How to track employees' hourly rates its impact

In this article you will learn how to find the ideal hourly rate for your employees

1. What is value per hour

The value per hour is used to define the cost of labor for each hour of the employees' time. This value is the basis for your agency to know the internal cost, both pieces and projects. This value will be used in conjunction with the timesheet.

2. How to calculate the value per hour?

In order to have a real internal cost basis, the value per hour must be as accurate as possible. For this reason, this amount needs to be based on the employee's salary, divided by the number of hours worked in the month. You also need to perform an apportionment of the agency's structure cost (fixed expenses).

Just to be clear, here is an example.

John earns US$ 2,500.00 per month and has a workday of 220 hours per month. The agency has 10 employees and has a structure cost of US$ 10,000.00 per month.

To know the amount per hour referring to the salary just make the following calculation:

2,500.00 ÷ 220 = 11.36

Structure cost: US$ 10,000.00

Number of employees in the agency: 10

10,000.00 ÷ 10 = 1,000.00

Apportion the structural cost in the same way as the salary:

1,000.00 ÷ 220 = 4.54

The hourly value per work of the employee John will be US$ 15.90 (US$ 11.36 + 4.54)

After that, just enter the value in the employee's settings (Settings > Team Members > Salary / Comissions)


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