S/W Ver: 96.71.95R

Labor Cost Calculator 2018: the Working Hours it Takes You to Buy Anything

The tax code has recently changed, so it’s time to update the Labor Cost Calculator (LCC), which was first published in early 2017. Thus far, the LCC has received more than 20,000 views (giving some welcome attention to my puny little website). If you’ve used the LCC before, welcome back! If this is your first visit, I hope you find the experience both thought-provoking and profitable.

  *   *   *

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. So allow me to present the 2018 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.


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 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 2018. Note: if you’re in the 32% bracket, to get the correct answer input 32 and not .32.

Line 3: input your combined top state and local (if any) tax rate for the year. For the latest available list of 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.

2018 Labor Cost Calculator

1. Your Annual Gross Salary: $
2. Your Top Marginal Federal Tax Rate (if 32%, input 32): %
3. Your Top Marginal State + Local Tax Rate (if 6.93%, input 6.93): %
4. Your Total Hours Worked Per Year: hrs
5. Your Total Hours Commuting Per Year: hrs
6. The Total Cost of Your Expenditure (with any sales taxes): $

Once you’ve entered 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 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
© 2018 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 2018).
Let e = a binary value for the Social Security rate as of 2018, which is .062 for gross earnings between $0 and $128,400 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 $128,400 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'd like to explore other Frugal Fringe calculators, visit these links:

Photo of cubicle farm by Tim Patterson

Get Articles Via Email

Binge on the Frugal Fringe! Enter your email address to get future posts delivered to your inbox.

No comments yet.

Please Leave a Comment:

CommentLuv badge

DISCLAIMER. All information on this website appears on an "AS IS" basis. A Noonan Moose makes no representations to any reader as to the completeness, accuracy, or suitability of the information that appears on this website. A Noonan Moose specifically disclaims liability of any kind for any damage or loss that arises from any of the information published on this website or in the book Spend Less Now!