With the large volume of data traffic growing in past years, Ethernet has been the dominant technology in the LAN. Carriers who already have large TDM networks want to leverage their infrastructure to offer new data services. Because of the native characteristic differences between TDM and data services, carriers have to adapt their networks to handle data traffic more efficiently. Resilient Packet Ring (RPR; IEEE 802.17) technology is specified for this purpose. However, RPR adds a header to the traffic's native payload and reduces the encapsulation efficiency. While using Pseudo-Wire (PW) technology for packetized TDM traffic transmission over RPR, MPLS headers are also needed. These are the Encapsulation OverHead (EOH) penalty of RPR. This paper introduces the different architectures of RPR equipments and the PW technologies. Then we analyze the RPR encapsulation efficiency for both data and TDM traffic transmission: The results show the EOH penalty of RPR.