The formulas used in the labor cost calculation are:
Gross Hours per Year: \[ \text{Gross Hours per Year} = \text{Gross Hours per Week} \times 52 \]
Gross Pay: \[ \text{Gross Pay} = \text{Pay Rate} \times \text{Gross Hours per Year} \]
Net Hours Worked: \[ \text{Net Hours Worked} = \text{Gross Hours} - \text{Hours Not Worked} \]
Annual Payroll Labor Cost: \[ \text{Annual Payroll Labor Cost} = \text{Gross Pay} + \text{Other Annual Costs} \]
Actual Hourly Labor Cost: \[ \text{Actual Hourly Labor Cost} = \frac{\text{Annual Payroll Labor Cost}}{\text{Net Hours Worked}} \]
Labor Cost Percentage: \[ \text{Labor Cost Percentage} = \frac{\text{Annual Payroll Labor Cost}}{\text{Total Revenue}} \times 100 \]
This calculator helps estimate the labor cost by considering various factors like pay rate, absent days, additional costs, and total revenue. It calculates the gross pay, net hours worked, annual payroll labor cost, actual hourly labor cost, and labor cost percentage.
Let's consider an employee with the following data:
Step-by-step calculation:
Gross Hours per Year: \[ 40 \times 52 = 2,080 \text{ hours} \]
Gross Pay: \[ 2,080 \times 10 = \$20,800 \]
Hours Not Worked: \[ 15 \times 8 = 120 \text{ hours} \]
Net Hours Worked: \[ 2,080 - 120 = 1,960 \text{ hours} \]
Annual Payroll Labor Cost: \[ 20,800 + 3,900 = \$24,700 \]
Actual Hourly Labor Cost: \[ \frac{24,700}{1,960} = \$12.60 \]
Labor Cost Percentage: \[ \frac{24,700}{80,000} \times 100 = 30.9\% \]