what is the cost of labor 
the cost of labor is the sum of all wages paid to employees as well as the cost of employee benefits and payroll taxes paid by an employer the cost of labor is broken into direct and indirect overhead costs direct costs include wages for the employees who produce a product including workers on an assembly line while indirect costs are associated with support labor such as employees who maintain factory equipment these costs known as the burden rate include all auxiliary indirect and incidental costs of hiring and retaining an employee understanding cost of labor