Labor and burden in job cost
How self-performed labor is planned to post to cost codes at burdened cost from one rate table, so the estimate, job cost, T&M and change order pricing all use the same numbers.
This is on the roadmap and not built yet.
If you self-perform work, labor is often your most volatile cost and the hardest to see in time. Two things make it hard: hours arrive late (timecards, then payroll, then posting), and the cost of an hour isn’t the wage. Labor burden (payroll taxes, workers’ comp, insurance, benefits and paid time off) can add a large percentage on top. This page explains how we plan to post labor at burdened cost from one rate table. Today the app has Timesheets (with a submit and approve workflow) and Workforce Planning; posting hours to job cost at burdened rates is Planned.
Burden, briefly
| Layer | Examples | Usually expressed as |
|---|---|---|
| Statutory | FICA, FUTA, SUTA, workers’ comp | % of wage, or rate per $100 of payroll by class code |
| Payroll-rated insurance | General liability, umbrella where rated on payroll | % of wage |
| Benefits | Health, retirement, union fringes | $ per hour, or % of wage |
| Paid non-productive time | Holidays, vacation, sick | % of wage, spread over productive hours |
Rates differ by trade (workers’ comp class codes, union locals) and change at least yearly. Payroll taxes with annual wage caps make actual burden higher early in the year and lower late in the year.
One rate table
Burden is planned to live in one place: a labor rate table, by trade or labor class and by effective date.
Each row holds a labor class (for example Carpenter, Journeyman Electrician, Laborer), the workers’ comp class code, the base wage or wage range, and burden components with their basis. Rows have an effective date, so a new year’s rates don’t rewrite last year’s job cost.
- Estimates price labor at the burdened rate for the year the work will happen.
- Job cost posts hours at the burdened rate in effect on the work date.
- T&M tickets and change orders price labor from the same table, plus the contract’s markup.
- Certified payroll and prevailing wage reports read the wage and fringe parts separately.
From timecard to cost code
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Hours captured in the field
Foremen enter crew hours by cost code in Timesheets, from a phone browser. See Field tools on phones.
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Approved
The super or PM approves hours per your approval rules. Planned: approved hours post to job cost right away, at the burdened rate, so labor cost is current before payroll runs.
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Payroll runs
Your payroll system or provider pays wages and calculates taxes and deductions. os.construction is not meant to replace payroll processing.
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Actual replaces estimate
When payroll posts, actual wages replace the approved-hours estimate on each cost code. Burden stays at the applied rate.
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True-up
The difference between actual burden (taxes, premiums, benefits) and applied burden goes to an overhead variance account, reviewed monthly and at year-end. If you spread it back to jobs instead, a voided payroll run should not earn its job a share.
Labor on the job cost report
Each labor cost code shows budgeted hours and dollars, actual hours and dollars, and a forecast. Because hours post daily at burdened cost:
- Productivity (units installed per hour, where quantities are tracked) can be compared with the estimate while the work is happening.
- Rate variance (paying more per hour than estimated) is separated from hours variance (using more hours than estimated).
- Cost to complete for labor can be projected from remaining hours at current productivity. See Job cost reports and cost to complete.
Related: Cost codes and budgets, Commitments and change orders. Glossary: labor burden, union fringe, certified payroll, prevailing wage, time and materials ticket.
Keep exploring
Related across os.construction
- GlossaryLabor burdenThe cost of employing a worker beyond base wage: payroll taxes, workers' comp, insurance and benefits, as a percent or per-hour add-on.
- GlossaryUnion fringePer-hour contributions a union contractor pays into health, pension, annuity and training funds, as set by the collective bargaining agreement.
- Free toolLabor burden calculatorBurdened hourly cost from wages, payroll taxes, comp, benefits and fringe.
- Free toolChange order markup calculatorPrice a change order with labor burden, overhead and profit markups.
- BlogField to ledger: why daily logs are financial documentsThe daily log is usually treated as a field formality. It's actually the first record of almost every number accounting cares about: labor, equipment, deliveries, delays and changes. Here's what to capture, and how it flows to cost, billing and claims.
- BlogThe 3-way match, explained for construction APThe textbook 3-way match is a purchase order, a receiving report and an invoice. Construction AP needs a version that works for subcontracts, progress billing, retainage and lien waivers. Here's what to match, and where it breaks.
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