US Private Employer Costs Span 23.73 to 78.88 Dollars an Hour
US private employers spent an average 46.89 dollars an hour on employee compensation in June, but the national figure concealed a more than threefold spread between major occupational groups, according to the Bureau of Labor Statistics.
Management, professional and related occupations cost employers 78.88 dollars an hour, compared with 23.73 dollars for service occupations. The 55.15 dollar gap is larger than the entire average cost of employing a private sector worker.
Occupation creates a threefold spread
| Private industry occupation | Total compensation per hour |
|---|---|
| Management, professional and related | $78.88 |
| Natural resources, construction and maintenance | $47.80 |
| Production, transportation and material moving | $36.70 |
| Sales and office | $36.34 |
| Service occupations | $23.73 |
As published. Total compensation comprises wages and salaries plus employer benefit costs.
Management, professional and related occupations cost 3.32 times as much per hour as service occupations, on our calculation.
The difference is not confined to wages. Management and professional workers averaged 54.06 dollars an hour in wages and salaries and 24.82 dollars in benefits, while service occupations averaged 18.26 dollars in wages and 5.47 dollars in benefits.
Across private industry as a whole, wages and salaries averaged 32.82 dollars an hour and benefits 14.07 dollars, bringing total compensation to 46.89 dollars. Benefits therefore accounted for 30 percent of average employer compensation costs.
Employer size produces another large divide
Establishment size is also associated with sharply different compensation costs.
Employers with 500 or more workers spent an average 67.68 dollars an hour, against 37.64 dollars among establishments with fewer than 50 workers.
That is a difference of 30.04 dollars an hour, or 79.8 percent, on our calculation.
The benefit component widens particularly strongly with size. Employers with at least 500 workers paid 23.87 dollars an hour in benefits, compared with 9.76 dollars at establishments with fewer than 50 employees.
Paid leave, insurance, retirement contributions and supplemental compensation all rise as establishment size increases.
Union status and geography widen the range further
Unionised private sector workers cost employers an average 63.06 dollars an hour, compared with 45.49 dollars for non union workers.
The difference is 38.6 percent on our calculation, although bargaining status also reflects differences in occupations, industries and workforce composition and should not be interpreted as a standalone causal effect of unionisation.
Geography adds another layer. Private employer compensation ranged from 55.49 dollars an hour in the Pacific division to 37.84 dollars in the East South Central division, a spread of 17.65 dollars.
That puts the Pacific figure 46.6 percent above the East South Central reading on our calculation.
Industry matters as much as occupation
The industry data are similarly wide.
Utilities carried the highest total compensation cost among the major private industries reported, at 87.11 dollars an hour. Information followed at 84.28 dollars.
At the other end, retail trade averaged 27.07 dollars an hour.
The difference between utilities and retail trade was 60.04 dollars an hour, with the former costing 3.22 times the latter on our calculation. Manufacturing stood much closer to the private sector average at 48.62 dollars.
Those figures reinforce the central point of the release: a national private sector compensation average is heavily shaped by what kinds of workers and businesses sit underneath it.
What this release can and cannot show
The June release is principally a snapshot of compensation cost levels across occupations, industries, establishment sizes, bargaining status and regions.
It should not be used by itself to infer a change in compensation over time. Historical data are available separately, but the news release tables reported here do not present a quarter on quarter or year on year growth rate.
The same caution applies even more strongly to comparisons with state and local government. The bureau explicitly says compensation cost levels in government should not be directly compared with private industry levels because the sectors have different occupational structures and work activities.
For that reason, the analysis here remains within private industry rather than treating public and private compensation as like for like populations.
Why it matters: The 46.89 dollar national average tells only part of the US labour cost story. Employer compensation varies by more than three times across broad occupational groups and by almost 80 percent between the smallest and largest establishment categories. Industry, geography and bargaining status add further dispersion. For businesses assessing labour costs, and for economists interpreting wage pressure, workforce composition can therefore matter as much as the national average itself.
Outlook: The next Employer Costs for Employee Compensation release, covering September 2026, is scheduled for 16 December. A methodological break comes later: with the March 2027 publication of December 2026 data, the bureau will remove workers’ compensation costs from the calculations. Users building comparable historical series will need to account for that change from the December 2026 reference period onward.
Sources: US Bureau of Labor Statistics.
