How to Create Labour Rates

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Labour Rates

The default overhead represents the corporate overhead for all estimates, and may cover expenses including, but not limited to, rent, accounting fees, marketing, vehicles, internal staff and management wages, and other costs. This should be the same figure as the overhead in the Rates tab in employee and, if applicable, contractor card files.

In the labour rates table, the Including Overhead column displays which labour rates include overhead. The table also displays the Default labour rate, and which labour rates have been added to all customers in the Customer Template column.

To set a default overhead:

1. Go to System > Setup > System Setup > Labour > Labour Rates.
2. Enter the Default Overhead.
3. Click Save.

Please ensure you consult your accountant before setting or adjusting the default overhead. You can adjust the default overhead at any time and this updates any quotes / jobs created in the future. For quotes / jobs that have already been created when the default overhead is changed, you need to change the overhead manually on the quote / job as well.

To create a labour rate:

1. Go to System > Setup > System Setup > Labour > Labour Rates.
2. Click Create Labour Rate.
3. Enter the Labour Name.
   • This may appear on customer quotes and invoices.
4. Enter the Cost Rate excluding tax.
   • This includes, per hour, the total of three rates: the amount you pay your employee, their employment costs such as superannuation and annual leave, and your company overheads.
5. If you are excluding overhead, the cost rate includes the employee's pay rate and other employment costs.
6. Enter the Markup / Sell Rate. The other calculates automatically.
7. Enter a Multiplier if necessary.
   • Use multipliers to account for technicians who take longer than the estimated time to complete work. For example, when an item with 60 mins of estimated time and a labour rate with a 1.5x multiplier are added to a job, 1 hour of billable labour is increased to 1.5 hours.
8. Select the Sales Tax Code.
9. Select or clear the Cost Rate including overhead check box as applicable.
10. Select Add to all customers to add the labour rate to all existing customer card files.
11. If this is the labour rate you use most often, select Set as default labour rate to automatically apply the labour rate to all quotes and jobs.
    • You can override the default at the customer and job level.
12. Click Create.

You can only set one labour rate as the default. This default is used as a basis for the labour component of catalogue items and standard price pre-builds if the pre-builds are based on defaults.

You need to ensure that when you adjust a labour rate it is consistent across the applicable employee, contractor, and customer card files.

To edit a labour rate:

1. Go to System > Setup > System Setup > Labour > Labour Rates.
2. Click the labour rate you wish to edit.
3. Adjust the labour rate as required, toggle on Update Changes to:
   • Select All customers to apply the update to all customers regardless of whether the rate has been manually adjusted on the customer card.
   • Select All Customers with the current rate to only update customers that have not been manually adjusted on the customer card level. This means that customers with manually adjusted labour rates are not affected.
4. Click Save.

The default labour rate defined in System Setup can be overridden for specific customers. You can also add and remove labour rates for specific customers. Learn more in Add labour rates.

If you want a specific customer to have a different cost price, it is recommended to use a different labour rate instead of changing the cost price on an existing labour rate.

If no labour rates are assigned to a customer, you are not able to select labour rates when creating a job or quote for that customer.

When setting pay rates in your employee and / or contractor card files, you need to ensure these are consistent with your labour rates so that your estimated costs are accurate.

You can then associate labour rates with schedule rates for employees and contractors. This is useful for calculating accurate overtime costs for specific roles in your business. Learn more in Set a pay rate and bill rates.

If you select a labour rate as the default at the system, customer, or job level, this labour rate is automatically added to jobs and quotes when you create them.

You can add labour rates to service quotes, project quotes, service jobs and project jobs. Learn more in Manage labour in a service quote, Add labour and Manage labour in a service job.

Need additional help?

Try Walk Me Through, our step-by-step guidance tool, to create labour rates.

In Simpro Premium, go to Help > Walk Me Through and search Labour Rates.

Learn more in How to Use Walk Me Through in Simpro Premium.