Find what a technician hour really costs

Labor cost per billable hour, in the Money group of Reports, answers a pricing question once a year: what does an hour of technician time really cost, once you count the time off, the payroll taxes, the insurance, the trucks and the phones, and spread it over the hours a customer actually pays for? It is read-only. It never posts anything and never changes the rate your books use; changing that rate stays a separate edit on each employee’s profile.

Before you start

The report is for people who manage HR profiles, because it shows pay. It reads your connected QuickBooks company for payroll taxes, benefits, vehicles and phones; without the connection those lines read as not available. Which accounts feed each line is set once for your company by your Florio contact.

Read the worksheet

1. Open Reports, then Labor cost per billable hour.
2. Pick the window: Trailing 12 months, last year, or this year to date. Select Refresh from QuickBooks to read the latest figures.
3. Read the four stats across the top:
   • Suggested burden, from the build-up below, next to the burden your books use.
   • Billable share: customer hours divided by hours worked.
   • Cost per billable hour: the team average, before office overhead.
   • Service bill rate, with how far it sits above (or below) that cost.

The burden build-up

The Burden build-up card turns your policies and your books into one percentage you can compare with the burden your employee profiles carry:

• Paid time off from the days you type in: Vacation days, Sick days and Paid holidays, measured against the days a person actually works.
• Payroll taxes and processing and Health insurance and IRA match, each divided by gross wages, and owed on time-off pay too.
• Workers’ comp, from the Workers’ comp premium you type in from the insurer’s bill, divided by field payroll.

The footer is the Suggested burden. When it lands within half a point of the rate your books use, it says Within half a point; otherwise it says how many points off it is, which is your cue to review the rate with your accountant.

Field costs per hour

Trucks, fuel cards and phones are real costs of putting a technician on site, but they stay out of job cost for now. This card counts them for pricing: vehicle costs from your books, the Fleet insurance premium you type in, and your company’s share of telephone costs that belongs to technicians’ phones. Each yearly cost is spread over the hours your technicians worked.

By person

By person lists each technician with customer hours in the window: their pay, Hours worked, Customer hours, Other hours and Billable share, then three rates:

• Book rate: pay plus the burden their profile carries. A salaried person’s pay is turned into an hourly equivalent first.
• Plus field costs: the book rate plus the field costs per hour.
• Per billable hour: that cost divided by their billable share. This is the number to price against.

The Team row weights each person by the hours they worked.

Good to know

• Hours worked leave out time off.
• Imported hours from your previous system count, so the first year reads a full year.
• The days and premiums you type in save for your whole company.