Labor Cost includes the cost of employees’ wages per particular time period, employment taxes and benefits (such as compensation, insurance and pension). Sometimes the expenses associated with social security, equipment and materials are added to labor cost. Labor Cost is usually the biggest value in your financial statement and Labor Cost figure is quite difficult to define.
Total Monthly Labor Cost includes all expenses that refer to wages, employment taxes and benefits paid to all workers per month.
So Total Monthly Labor Cost can be calculated by the following formula:
Total Monthly Labor Cost = Monthly Wages + employment taxes per month + benefits (compensation, insurance and pension) per month.
Average Monthly Labor Cost can be found by dividing Total Monthly Labor Cost by Number of employees. So the formula is as follows:
Average Monthly Labor Cost = Total Monthly Labor Cost / Number of employees.
Total and Average Monthly Labor Costs is a project KPI you may use to avoid cost overruns of your projects.
To calculate Total and Average Monthly Labor Cost please do the following:
- Create the custom field “Total Monthly Labor Cost” with code “cf_total_monthly_labor_cost”
Add wages, employment taxes and benefits for each employee per month to
this custom field
custom field “Average Monthly Labor Cost” with the formula:
$cf_total_monthly_labor_cost / X, where X is the number of workers allocated to a project per month. For example:
- To enable the displaying of total and average value of this KPI select the root or parent task group and click “Custom fields options”
- In “Edit custom fields options” window select the following options:
- select custom field “Total Monthly Labor Cost”
- select “This Task Group” in the field “Settings for”
- select “Enable”
- check “Aggregated (for task group)
- to display thetotal overtime hours for projects select “Sum” and the custom field name “Total Monthly Labor Cost”
- To enter the value of the custom field “Total Monthly Labor Cost” per project you need to right click on task group with project tasks, select “Custom fields options” and select “Edit”
- Set the following custom fields settings for the custom field: “Average Monthly Labor Cost”
- In “Settings for” select “This task group”
- select “Enable”
- select “Calculated by custom field formula (for task group)”
Total and Average Monthly Labor Cost for projects on Task Tree