How Job Cost and Margin Are Worked Out
Every job shows what it cost to do against what it charges: labour at each person's cost rate, materials at what they cost to buy, and the margin that leaves. This page explains where each figure comes from, so you can trust it or see why it is off.
Applies to: anyone who can see a job's money: erp:operations:jobs:financials or erp:finance:ar:view. Setting a cost rate needs erp:hr:employees:financials.
Prerequisites: Setting Up Employees, Time Tracking on Jobs and Materials & Expenses
Where you see it
Open a job. The Job Summary card ends with Cost and margin: Labour at cost, Materials at cost and Margin, with the margin also shown as a percentage of the charge. A job losing money shows its margin as a loss.
Labour at cost
Labour is the job's recorded time at each person's Cost rate (per hour) from their employee record: what an hour of them costs you, wage plus on-costs. If no cost rate is set, their employee hourly rate is used instead.
- All time counts, billable or not. Time you chose not to bill was still paid for.
- Breaks are taken out. A break recorded on a time entry is not costed.
- Only finished time counts. Someone still clocked on adds nothing until they clock off.
- Each entry keeps its own rate. Time is costed at the cost rate in force when it was recorded, so a pay rise changes the cost of new work but not work already done.
When some time has no rate
If no cost rate is set, the employee's hourly rate is used instead. If neither rate is set, their time is left out of the labour figure and the card says how much time is missing a rate. Set a cost or hourly rate on their employee record to include that time. A cost rate explicitly set to zero is used as zero.
Materials at cost
Materials are every material recorded on the job, at its quantity times its unit cost: what you paid, not what you charge. Materials you are not billing still count, because you still bought them.
Margin
The margin is what the job charges before GST, less labour at cost and materials at cost. The charge is the same subtotal the rest of the Job Summary card works out from your billing rules, so the margin moves as time, materials and billing change.
The margin covers only labour and materials recorded on the job. Travel, vehicles, overheads and anything else not recorded against the job are outside it.