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Understanding Labor Rates

This article explains how labor rates and posting labor costs works in ResourceFirst.


ResourceFirst allows for establishing default labor rates by cost category, as well as rate overrides at the resource and assignment levels.

Defining Rates by Cost Category

Labor Rate Cost Categories are defined in Administration->Lists->Cost Categories. Below is an example of cost categories and their associated cost and billing rates.


Note that by default, rates are defined as monthly rates. If hourly rates are desired, contact your PDWare administrator (an "R" appended to your license key will switch the rates to hourly).

Rate Hierarchy

In addition to the default Cost Category definitions in Administration (which is referenced in the Resources table as a column/field), the Resources table and Assignments table includes Cost Rate and Bill Rate override fields, to override the rate at the resource or assignment level, respectively.

Additionally, rates can be defined at the Skill level via the Administration->Lists->Skills page for use with Skill assignments (and as a default rate if no other rates have been defined).

There is also a Rate Matrix in the Portfolio Desktop tool, accessible via the Edit Rates function, which can provide time-phased rates.

The hierarchy is as follows:

  • Assignment rates override Resource Rates
  • Resource Rates override Cost Category rates, as well as the Rate Matrix from Portfolio Desktop.
  • If no Resource or Cost Category Rates have been defined, then the Skill rate for the Assignment's skill will be used.
  • Skill rates are also used for Skill assignments in calculating labor cost of those assignments.

Posting Labor Cost

On the Financials page in the project workspace of a project, there is a Post Labor Cost button in the upper left (see screenshot below). This will post the labor forecast cost to the "labor" financial item. (Note: the ResourceFirst system does not offer posting labor actuals at this time, though this feature IS available on the Portfolio Desktop tool, and can be automated upon request). 


The way the labor cost is calculated is as follows:

If you have a monthly rate, let’s say $10,000/month: The calculation simply takes the monthly rate and multiplies by the monthly FTE demand.  So if you were forecasted .75/month on a project, the labor cost would calculate to $7,500 per month or $90,000/year.

For more on posting labor costs, see  Project Financials.

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