What is Labor Burden?
Labor burden is what an employee actually costs an employer aside from the wage they earn. The labor burden refers to the additional expenses the employer will pay for the employee like the payroll taxes, workers comp, health insurance, paid time off etc. The labor burden is calculated to a percentage that can be added to the employee's wage. This will allow you to view your overall labor cost for each employee. It is important to understand the true cost of an employee because often, it's gauged to determine the pricing for your services or products to your customers. Please see your tax advisor to get an accurate labor burden percentage.
How To Add Labor Burden to Your Employees
- From your Main Menu, go to "Employees"
- Click on one of your employees
- Select "Wage" in the tabs
- Next to Wage, select "Change"
- Scroll to the bottom of the screen and enter the Labor Burden percentage in the correct field
- Select "Save"
You will need to repeat the same steps to add the labor burden for each employee.
Viewing the Reports That Include Labor Burden
- From your Main Menu, go to "Reports"
- Click on any of the three reports under the "Payroll" section (these three reports show your labor burden, "Employee", "Employee Project", & "Project Employee")
- The section that includes your labor burden is under the "Est. Cost" column on the far right of the screen.
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