A $100,000 salary does not create a $100,000 staffing cost. It also does not tell a program manager what the contract should budget for that employee.
On September 9, 2026, the Bureau of Labor Statistics released its Employer Costs for Employee Compensation report for June 2026. Private industry employers averaged $46.89 per employee hour worked in total compensation. Wages and salaries accounted for $32.82 or 70% of the total, while benefits averaged $14.07 or 30%.
For government contractors, those figures are useful only as benchmarks. Program managers need enough labor capacity to support delivery, recruiters need compensation that can attract qualified candidates and pricing teams need assumptions that reflect actual employer costs without counting the same expense twice.
In this blog, we explain how GovCon teams can use BLS compensation data to build a more realistic staffing budget.
Start With What the BLS Number Actually Means
The BLS Employer Costs for Employee Compensation measure reports average employer costs per employee hour worked for wages, salaries and benefits. In the June 2026 private industry data, total compensation averaged $46.89 per hour, made up of $32.82 in wages and salaries and $14.07 in benefits. Benefits include paid leave, supplemental pay, insurance, retirement and savings and legally required benefits such as Social Security, Medicare, unemployment insurance and workers’ compensation.
That makes the BLS figure useful as a national reference point, but not as a recommended GovCon labor rate, fringe rate or pricing multiplier. The benchmark can test assumptions, but actual budgeting should come from the employer’s cost structure and the role being filled.
Do Not Add 30% to Salary
The June report says benefits represented 30% of total private industry compensation. It does not say employers should add 30% to base salary. Wages represented 70% of total compensation, while benefits represented the remaining 30%. Adding 30% to the wage figure would not reproduce the BLS total.
For staffing and pricing teams, the safer approach is to use the 30% figure as context about the composition of total compensation. Then replace that benchmark with actual company costs wherever reliable data exists. If finance already knows the cost of health insurance, retirement contributions, paid leave and payroll related expenses, those figures should drive the budget rather than a national percentage.
Build the Budget in Three Layers
A cleaner staffing model separates costs into three layers. The first is candidate compensation: base salary or hourly pay, plus any role specific premium or incentive needed to attract the person. The second is employer cost: benefits, paid leave, payroll related costs, insurance and retirement contributions. The third is contract pricing assumptions: recruiting, onboarding, indirect costs, equipment, training or other expenses that may affect the price model depending on the company’s accounting treatment and the contract.
Keeping the layers separate reduces double counting and makes the budget easier to explain across recruiting, HR, finance and program teams. Before adding any expense, ask where it is already captured. Paid leave, payroll taxes, health insurance, retirement, recruiting and onboarding can all be overstated if teams combine national benchmarks with internal fringe rates and separate cost lines without checking for overlap.
Use Market Data for the Actual Role
A national compensation average cannot tell a contractor what a specific cloud engineer, cybersecurity analyst, program manager or cleared specialist will cost in one labor market. BLS Occupational Employment and Wage Statistics can provide national and local wage estimates by occupation, but those numbers should still be compared with recent candidate expectations and internal hiring results.
Duty location, required experience, certifications, work arrangement, shift coverage and clearance requirements can narrow the qualified candidate pool. A role that looks affordable against a broad wage benchmark may be harder to fill once the solicitation requires a specific clearance, niche certification and onsite presence. Pricing teams should therefore combine external data with recent offers, accepted salaries and feedback from recruiters working the market.
Connect Staffing Cost to Program Risk
Compensation is not only a budgeting issue. It can become a delivery issue when the budget is too low to attract or retain qualified people. A difficult to fill position may stay vacant longer, increase workload on existing staff or create coverage gaps that affect program performance.
Program managers should identify which roles carry the highest staffing risk before locking the labor plan. A cleared specialist with rare qualifications may deserve more recruiting lead time and a different compensation assumption than a role with a broad candidate pool. The goal is to test whether the budget reflects the actual difficulty of filling the requirement.
Build a Staffing Cost Worksheet
A practical worksheet should keep major cost categories separate and identify the source of each assumption.
| Budget Layer | What to Capture | Best Source |
|---|---|---|
| Candidate compensation | Base salary or hourly wage, premiums or incentives | Local market data, internal ranges, candidate data |
| Employer costs | Paid leave, insurance, retirement, payroll related costs | HR, payroll and finance |
| Hiring costs | Recruiting, sourcing, onboarding and pre employment activities | Recruiting, HR and security operations |
| Contract assumptions | Qualifications, clearance, duty location, schedule and work arrangement | Solicitation, PWS and program team |
| Pricing assumptions | Indirect costs and other approved inputs | Finance and company pricing methodology |
Add an owner and source date for each assumption. That helps reviewers see where each number came from, who can validate it and when it was updated. If the hiring market changes, the team can update the affected assumption without rebuilding the entire model.
Use BLS as a Benchmark, Not a GovCon Rate
The latest BLS compensation data gives contractors a useful point of comparison, but it should not become a universal labor rate shortcut. BLS averages span many industries, occupations, locations and employer types. A contractor hiring specialized talent for a federal program may have very different costs.
Use the benchmark diagnostically. If your employer cost assumptions differ significantly from BLS averages, ask why. Geography, occupation, benefits design, workforce mix or contract requirements may explain the difference. What matters is that each assumption has a clear source and supports a staffing plan the organization can actually execute.
Bottom Line
The June 2026 BLS data shows average private industry compensation of $46.89 per employee hour worked, with wages accounting for 70% and benefits 30% of the total. Those figures can help government contractors test whether assumptions are reasonable, but they are not a recommended GovCon labor rate and they do not mean adding 30% to salary.
A stronger staffing budget separates candidate compensation, actual employer costs, hiring expenses and contract pricing assumptions. It then adjusts those inputs for local pay, qualifications, clearance requirements and program needs. The result is a budget that does more than estimate cost. It helps determine whether the organization can hire and maintain the workforce the contract requires.
Frequently Asked Questions
The report measures average employer costs per employee hour worked for wages, salaries and benefits. Government contractors can use it as a benchmarking reference, but it does not provide a recommended GovCon labor rate.
No. BLS reported benefits as 30% of total compensation, not 30% of wages. Contractors should use actual employer cost data when building staffing budgets rather than applying the percentage directly to salary.
Separate direct candidate compensation, employer costs, recruiting and onboarding expenses and contract pricing assumptions. Then adjust those inputs for location, required qualifications, clearance needs and the work arrangement.
Use BLS data to test whether internal assumptions appear reasonable. Combine it with local wage data, actual benefit costs, recent hiring results and contract specific requirements before setting a staffing budget.
Clearance requirements can reduce the available candidate pool and increase recruiting difficulty or lead time. Contractors should compare clearance requirements with actual pipeline data and candidate compensation expectations.
Build Staffing Budgets Around Real Hiring Conditions
XieTek LLC provides Staffing Services designed to help government contractors align hiring capacity with program requirements and workforce demand. From identifying qualified candidates to supporting staffing coordination and workforce planning, our team helps organizations connect hiring requirements with realistic compensation expectations and program coverage needs.
Ready to strengthen your staffing plan before hiring gaps affect delivery? Contact XieTek LLC today to explore staffing support aligned with your program requirements.