APPENDIX A

WAGE RATES
A-1

This appendix describes the derivation of the fully loaded labor rates used in calculating costs of labor. 

Costs for this report are for year-end 2007.

A.1 Derivation of Loaded Wage Rates

Unit labor costs are calculated by adding fringe benefits and overhead to the wage or salary to derive a 

fully loaded labor cost. The basic method is described in Wage Rates for Economic Analysis of the Toxics Release 

Inventory Program (Rice, 2002). The resulting loaded labor rates are given in Table A-1. Costs are calculated for 

several labor categories: Managerial, Professional/ Technical, Clerical, and EPA staff.

A.1.1 Derivation of Labor Rates for Managerial, Professional/Technical, and Clerical Labor

Wages and fringe benefits for managerial, professional/technical, and clerical labor were taken from the 

Bureau of Labor Statistics (BLS) Employer Costs for Employee Compensation (ECEC) data, for December, for 

manufacturing industries.1

The cost of fringe benefits such as paid leave and insurance, specific to each labor category, are taken 

from the same ECEC series. Fringe benefits as a percent of wages are calculated separately for each labor 

category. For example, for December 2007, the average wage rate for professional/technical labor was $33.14; 

the average fringe benefit was $16.65. Fringe benefits as a percent of wages were $16.65/$33.14, or 

approximately 50.2 percent.

An additional loading factor of 17 percent is applied to wages to account for overhead. This approach is 

used for consistency with Office of Pollution Prevention and Toxics economic analyses for two major rulemakings: 

Wage Rates for Economic Analyses of the Toxics Release Inventory Program (Rice, 2002) and the Revised 

Economic Analysis for the Amended Inventory Update Rule: Final Report (EPAB, 2002). This overhead loading 

factor is added to the benefits loading factor, and the total is then applied to the base wage to derive the fully loaded 

wage. For example, the December 2007 fully loaded wage for professional/technical labor is $33.14 × (1+0.502414 

+ 0.17) = $55.42.

Fully loaded costs for managerial and clerical labor are calculated in a similar manner, as shown in 

Table A-1.

A.1.2 Derivation of Labor Rates for EPA Staff

Agency labor costs are calculated based on annual Federal salaries for the Washington-Baltimore area 

published by the Office of Personnel Management effective January 2007 (OPM, 2007). The average salary for one 

Full Time Equivalent (FTE) staff is estimated as the salary for a GS-13 Step 5 employee.

Multiplying the annual pay by an assumed loading factor of 1.6 to reflect Federal fringe benefits and 

overhead, the loaded annual salary of EPA staff was calculated to be $143,976.

The Agency loading factor is from an EPA guide, Instructions for Preparing Information Collection 

Requests (ICRs) (OPPE, 1992, page 30, footnote 9). The 60 percent assumption was labeled “the benefits 

multiplication factor” in the EPA Guide, but has been used in many EPA Office of Pollution Prevention and Toxics 

ICRs to reflect both fringe benefits and overhead for Federal staff. For example, it was used in an August 2000 

document supporting ICR No. 1139.06, with the following explanation:

 

1 Employer Costs for Employee Compensation Supplementary Tables for December 2007 (BLS, 2008a). 
A-2

“The annual costs per FTE are derived by multiplying the annual pay rate by 1.6 (the benefits 

multiplication factor). The multiplication factor used is recommended in EPA's Office of Policy, 

Planning, and Evaluation's Instructions for Preparing Information Collection Requests (ICRs)

(June 1, 1992). An EPA internal phone call between Carol Rawie (OPPT/EETD/RIB) and Carl 

Koch (OPPE/RMD/IMB) on May 3, 1994, indicated that the 1.6 factor included not only benefits 

but also overhead.” (ICR No.1139.06)
A-3

Table A-1 Derivation of Loaded Wage Rates

EPAB Labor 

Category Data Sources Date

Wage Fringe 

Benefit

Fringes as 

% wage

Overhead % 

wage1

Fringe + 

overhead 

factor

Loaded Wages

(a) (b) (c) 

=(b)/(a)

(d) (e)=(c)+(d)+1 (f)=(a) x (e)

Managerial

BLS ECEC, Private 

Manufacturing industries, “Mgt, 

Business, and Financial”2

Dec-07 $41.93 $20.15 48.06% 17% 1.65 $69.21

Professional/

Technical

BLS ECEC, Private 

Manufacturing industries, 

“Professional and related“2

Dec-07 $33.14 $16.65 50.24% 17% 1.67 $55.42

Clerical

BLS ECEC, Private 

Manufacturing industries,

“Office and Administrative 

Support” 2

Dec-07 $16.47 $8.32 50.52% 17% 1.68 $27.59

EPA staff 

FTE

Annual Federal staff cost: OPM 

Washington-Baltimore-Northern 

Virginia, DC-MD-PA-VA-WV, 

area, GS-13 Step 5 pay rates, with 

60% overhead. 3

Jan-07 $89,985/year

$43.12/hour --

[Included 

in 60% 

overhead]

60% 1.6 $143,976/year

$68.99/hour

Notes:

1An overhead rate of 17% was used based on assumptions in Wage Rates for Economic Analyses of the Toxics Release Inventory Program (Rice, 2002), and the Revised Economic 

Analysis for the Amended Inventory Update Rule: Final Report (EPAB, 2002).

2Employer Costs for Employee Compensation Supplementary Tables: December 2007, US Bureau of Labor Statistics, March 12, 2008 (BLS, 2008a).

3The Federal salary is the unloaded Federal GS-13 Step 5 salary for calendar 2007, from the Office of Personnel Management salary table for Washington-Baltimore-Northern 

Virginia (OPM, 2007). The 60% fringes-and-overhead rate is from an EPA guide, Instructions for Preparing Information Collection Requests (ICRs) (OPPE, 1992, page 30, 

footnote 9).
 

A-4

APPENDIX A REFERENCES

BLS, 2008a. U.S. Bureau of Labor Statistics. Employer Costs for Employee Compensation

Supplementary Tables: December 2007 (March 12, 2008) at

http://www.bls.gov/ncs/ect/sp/ecsuptc5.pdf 

EPAB, 2002. U.S. EPA, Office of Pollution Prevention and Toxics, Economic and Policy Analysis Branch. 

Revised Economic Analysis for the Amended Inventory Update Rule: Final Report. Washington, DC. 

August 2002.

ICR No. 1139.06. [Information Collection Request for] TSCA Existing Chemical Test Rules, Consent Orders, 

Test Rule Exemptions, and Voluntary Test Data Submissions: Supporting Statement for Request for 

OMB Review under the Paperwork Reduction Act. Attachment 5, Wage Rates Estimation, August 29, 

2000.

OPPE, 1992. U.S. EPA, Office of Policy, Planning, and Evaluation. Instructions for Preparing Information 

Collection Requests (ICRs). Washington, DC, June 1, 1992.

OPM, 2007. Office of Personnel Management, Salary Table 2007-DCB, Washington-Baltimore-Northern 

Virginia, DC-MD-PA-VA-WV. Accessed from http://www.opm.gov/oca/07tables/html/dcb.asp

Rice, 2002. Cody Rice. Wage Rates for Economic Analysis of the Toxics Release Inventory Program. Washington, 

DC: U.S.EPA, Office of Pollution Prevention and Toxics, Economic and Policy Analysis Branch, June 10,

2002.