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Select Job Cost Setup menu > Burden Rate Maintenance.
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The true cost of a job consists of direct costs (such as material, labor, and subcontract) that can be directly associated with a job, plus a portion of indirect costs that are difficult to allocate to a specific job. Burden is the indirect cost associated with labor expenses, such as union contributions and employer's taxes. The system allows you to calculate and allocate indirect costs based on the direct costs posted to a job. Different burden rates can be specified for each job type.
Use Burden Rate Maintenance to establish burden rates for each job type. When payroll postings are made to a job, burden rates are used to calculate the associated indirect costs (employer's taxes, union expenses, etc.), in addition to direct wages. Burden rates can be calculated as either a percentage of the gross wages per employee or a dollar amount per hour per job.
Burden rates established in the Job Cost module are used to calculate burden for jobs, unless burden rates are established in Payroll Labor Code Maintenance. The rates specified in the Payroll module override the burden rates defined in Job Cost; however, burden rate information for a job type must be defined in Job Cost using Burden Rate Maintenance before any burden can be calculated for a job.
Calculated burden can be charged to a specific cost code and cost type and to appropriate general ledger accounts. If you do not enter burden or overhead rates, no automatic calculation is made. Use Job Posting Entry to post manually calculated burden and/or overhead amounts.
To post the burden amount to the same cost code and cost type as the cost code used to post the labor cost, enter all asterisks (***-**-***) in the Burden Cost Code field and select Labor in the Burden Cost Type field.
Note Only the rates from Burden Rate Maintenance are used to calculate burden for estimates.
Click Delete to remove the burden rate and all related information from the file. Click the Printer button to print a Burden Rate Listing.
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