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Warehouse Labor Cost per Order Calculator

Pricing, staffing and outsourcing decisions all depend on knowing what an order costs in labor. This calculator builds the figure from pick, pack and ship times, then converts it to daily hours and headcount.

Your numbers

orders
3 lines
min

Include travel, search, pick and scan.

min
min
per hour
28 %
hours

Paid shift length less breaks, meetings and idle time.

Your results

Labor cost per order
$2
People needed
14
Labor minutes per order
4.3
Loaded hourly rate
$24
Labor hours per day
86 hrs
Labor cost per day
$2,092

Direct labor only. Add supervision, equipment, packaging and overhead for a full cost to fulfill.

Save results:

Labor cost per order vs lines per order

Sweeps Lines per order from 1 to 12, holding your other inputs fixed.

Labor cost by customer from your data

Optional: calculate cost to serve by customer using WMS task times and ERP payroll.

Optional. The tool and every export work without this. No spam.

How to use it

Time the three stages separately: pick per line, pack per order and label or staging per order. Use observed averages across several people, not your best performer. Enter wage and a burden percentage for taxes and benefits, then the productive hours you really get from each person, after breaks, training and waiting. The slider on lines per order shows how basket size drives the cost.

  • Time at least 30 orders per stage
  • Use the average of all pickers
  • Use paid hours less breaks for productive hours
  • Run the model separately for single line and multi line orders

The method behind it

Minutes per order equal lines multiplied by pick time, plus pack time and ship time. Loaded rate equals wage times one plus burden. Cost per order is minutes divided by 60 times the loaded rate. Labor hours per day are orders times minutes divided by 60, and headcount is hours divided by productive hours per person, rounded up. This approach is widely used for engineered labor standards.

Reading the result

With three lines per order, the example takes 4.3 minutes per order and costs about 1.75 in labor, so 1200 orders need around 86 labor hours and 14 people. The chart shows each extra line adds a similar increment, which is why single line orders have higher cost per line than larger orders. Compare the figure with your shipping and packaging cost to see the full picture.

Common mistakes

Using engineered best case times without allowances understates cost. Forgetting that pack and label time do not scale with lines gives the wrong sensitivity. Leaving out indirect roles, such as receiving, replenishment and returns, makes direct labor look cheaper than the real cost to serve.

  • Using best case instead of average times
  • Ignoring productive hour allowances
  • Leaving out indirect labor
  • Averaging single line and multi line orders together

Frequently Asked Questions

How do I calculate labor cost per order?

Add up the labor minutes to pick, pack and ship the order, divide by 60 and multiply by the loaded hourly rate. The loaded rate is wage plus burden for payroll taxes and benefits.

What productive hours should I use?

Use paid hours minus breaks, meetings, training and idle time. Many operations see 6 to 7 productive hours from an 8 hour shift. Measure it from timekeeping or task systems when possible.

Does this include shipping cost?

No. It is labor only. Add packaging, carrier charges, equipment and overhead to get the total cost to fulfill. Keeping them separate helps you see where improvement is possible.

How does order profile affect cost?

Pack and ship times are per order, so small orders carry a higher cost per line. Larger baskets spread that fixed time. Model different order types separately for accurate pricing.

Netray can calculate labor cost per order from your WMS task times and ERP payroll data, by customer and by channel, so you price fulfillment on real numbers.

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