It is not a new thing, calculating the cost of your new hire labourer, or employee. A business owner needs to note that wages are merely the base cost for hiring your employee. Every employee that you hire has a cost, this cost isn’t something you should avoid knowing, but very important for you to track and understand whether the pay you’ve spent on them is worth it or not? Like all the other features that QuickBooks has to offer you, there are ample additional features and great benefits that an employer slowly but steadily discovers.
One of which is the employee cost calculator. Nothing new, but yes, a good new feature by QuickBooks allowing its user to make the most out of it. There are ample calculators available in the software, but being a business owner, you must be aware of it all. Not just aware, but also capable enough to use it well.
Labor Cost Calculator: How it Helps?
Business owners earlier using QuickBooks have got great advantages and benefits from it. The built-in costing features have made life easier, such as assigning the payroll, tax deduction, accounting, and financial reporting, etc. But back then the major flaw was weak employee cost calculation. Now, with the employee cost calculator, there is a lot of things that can be done.
If you put in high-quality data in your QuickBooks, you are likely to get accurate output out of it. When you get accurate reporting, you are in a position to make tighter and effective pricing decisions.
Therefore, this software is design to help you effectively calculate the cost of direct labour payroll, subcontractor cost, material cost, payroll taxes, etc. However, if you are unable to perform some external calculation, you can be able to make a proper job cost element out of it. The significant and most important cost component that an accountant considers as a key priority is ‘Labor burden cost’
How much Does Employee Cost? | QuickBooks Services
Each employee costs the sum of their gross wages. This is more or less in addition to the other employee-related expenses which include social security, payroll taxes, and even Medicaid, cost of benefits like insurance, meals, supplies, etc.
What an Employee Cost Calculator in QuickBooks involves?
The most business owner doesn’t truly understand the importance of cost specific breakdown until they are having a tough time later! The more detailed, accurate the cost report is, the better and accurate the future estimated cost would be. Many business owners aren’t aware to consider employee labour costs, but it is a thing to have and to calculate without fail!
In addition to payroll, payroll taxes, QuickBooks hub can also automatically assign the labour burden costs like:
- Paid leaves
- Other benefits like worker compensation, retirement benefits, bonuses, and even health insurance, etc.
- Other training, support supervisory costs are added too
- Other costs that occur randomly are also included
- Small tools, the vehicle used, equipment use, facility cost is also considered.
What Employee Cost Calculator talk about an employee?
After you have used the calculator to compute the further burden cost of the employees, there are ample things you will be able to explore the employee cost that will go beyond the compensation.
- What are health benefits, insurance, retirement, and other cost benefiting your employees?
- What overtime affects an employee and the cost too?
- Is it good to extend work hours for an employee or rather hire a new employee or outsource?
How to calculate?
- First and foremost, you need to fill in the compensation information of your employee. Learn if they are paid hourly, or salaried basis. Accordingly, fill in the information of employee’s hourly rate or hours per week.
- Moving on, you can fix the tax information. This is done by selecting the state first, as the taxes vary state-wise. This will help you accurately calculate your costs.
- Once done, you need to move ahead by filling in the benefits information. Answer id you are contributing to your employee retirement plan? Or do you offer any other insurance benefits like health, vision, dental, etc?
- Also, if you are offering other perks like health savings, bonus, profit sharing, vacation, paid leaves, sick leaves, maternity, etc.
- QuickBooks allows you to fill in all the information in detail. Resulting in a proper, systematic, and accurate calculation of employee cost! Payroll calculation and taxes are pretty tough and complicated, However, if you do it properly, and with accuracy through QuickBooks, you won’t have to suffer at all!
The employee cost calculator is an asset to the business as a feature provided in QuickBooks. You will not just have a clear insight into your employee cost. But it will also help you make a better decision regarding salary benefit, new hiring, timing, etc. of another employee.