Why the wage is the smallest part of the problem
A $35 an hour employee working a normal year costs you somewhere north of $110,000 by the time you count the employer side of payroll taxes, workers comp, the truck, his phone, and the health plan. That is the part most contractors get to eventually. The part that bites is what happens next.
You do not get to invoice 2,080 hours. You pay for vacation, holidays, the morning spent at the supply house, the drive to the far side of the county, the callback that was nobody's fault, and the Friday afternoon that went nowhere. Take those out and you are billing maybe 1,600 hours against a cost built on 2,080 paid ones. That is the gap that quietly eats a contracting business, and it is why the cost per billable hour is always meaningfully higher than the burden multiplier suggests.
How to read the result
The headline number is what one billable hour of that employee costs you before a dollar of profit. If the figure is $69 and you are billing labor at $85, you are running about a 19 percent margin on labor, not the 140 percent markup it looks like against a $35 wage. That is the whole point of the exercise.
The charge-this-much figure applies your target margin to the billable-hour cost. Use it as a floor. If your market will not carry it, the answer is not to pretend the cost is lower, it is to cut non-billable time, raise your prices, or both.
The number that actually moves
Of every input on this page, non-billable time is the one you control most and track least. Cutting it from 25 percent to 18 percent on a single employee is worth several dollars an hour on every invoice you write, and it costs you nothing but attention. Stocked trucks, a real schedule, and parts ordered the day before are worth more than a raise is to you.
Workers comp is the other one. If you are in a high rate class and your experience modifier is working against you, that line is not noise, it is thousands of dollars a year per employee. It is worth a conversation with your agent once a year.