Q- "I need to have the job cost show up in the labor and/or job cost journal at the agreed upon rate."

A - This depends on what you really mean.  Do you want the Cost of the Allocation to show up as a separate job cost in the job cost record or as the "Cost" Cell of the Job Cost Record?  Also, the Rate will not be apparent as the Allocation is rolled up in the Cost on top of the Wages and Taxes;  In the Job Costs Records the Allocation is HIDDEN, in the General Ledger it shows up wherever you assign the Payroll Calcs to Credit.

Q- "Does anyone out there use standard labor burden rates?  If so, how did you get the payroll calculation give you the desired result."

A- I can help you with this.  "Standard Labor Burden" =(Indirect Costs)/ (#Units of Cost Driver) taken from historical data. "Standard" means not actual, but estimated cost for the purposes of consistent allocation to jobs based on the most realistic cost driver for the Cost being allocated. This is imperfect because to choose only one cost driver, you will inevitably have to use it for Indirect Costs that are actually driven by more complex calculations that the Allocation Rate will allow.  The good news is that you can use multiple Allocation Rates with Multiple Payroll Calcs- as you mentioned in your Background.

We use Sage Payroll Calculator to allocate Standard Indirect Overhead Costs per Direct Labor Hour for each job using Employer-Cost Payroll Calculations.   The Benefit is that the Standard Rate(s) are applied to every Job as type-2 "Labor" Job Cost on every Payroll Posting at the agreed upon Allocation Rate.  The accounting for the Standard vs Actual costs (variance) is handled in Control accounts on either the Balance Sheet or P&L; and requires one or more Adjusting Entries to complete, but its easy nonetheless.

There is one little detail about using this Job-Costing Method that may help address the imperfections you are talking about.  Hint:  Payroll Calculations are applied to ALL Regular Hours, billable & non-billable.  If your Standard Cost allocations are calculated based on Direct Labor Hours (as they should be in my opinion), then the Payroll Calc creates an "unintended" Cost for the Standard Allocation applied on non-billable hours - Due to the "Calc Type" limitations [Sage would do good to add a payroll calc type: Employer Cost on Job Labor Hours ONLY]

There is a lot to discuss with this because it all ties in with your Estimating, Ordering and Scheduling system, not to mention how your GL is configured and how the Owners/ Clients want to see the Reports.

However, In spite of the underlying complexity, I assure you it does work, its a fantastic idea because it is conceptually simple, and scales effortlessly no matter how many Jobs you have going at a time.  Cheers to you for thinking about it because it eliminates the manual periodic "peanut-butter" standard cost allocations that are typically based on % of $/Revenue.

Call me with questions.

S100 Construction + Estimating

Residential Construction

Sage Construction Anywhere

Joe, I need the established rate to show up in the job costs journal as the job cost.  To be more clear I will use a short hypothetical example.  Assume the established rate for your project manager was $50 and his salary comes out to a rate of $30 per hour. Forgetting for now all the other employer related costs that go into making up the actual job cost, I need the rate to show up in the job cost journal at the $50 per hour or fraction there of (1/2 hour would show $25). I understand standard cost and only mentioned that because the concept is similar. In your answer(specifically your second paragraph), you mention Sage payroll calculator.  I assume you are referring to the payroll calculation the  system uses  to determine job costs etc. Do you use a specific payroll calculation to achieve the desired rate? I have, in a test company, put in a payroll calculation that along with the normal calculations will bring the rate up close to  the desired standard rate but have not been able to hit it right on the money all the time. if someone logs in more than 40 hours in a week, that will throw off the calculation.It just may be the best this system can do. Thank you for your help. Richard

Hi Rich,

Do you guys do Progress Billing or T&M Billing?  

If you use T&M Billing, then the Billable Rate is set up in the T&M Wage Rates 3-10-5.  Assign a $50 for each Laborer, or you could look into using PayGroups for different profiles of Wage Rates depending on the job.  Then calc your labor records and Create the T&M Invoice.

If you use Progress Billing & and Job-Cost Reports (like Progress Billing Summary by Cost Code or Division), then the Allocations (hidden markup) are rolled up into the Cost Amount in 6-3 Job Cost Records.  

The Cost Amount will never be exactly $50 per hour because the Actual Calculated Payroll Cost is Sourced from the GL Link.  Also, because tax withholding is different for each payee.  The only way to adjust the Bill Rate within the Job Cost Journal is to go to the specific job cost and click the Time & Materials Billing tab and Override the Billing Amount.

I think I understand your problem, and I think the simplest answer will depend on how you bill... each job cost record defaults the "Billing Amount" to the "Cost Amount."   You can change the "Billing Amount" in each Job Cost Record, or you can Change the "Cost Amount" by using a Payroll Calculation - which will not ever be a pre-set Bill Rate.  The whole idea of the "Cost Amount" being the Actual Cost," is so that the system can calculate the difference between the Cost and the "Billing Amounts" to determine Real gross profit.

If my understanding is correct, the solution to your query I think lies in the T&M Wage Rates Table 3-10-5.

If you are Progress Billing using % Complete Calculation Method and you want Labor Totals to calc on Billable Rate instead of Actual Cost, then I would be curious to know why you are Progress Billing at all...

Hopefully this is helpful... let me know!