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Labor Cost Calculator: the Working Hours it Takes Anyone to Buy Anything

Whenever you buy anything you pay for it with money. But there’s an underlying reality. You pay not only with money, but more fundamentally with the hours of toil it took you to earn that money in the first place.

The role your labor plays in spending is easy to forget. Any purchase happens in the present, but the work that makes it possible happens at some other time—in the past or, if you’re going into debt, at some point in the future. On top of this, fast and convenient payment systems make it incredibly easy to part with your money. You simply click a mouse, swipe a card, or arrange for auto-pay. What’s laborious about that?

You might spend money differently if you focused more on the time you barter for purchases instead of looking solely at the amounts disbursed. This represents a profound switch in perspective, and for ages it’s formed a key component of the frugal mindset.

In Walden, published in 1854, Henry David Thoreau wrote that the true price paid for anything is the amount of life swapped for it. “The cost of a thing is the amount of what I will call life which is required to be exchanged for it, immediately or in the long run.”

In Your Money or Your Life (YMOYL), published in 1992, Joe Dominguez and Vicki Robin updated Thoreau’s idea for a new age. “Money is something we choose to trade our life energy for. Our life energy is our allotment of time here on earth, the hours of precious life available to us. When we go to our jobs we are trading our life energy for money.”

In the 21st Century, great ideas in books can gain new life as interactive media. With this post, I unleash the Labor Cost Calculator (LCC), an online tool that figures the amount of (a) life hours, (b) life energy, or (c) time in toil that it takes you to buy or pay for anything. Instead of just reading about a general truth (“people swap their lives for stuff”), you can use a calculator that shows precisely how this truth affects your life (“if you buy this motorcycle on your salary, you’ll be trading 1,587 working hours for it”).

In addition to helping you size up specific purchases, the LCC can bring you closer to a mindset that values hours over dollars. That’s a great outlook to have. Indeed, a growing body of behavioral science concludes that people who value time more than money are happier than people who see things the other way around:

“Life frequently presents time versus money trade-offs. [Our research] showed that the way people answer this [hours versus dollars] question predicts their happiness. Although time and money are both valuable resources that give hope for greater happiness, choosing time over money promises a happier life.”

H. Hershfield, C. Mogilner & U. Barnea, People Who Choose Time Over Money Are Happier, http://journals.sagepub.com/doi/abs/10.1177/1948550616649239 (first published 5/25/2016).

To use the LCC, all you need to do is enter six numbers and click a button. The readout may change your mind about making a purchase that gobbles up so much of your lifespan.

Calculator Instructions

Like all other calculators on this website, the LCC is completely confidential. Nothing you enter is recorded or stored.

Line 1: input your annual gross salary before any taxes or withholding for Social Security and Medicare (the calculator figures in the percentage of Social Security/Medicare automatically). Note: the calculator doesn’t accept dollar ($) signs or commas (,), so don’t input them into the LCC.

Line 2: input your top federal marginal tax rate for the year. If you don’t know it already, here’s a link to the federal tax brackets for 2017. Note: the LCC doesn’t accept percentage (%) signs. Also, if you’re in the 39.6% bracket, to get the correct answer input 39.6 and not .396.

Line 3: input your combined top state and local (if any) tax rate for the year. For a list of 2017 state tax brackets, click here.

Line 4: estimate the hours you work each year. Be inclusive. It takes time to fly to distant meetings, appear at company events, and answer weekend emails.

Line 5: input the hours you spend commuting each year. If you want, also include the time you spend getting ready for work in the morning and winding down at night. Many reasonably regard this as part of the time their jobs take from their lives.

Line 6: input the total cost of your expenditure whether it’s a recurring expense (mortgage payment, rent, electric bill) or one-time purchase (car, cell phone, skis). Include any sales taxes.

Labor Cost Calculator

1. Your Annual Gross Salary:
2. Your Top Marginal Federal Tax Rate (if 39.6%, input 39.6):
3. Your Top Marginal State + Local Tax Rate (if 6.93%, input 6.93):
4. Your Total Hours Worked Per Year:
5. Your Total Hours Commuting Per Year:
6. The Total Cost of Your Expenditure (with any sales taxes):

Once you’ve inputted your numbers, click the button below to see the hours of work (a/k/a life energy, a/k/a agonizing toil) it takes to pay for your expenditure:

Total Labor Cost of Your Expenditure:

But Wait, There's More . . .

If you want you can leave here now and think nothing further about how you trade your precious hours on earth for less-than-precious stuff. But before you go, why not take along a lasting memento of your visit?

The chart below uses the data you entered to show how much life you trade away at various levels of spending—from $1 all the way up to $100,000. It's a personalized reminder that everything you buy is paid for with the sweat of your own brow. The chart is printable. Simply click the onscreen button that appears below. Carry a copy in your wallet, tape it to your office wall, or post it on your fridge (this way you'll get a smart appliance on the cheap).

My Labor Cost of Spending Chart
How much life I swap for the things I buy!
Spending Hours Spending Hours
$1 $1,000
$5 $2,000
$10 $3,000
$15 $4,000
$20 $5,000
$25 $6,000
$30 $7,000
$35 $8,000
$40 $9,000
$45 $10,000
$50 $15,000
$100 $20,000
$200 $25,000
$300 $30,000
$400 $35,000
$500 $40,000
$600 $45,000
$700 $50,000
$800 $75,000
$900 $100,000
source: www.frugalfringe.com
© 2017 A. Noonan Moose


In the interest of transparency, I'm adding this uber-nerdish description that details the math behind the Labor Cost Calculator.

Let a = your gross salary.
Let b = a * your top federal marginal rate.
Let c = a * your top combined state and local rate.
Let d = a * .0145 (which is the Medicare rate as of 2017).
Let e = a binary value for the Social Security rate as of 2017, which is .062 for gross earnings between $0 and $127,200 and 0.00 for gross earnings above that.
Let f = a * e, which is the marginal amount you pay for social security at your level of gross income. For gross salaries $127,200 and over the value of f is zero.
Let g = a - (b + c + d + f), which is your gross salary minus all you pay at the highest margins for income taxes and Social Security/Medicare withholding.
Let h = the sum total of your working and commuting hours (and preparing for and winding down from work, if you decided to include those hours).
Let i = g / h, which gives you a post-tax hourly rate for your labors.
Let j = whatever value you entered for the expenditure you're measuring.
Let k = j/i, which gives the number of post-tax labor hours it takes you to pay for your expenditure.

Of course, anyone could do all this math on his or her own after identifying the necessary calculations. I think it's much easier to use a calculator—all you do is enter several variables and, blissfully, the rest is automated.

*  *  *

I coded the LCC in HTML5 and Javascript. Everything I know about these languages I learned for FREE at www.w3schools.com. If you're interested in creating your own calculators, that's a great place to visit; especially if, like me, the last coding you did was on punch cards back in 1979 (the language was something called COBOL and believe it or not it's still around)!

If you're in the mood to crunch even more numbers, head over to the Frugal Fringe calculators page by clicking here.

Photo of cubicle farm by Tim Patterson

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16 Responses to Labor Cost Calculator: the Working Hours it Takes Anyone to Buy Anything

  1. Mrs. Picky Pincher January 23, 2017 at 8:15 AM #

    Ayuuuup. I just started reading Your Money Or Your Life. It puts a lot of things into perspective, but especially the amount of money we spend for the right to have a job. You spend money on clothes for the job, gas, wear and tear on your vehicle, decompressing after work, thinking about work at home, etc. It consumes our lives when it really should just be a footnote.

    Now that we’re living on 50% of our income, I try to view expenses as “life points.” I’m an hourly contractor so I view purchases as, “I work for X hours to buy this–is it worth it?”

    Usually the answer is no. 🙂
    Mrs. Picky Pincher recently posted…What A Frugal Weekend!My Profile

    • A Noonan Moose January 23, 2017 at 9:01 AM #

      You’re getting into a fantastic book!

      I’ve read YMOYL about a dozen times since the mid-1990s and have gifted many copies to friends and family (all were paperbacks bought for cheap at used book sales—no reason to pay retail even though it’s one of the greatest reads ever).

  2. fbgcai January 23, 2017 at 9:04 AM #

    Thanks! I’ll have to tweak for Canadian numbers though 🙂 – still gives a great ball park numbers
    I remember COBOL (and FORTRAN and PL/1!) too 🙂 and the 026 keypunches – owww I’m really dating myself!

    • A Noonan Moose January 23, 2017 at 10:01 AM #

      If vinyl can make such a big comeback maybe punch cards have a chance! 🙂

  3. fbgcai January 23, 2017 at 9:06 AM #

    ps forgot to mention that YMOYL is one of my all time favourite books too!

    • A Noonan Moose January 23, 2017 at 9:26 AM #

      YMOYL rocks!

  4. Kraken Fireball January 23, 2017 at 3:45 PM #

    This is a neat tool to keep everything in perspective, thanks for pumping it out for us! I’ll definitely be playing with it for the next hour or so. The amount of time that work takes away from our natural life is astounding, I can’t imagine how people can just accept it as normal without challenging the concept. Every time I come by a Thoreau quote I think of FIRE.
    Kraken Fireball recently posted…Focus on the Bigger Picture with a Lion MindMy Profile

    • A Noonan Moose January 23, 2017 at 4:06 PM #

      Thoreau is definitely worth reading even in 2017. What’s especially great is that most of his works are available as FREE eBook downloads. Visit https://www.gutenberg.org/browse/authors/t.

  5. Go Finance Yourself! January 30, 2017 at 5:51 AM #

    Cool calculator. This is a great tool to help easily put a purchase into perspective. No matter how big or small the purchase, if you can see how many hours of work it will cost you, it might change your mind. Cool post!
    Go Finance Yourself! recently posted…Is Your Car Insurance Coverage Good Enough?My Profile

    • A Noonan Moose January 30, 2017 at 8:16 AM #

      Thanks GFY!

  6. Rob @ Money Nomad January 30, 2017 at 11:19 AM #

    Fantastic tool! Thanks for sharing. I will definitely introduce this to a few people. Understanding the time value of a purchase certainly adds another degree of thoughtfulness to your purchases.

    • A Noonan Moose January 30, 2017 at 11:24 AM #

      Thanks very much for sharing the calculator Rob!

  7. Catharine S February 7, 2017 at 7:37 AM #

    It says “infinity hours of labor” when I try it.

    • A Noonan Moose February 7, 2017 at 8:30 AM #

      Actually, i’ve noticed that as well. It seems to be an inherent bug in HTML5 or Javascript (i’m not sure which is at fault). What happens sometimes is that the 8’s go a bit nuts from all their labors and take a short rest so that they look something like this: ∞ ∞ ∞. If you keep trying the calculator, at some point these crazy 8’s should get back on their feet.

      Thanks very much for identifying this bug Catharine. Sorry for any inconvenience it has caused. I’ll see what i can do to fix it.


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