View Full Version : Labor Burden

09-17-2001, 03:18 PM
We need to be able to add 35% of our payroll to job cost to account for labor burden (payroll taxes, insurance, etc.) In PT for DOS, there was a field that asked for a percentage and automatically calculated the figures and posted them to the appropriate job. Any idea how to do this in PT Complete for Windows?

09-17-2001, 07:55 PM
You have to do it manually with a general journal entry. We apply all of these type of expenses to an expense account through purchases or payments. At the end of the quarter, we credit the labor burden expenses against a debit to a cogs account and apply to the job at that time. The expenses are divided to the various jobs based on the percentage of the labor on the particular job to the total labor for the quarter on all jobs.

09-18-2001, 10:20 AM
It's impossible to add in the burdens as suggested if you do a LOT of jobs per month, what a lot of work. Please e-mail the Peachtree enhancement request department to request adding the overhead burdens to Job Cost in the next upgrade. With so many contractors using the Windows program it's baffling why the job cost overhead adder feature isn't available. Since our overhead costs remain fairly constant, and we really only want to see how you did on the job without going through all the GL entries, I send the job cost report to Excel using a spreadsheet that already has the formulas for adders. I will e-mail you a copy of the spreadsheet if you give me your e-mail address. I accrue the fringe benefits each week through an ER formula in Payroll so that our GL numbers are always current (debit the COGS account, credit the accrued fringe benefits) and then debit the accrued fringe benefits when they are actually paid.

09-18-2001, 01:10 PM
I wouldn't say it is impossible to apply the labor burden the way I suggested, because we are doing it. It takes an hour or so to apply the indirects each quarter. (We also apply other overhead expenses to the jobs on a percentage basis.)

We use the actual expense column from the job costs by type report. Since this report keeps a running total, you have to subtract the amounts from the report for the previous quarter to find the amount spent on the current quarter.

It probably should be done each month, but it is a pain. I have written letters, called, and emailed suggestions to Peachtree to correct this ommition. Unfortunately they have not acted, which is why we are still using V7. We even looked at switching to the other Peachtree product, but it is too DOS like. I am not interested in the MAS90 product because of all of the modules. Not to mention the cost.

There are many other improvements that should be made if Peachtree Complete intends on continuing to market to contractors. I keep hoping that one of the 3rd party suppliers will fill this gap. There are thousands of contractors out there who could use such an improved Peachtree Complete, most of whom are now using Quickbooks.

09-19-2001, 08:03 AM
I guess I shouldn't have said your way would be impossible; it just would be pretty tough to do if you need a job cost report more than once per month or per quarter. In our business we run it once per WEEK. We wanted a report similar to the one like blpop mentioned that we used to run in the DOS version with a certain percentage added to the raw labor costs and another percentage added to the material costs. So I guess it depends if you're more interested in actually sending the overhead costs within Peachtree to job cost, or just wanting a snapshot of how a job's doing at the moment using standard adders in an Excel spreadsheet without trying to divide up each month or quarter's overhead costs between jobs. Either way it's not really an exact number; the only way for that to happen is for Peachtree to get on the ball and add in the ability to mark up costs in job cost like they do in time and billing!

Robert Walraven
09-19-2001, 05:59 PM
This is exactly the kind of problem we are looking for to solve with small Peachtree add-ons. If I can get a detailed specification of the procedures you currently use and a description of the functionality you would like to see, I think we can probably crank out a $99 add-on pretty quickly.

The general approach I think should be that the data you want to work on is loaded into an Excel spreadsheet along with all formulae you use. You can work on the data in Excel and then click another button and the appropriate data is written to Peachtree.

09-20-2001, 06:19 AM
Actually the reason I switched from the DOS version of Peachtree to the Windows version was to AVOID using third-party products. I had purchased a couple of enhancements for Accounts Receivable/Invoicing (again because Peachtree refused to make them part of their regular program) that I used for years, but upgrading was a nightmare. Since the ability to mark up labor and material is available in time and expense, I would think there no reason Peachtree can't add that function to job cost. For now it's fairly easy to send the job cost report to Excel and apply the formulas, it just doesn't get recorded within Peachtree.

Robert Walraven
09-20-2001, 10:10 AM
I don't think there is much chance of getting Peachtree to add that functionality. Even if they did, it wouldn't be until the next release in 2002. Since you are not interested in solving the problem and would rather continue doing things the hard way, I'll scrap the idea of producing a cheap tool for you.

09-20-2001, 10:22 AM
I also would like to have Peachtree develop a solution for contractors, but I am not holding my breath. Both Fixed Assets and Time & Billing were separate add ons at one time. Now they are part of Peachtree Complete. A 3rd party solution may be the first step to providing a solution for Peachtree.

I would like to 3rd party solution tailered to the needs of a construction company and think there are others who would also be interested. The solution should do more that just job cost the labor burden.

A few ideas for the solution are listed here.

Apply job costs to labor burden
Apply job costs to indirect overhead
Allow for percent complete accounting
Provide a job cost report that tracks work complete, the PAR, and projects the cost at completion
Export the job cost infomation to update a Project schedule
Allow the ability to group and subtotal phases in the cost report
Require job costing for certain designated accounts

09-21-2001, 10:49 AM
I would agree with Nick, that a lot of businesses do have peculiar needs - some of them just wants input forms created in a particular format, while other have more complex business rules. And yet they want an affordable and known product, like Peachtree for their accounting. This is the gap that perhaps Multiware can best fill in. However, the current PAWcom pricing is not attractive, US$379 - which is the same price as PCW.

Perhaps, PAWcom can be broken up into a developer's edition and a reader's edition - similar to Adobe Acrobat. People like me can perhaps invest in the developer's edition, whilst my clients can just buy the reader's edition.

Robert, can you just list the applications (with some screen shots) of the applications that have been created with PAWcom on the Multiware site. Some of them might be what some of my prospective clients are looking for.

Robert Walraven
09-22-2001, 06:54 AM
Multiware is just getting started in building end-user add-on tools for PCAW, so we are looking for ideas right now. We'll be putting up some screen shots on our web site probably next month. This is what we are working on:

1. User password recovery tool for V7-V9. Finished. $99.

2. Very flexible price changer that works in conjunction with Excel. Finished but waiting for approval to release. $99.

3. Excel-based report design tool. Pulls raw Peachtree data into Excel, and provides many predesigned report templates. Uses Microsoft Query tool that comes with MS Office to allow complex query design similar to Crystal Reports. We are just getting started with this and hope to have something ready by end of year. $149?

4. Contact-management tool. This will essentially be the contact management functionality that we now provide in PawCom encapsulated into a standalone application that doesn't require Access. It will include the ability to create invoices in text form for emailing. Ready by end of year. $199?

We have thought about a read-only version of PawCom that sells for less. One problem we are concerned about is that not everyone has Access - it is not included in the version of Office that is normally supplied by PC manufacturers. On the other hand the Access report design capabilities are really great and there are lots of books on how to use Access. If we did this, we probably would drop V7 support because of the major differences it has in journal structure. Would $199 be an acceptable price?

09-24-2001, 10:34 AM
1. Found another way around it. Takes only 5 minutes to copy files around.

2. May be useful for companies with frequent price changes or hundreds of product items.

3. Good if it can provide real-time access to the data and makes Peachtree's data files easier to use. Price should not be more than Crystal Report add-on.

4. No comment yet. Have to look, if there is any real value in it.

If you can secure PAWcom by the number of companies it can access - then you can have unlimited $379, and $99 for 1 company. This allows developers to package PAWcom into their add-on applications at a reasonable price.

Well, that's only my personal opinion. The Malaysian market may be very different from the USA market.

Best Regards.

10-02-2001, 10:58 AM
I think what you have to realize is that every single Peachtree user that I know has VERY limited programming knowledge. We deal in accounting, not computers. Most of your conversations about these third party products are over our heads in technical terms. Any product that's going to manipulate my data is going to create a problem for me should something go wrong because there's no local support.

10-23-2001, 08:03 PM
You can cost 35% of payroll to jobs by using ER (employer taxes) and creating a formula to multiply Adjust_Gross by 35%.

I also cost Worker's Comp insurance this way.

I have my 20 pay levels set to be equivalent to Workers Comp classifications.

I have Inventory Activity Items set up to be equivalent to Workers Comp classifications.

I have Company Tax Table entries for Workers Comp and for Burden.

This took a bit of experimentation to get working. AND, I won't be sure the setup is correct until I use it for a month or so. Just got it working yesterday. Tried a couple of paychecks and they worked just fine, costing out the correct WMC amounts and the Burden amounts.

10-24-2001, 11:26 AM
Sounds interesting. But how do you get the overhead to show up in job cost?

10-24-2001, 12:13 PM
Thanks for the reality check, Westphal.

I am just working on this job costing process - received the software last week and am now trying it out.

It seems that although I can get labor burden to calculate, it will only end up in the general ledger expense account? Then, the process described above of allocating this amount to the jobs involved needs to be accomplished.

I haven't even checked, but I was hoping (assuming - a bad thing to do) that payroll ER expenses were costed out to the jobs, along with the corresponding payroll.

10-24-2001, 12:53 PM
Hello Pete,

I have been using Peachtree for a contracting business since V2. I also use the 20 pay levels to account for 10 industrial insurance rates. (10 for regular time and 10 for overtime, because industrial insurance is calculated by the hour here.)

No matter how hard you try, you will not be able to get Peachtree Complete to automatically job cost the labor burden calculated with the payroll tax tables.

We allocate our labor burden by percentage at the time the burden is paid.


10-25-2001, 06:17 AM
I just set up a different payroll formula (ER)for each workers comp rate according to classification and pick the proper one for each employee's default (we are also contractors). The formula multiplies out the overtime wages to arrive at total hours paid times the rate.

10-25-2001, 11:24 AM

I would like to multiply the PAY LEVEL times the associated Pay Rate. The formula window recognizes the PAY LEVEL (such as CARPENTER, OT_CARP, or REGULAR, OVERTIME, SPECIAL per Peachtree defaults), but the window does not recognize the field Pay Info-Rate/Amount 1 (I got this field name by using the Export command and looking at fields for Employees). Do you know a way to multiply PAY LEVEL x PAY RATE? I can not use the ADJUSTED_GROSS because this is the gross pay for the entire week for all pay levels.

I don't know if any of this is worthwhile, because, as you and others have pointed out, the cost is simply calculated and expensed to general ledger. The process of allocating to jobs must still be accomplished.

10-26-2001, 10:56 AM
The pay rate can be linked to a pay level field name in the Maintain > Employee/Sales Reps > Pay Info tab. The field names, aka pay levels, that appear are those that were set in the Maintain > Default Information > Employee Defaults > Pay Levels tab. Setting up the payroll tax table to handle the calculation for Washington L&I insurance requires two tax formulas, one for the employer portion and one for the employee portion. The amount is irrelevant because the insurance is calculated based on the number of hours worked. The L&I formula uses the regular hours plus the overtime hours multiplied by the insurance rate for that type of work.

It sounds like your workers comp rate is based on the employees pay instead of the hours. If that is the case you may need to switch to another method. The drawback is that you will be able to use only two workers comp rates in for each specific employee.

While the Westphal method would work, maintaining all of those tax tables will be tedious and you will be limited to one rate for each employee.

You could instead enter a separate rate for each employee in the Special 1 and Special 2 fields of the Maintain > Employee/Sales Reps > General tab > Withholding Information box. That number is linked to the tax table through the EMP_SPECIAL1_NUMBER and the EMP_SPECIAL2_NUMBER variables. You will still have to use a couple of pay levels to apply the amounts to the special 1 and the special 2 rates by using hours. Your tax formula could then pull the number of hours allocated to each pay level and multiply those hours by the special variable that combined the employee pay rate and the workers comp rate for that employee. For example if your employee makes $15 per hour and the workers comp rate is 12%, you would enter 1.8 for the employees special 1 field. If the workers comp rate for the other task was 20%, you would enter 3 in the special 2 field. The tax formula will have to multiply the overtime hours by 1.5 to calculate the rate correctly.

Even though the burden is not posted to the job ledger, it is worth setting this up because it will save money with the L&I insurance and aid in filing the paperwork required to pay the insurance.


10-26-2001, 12:00 PM
Thanks Nick,

My Workers Comp is based on a percent of regular pay. Using the Special 1 and Special 2 fields will work. I will simply put in the hourly pay rate so I can use it in the formula.
A = IF(CARPENTRY <>0, CARPENTRY * EMP_SPECIAL1_NUMBER, 0). This multiplies the carpentry hours worked times the special1 number, which is the regular pay rate.

B = IF(OT_CARP <> 0, OT_CARP * EMP_SPECIAL1_NUMBER, 0). This multiplies overtime hours by the regular pay rate.

C = -(A + B) * .2394. This adds the regular rate carpentry pay and the overtime hours carpentry pay calculated at the regular rate and multiplies by the Workers Comp rate.

Variables D, E, and F would be for finish carpentry, G, H, and I would be for painting, etc.


10-26-2001, 07:33 PM

I assume that you pay on the total wages including the overtime. In that case you will need to add the time and a half multiplier into your formula.


Or you might simplify your table a little like:

"This formula calculates the workers comp amount and applies it to the workers comp payable account. In order for this formula to work correctly, the employee special number field must contain the pay rate of the employee and the variables must contain the workers comp rates."

"Carpentry Rate"
"Finish Carpentry Rate"
"Painting Rate"


"This formula now calculates three workers comp rates. Up to 10 workers comp rates can be created by using adding on to this formula."

That way it will be easy to edit the rates later. I am not sure why you need the logic for the zero amounts. I have been using a formula without that logic without trouble. I put the instructions right in my tax tables so that I remember what I did and what it takes to make them work later.

10-27-2001, 09:31 PM
I pay Workers Comp on total hours worked times the regular rate of pay. For overtime, I can either divide the total pay by 1.5, or multiply the hours by the regular rate.

I like your suggestions to simplify the calculations. I will remove the check for non-zero hours and use the example formula you gave.

Thank you for the help.


02-19-2003, 07:54 AM
I found the answer to my original post on another thread. Diane Koers, Co-Author of Peachtree 8 for Dummies, posted the following response to another question:

"Set up a bogus GL account. I usually use an account #9999. In GL Journal Entry, enter a debit to account 9999 for the cost amount and source it to a job. Next, enter a credit to account 9999, but DON'T source it to a job. This nets a $0 to GL, but debits the job."

It works like a charm. Doesn't affect the GL, but expenses show up on job cost reports. We will begin using this procedure for labor burden as well as posting the cost of using company-owned equipment to job cost, and any other misc expense that needs to show up on our reports!

02-19-2003, 04:47 PM
It's still unacceptable that Peachtree hasn't added in a markup function for job cost...we shouldn't have to be manually adding everything in!

I distribute the labor burden costs as ER calculations. I even pull some of these to create a union report in Crystal Reports.

This does not add the overhead into job cost, however. To solve that I created a Crystal Report for job costs that adds in the appropriate labor and material markups to create an accurate job cost report.

02-19-2003, 10:14 PM
Go to www.peachtree.com/enhance and put your request in. More customers ask for it the more likely they will put it in.

02-20-2003, 07:06 AM
I have requested enhancements in the past; if everyone who reads this labor burden posts would do so maybe we'd get some action!