The cost of labor and its determination, the outputs are used to plan business and management costs of business as a whole. In each paycheck, you can see the cost of the worker, which are essentially the result of a series of elements: salary, taxes, insurance (POS), pension etc.. The calculation of this expense, is to assess the fixed costs of personnel management, to do this we generally use three different methods and appropriate management programs. Let’s see how to calculate the cost of the worker.

Every employer or company needs to establish the cost of their own activity. Will then need to determine the various costs, including those of employees. To calculate them we may draw three ways: 1) “Forecast cost” 2) “Development of the gross and the net”, and finally 3) “processing cost” assessed on a daily, weekly, monthly and yearly, by virtue time observed, the duties performed and the contract of employment. In some cases, you will be able to carry out assessments on an hourly basis.

Time to work, clock-face and money background

The processing cost, which is the third item above, takes into account first, the law of classification of the employee, the duties performed, and any qualifications. Need to plan the costs of management of the different departments, through a detailed analysis of the individual items present contractual payroll, allowing you to quantify the actual cost of each individual employee and the department itself.

The forecast of the cost instead, it takes as the reference period for the evaluation of these data, the entire calendar year. Is a precise instrument and fast enough to calculate costs and processed for projections of future management, allowing you to apply the changes useful for productivity.

Finally, the development of gross and net, is used to assess the costs of management, from two different points of view: the gross paycheck, and equity. You’ll learn the net amount each month and throughout the year, is perceived by the employer and, in parallel, the actual costs of the employee for what concerns the employer, be it a small or large company. The cost of labor, can be very precisely by adopting tools that take into account other parameters “extra paycheck” production bonuses, telephone costs, consulting, occasional jobs. For business purposes, the calculation of costs and schedule of the same, together with the notional income, are used to manage the business in a profitable way.