay.
Typical bill for this example lands around $150 to $160 an hour. The hatched band at the base of the core marks that range. Read it top to bottom.
“$100 an hour. There’s a burden of 24% generally in California… now with the burden you have $124, and so we make our profit after the $124… a bill rate on something like that would likely be around $150… maybe even $160.”
Devin Hornick, Partner, KORE1
Pricing a specific req?
Share the role, seniority, city, start date and term. We’ll come back with a bill rate range and what sits inside it.
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Why a Quoted Markup Can Mislead on Burden
A markup is a ratio, and a ratio needs a base. Pay is one base. Pay plus burden is another. The same headline number buys very different things depending on which one the firm means.
Devin has seen quotes where burden is left out of the markup and added afterward as its own line, so the buyer approves what looks like a modest figure and then meets the rest on the invoice. He tells clients to ask what the number covers before comparing it to anything. Ask first.
“First off, it’s not a markup. Secondly, there’s a margin in there. And thirdly, there’s a bunch of other costs that you’re not thinking of.”
Devin Hornick, Partner, KORE1
Pick a firm that will show you where its money comes from and hide nothing. That is the test. It applies to us too. Other ways to price the same seat are laid out in staff augmentation pricing models.
24%
employer burden used in every KORE1 bill rate example
$124
loaded hourly cost of a contractor paid $100 an hour
5 days
minimum paid sick leave for a California W2 worker, 40 hours
100%
of contractor dental and vision premiums paid by KORE1
KORE1 Contract Rate Index 2026-Q4, effective 2026-10-16. Payroll tax rates from IRS Publication 15 (2026). Sick leave from the California Department of Industrial Relations.
What KORE1 Carries Beyond the Legal Minimum
Law sets a floor. The 24% mostly covers it. Some of what a contractor gets from us sits above that floor, and a share of the bill rate pays for it.
Dental and vision
KORE1 pays 100% of contractor dental and vision. Nobody requires it. It shapes who stays on your project through a long assignment.
Friday pay
Pay goes out on Fridays. Every week.
Insurance we carry
The workers’ comp and liability coverage KORE1 carries sits inside the rate, so it never appears as a surprise line on your invoice.
“The things that we carry that we don’t need to, like paying 100% of their dental, 100% of their vision… we’re taking really good care of the people that are working for you.”
Devin Hornick, Partner, KORE1
The difference between a W2 contractor and the other models is explained in W2 vs C2C vs 1099, including which of these costs you take on yourself under each.
What a Bill Rate Covers and What It Does Not
The left column rides in the hourly number. The right column is a cost you should still plan for or confirm in writing. Plan for both.
| Inside the bill rate | Not inside the bill rate |
|---|---|
| The contractor’s wages | Your own management and onboarding time |
| Employer payroll taxes | Tools, licenses and equipment you supply |
| Workers’ compensation | Overtime hours, which cost more than the base rate where law requires a premium |
| General and professional liability insurance | Travel or expenses, unless your agreement says they are included |
| Required paid sick leave | Project scope changes after the start date |
| Contractor dental and vision, paid by KORE1 | Costs of other vendors on the same project |
| Weekly payroll, recruiting and account management | Any other agreement between you and the contractor |
Read the right column as a checklist, not a warning. Every item is normal. The risk is only in finding them after you approved the number.
California Adds Three Lines to the Burden Rate
A req in California carries more cost than the same req in most states, and the 24% reflects that. Three rules do most of the work.
Paid sick leave
Since January 1, 2024, SB 616 has required every California employer to grant five days, or 40 hours, of paid sick leave each year. For one contractor that is a real cost, and the cost lands in the rate.
Daily overtime
California counts overtime by the day. Pay is one and a half times the regular rate after eight hours and double after twelve, so a long Tuesday costs more than a long week spread out.
Unemployment tax
A new employer starts at 3.4% plus a 0.1% training tax on the first $7,000 of each worker’s wages, per the California EDD. California may also face a federal credit reduction for 2026, which the Department of Labor finalizes after November 10, 2026.
We will recheck that last line after the final list comes out. For Orange County specifically, the rates are broken out in the Orange County role-by-role rates, and Los Angeles has its own page of Los Angeles contractor rates.
Questions to Ask Any Staffing Firm About Its Bill Rate
Four questions. Five minutes. They settle most of the confusion, so ask them of every firm, ours included.
Coverage
Is burden in the number?
Ask for one all-in hourly rate, not a markup with payroll costs added later.
Insurance
Which policies are inside?
Workers’ comp, liability and sick leave should be named, not implied.
Benefits
Who pays for coverage?
Ask what the firm pays toward health coverage and what the contractor pays.
Changes
What moves the rate?
Ask how overtime, a new tax rate or a longer term would change the invoice.
What a Real Contract Req Costs With the Burden Inside
The 24% is already inside every figure below. Bill rates are what an employer pays the staffing firm each hour for a W2 contractor. Each 3-month figure assumes a 40-hour week for 13 weeks at the median.
| Role and market | Source | Range | Median | 3 months | 6 months |
|---|---|---|---|---|---|
| Help desk technician, Level 2, United States | Modeled | $44-$56 | $49 | $25,400 | $50,700 |
| Software engineer, mid-level, United States | Modeled | $96-$122 | $108 | $56,100 | $112,200 |
| Help desk, all levels, KORE1 placements (n=39, primarily Southern California) | KORE1 observed | $41-$55 | $49 | $25,500 | $51,000 |
| Software engineer, all levels, KORE1 placements (n=16, primarily Southern California) | KORE1 observed | $91-$120 | $105 | $54,600 | $109,200 |
Take the first row. A national Level 2 help desk contractor bills $44 to $56 an hour, with a $49 median. A three-month engagement at that median is about $25,400.
Our own placements agree. Thirty-nine help desk placements, mostly in Southern California, billed a median $49 as well, and cell by cell the full index is on IT contractor rates by city while the skill-level view is in tech contractor hourly rates for 2026. How the cells are built is on how KORE1 models bill rates.
Engineers, accountants, analysts and support seats each have their own page, including contract engineer bill rates, contract accountant bill rates, business analyst contract bill rates and help desk cost per month.
Converting a contractor later changes the math, and the comparison with a direct hire fee is walked through in contract-to-hire vs direct hire cost, which also shows when a three-month contract turns into a permanent seat.
Common Questions
What is a burden rate on a contractor?
A burden rate is the percentage an employer adds to a worker’s wages to cover payroll taxes, workers’ comp, insurance and required paid leave. KORE1 models it at 24%, so a $100 an hour wage costs $124 an hour to employ.
What is included in the 24% burden?
Employer Social Security at 6.2% and Medicare at 1.45%, federal and state unemployment tax, workers’ compensation, liability insurance and required paid sick leave together make up the 24% KORE1 applies to wages before recruiting, benefits and margin.
How do I get from a pay rate to a bill rate?
Multiply pay by 1.24 to load the burden, then expect the firm’s own layer on top. At $100 an hour in pay, that is $124 loaded and a typical bill of $150 to $160. Never a simple markup.
Does an agency’s hourly rate already include markup and burden?
It should include both, because margin and burden are part of what you pay each hour. The catch is how a quote is built. Some firms quote a markup on pay and add burden afterward, so ask whether the number you were given is all-in.
How much does a Level 2 help desk contractor cost per hour?
As of October 16, 2026, a Level 2 help desk technician on a W2 contract in the United States typically bills $44 to $56 per hour through a staffing firm, with a $49 median. A 3-month, 40-hour-a-week contract at the median runs about $25,400.
Does KORE1 pay for contractor benefits?
KORE1 pays 100% of contractor dental and vision premiums, and pays contractors weekly on Fridays. Those costs are carried inside the bill rate, not billed as extras, so the hourly number you approve is the number on the invoice. Nothing extra.
Get a Bill Rate Quote
Share the role, seniority, city, start date and term. We’ll send back a bill rate range with the burden, the insurance and the benefits spelled out line by line.
Get a Bill Rate Quote →