Standard Labor Rate Custom Field

Standard Labor Rate

Standard Labor Rate is estimated cost per direct labor hour. It includes all costs associated with direct labor wages, taxes paid per each employee along with fringe benefits. Usually Standard Labor Rate is equal to Average Wage Rate per hour that is computed by the formula below:

Standard Labor Rate per direct labor hour = Average Wage Rate = Average Wage rate per direct labor hour + Average Employment Taxes + Average Fringe Benefits

Average Wage Rate per direct labor hour = Total hourly wages /Number of all employees

Average employment Taxes per direct labor hour = Total employment taxes of all employees / Number of employees

Average fringe benefits per direct labor hour = Total fringe benefits of all employees / Number of employees

For example, if average employee’s wage rate per hour of work is $15 USD, average employment taxes are $1.5 USD and average fringe benefits are $4.5 USD, Standard Labor Rate per direct labor hour is calculated as:

Standard Labor Rate = $15 USD + $1.5 USD + $4.5 USD = 21 USD 

Standard Labor Rate is billed irrespective of position and experience level of employees. It is used to simplify the use of standard costs. Standard Labor Rate can significantly vary from Actual Labor Rate that is determined by employer.

Standard and Actual Labor Rates help calculate Direct Labor Rate Variance which shows whether the employer underpaid or overpaid to direct labor employee.

To calculate Standard Labor Rate (or Average Wage Rate) please follow the steps below

• Add custom field “Wage Rate” or with Code “cf_wage_rate”



• Add custom field “Employment Taxes” with Code “cf_ employment_taxes”



• Add custom field “Fringe Benefits” with code “cf_fringe_benefits”



Note: you need to add the values of the custom fields “Wage Rate”, “Employment Taxes”, “Fringe Benefits” per each employee to calculate the average values of these custom fields for the whole company.

• Add custom field “Average Wage Rate” with Code “cf_average_wage_rate” and formula:

$cf_wage_rate / X, where X is the number of direct labor employees



• Add custom field “Average Employment Taxes” with Code “cf_average_employment_taxes” and formula:

$cf_employment_taxes / X, where X is the number of direct labor employees



• Add custom field “Average Fringe Benefits” with Code “cf_average_fringe_benefits” and formula:

$cf_fringe_benefits / X, where X is the number of direct labor employees



• Add custom field “Standard Labor Rate” with Code “cf_standard_labor_rate“ and the formula:

$cf_average_wage_rate + $cf_average_employment_taxes + $cf_average_fringe_benefits



• On Task Tree select task group for which you need to display Standard Labor Rate and select “Custom fields options”



• Set the following custom fields settings for the custom fields “Wage Rate”, “Employment Taxes” and “Fringe Benefits”
  • In “Settings for” select “This task group”
  • select “Enable”
  • in “Aggregated (for task group)” field select “Average” from drop-down list and the corresponding custom field name:







• Set the following settings for the custom fields “Average Wage Rate”, “Average Employment Taxes”, “Average Fringe Benefits” and “Standard Labor Rate”
  • In “Settings for” select “This task group”
  • select “Enable”
  • select “Calculated by custom field formula (for task group)”









Standard Labor Rate on Task Tree