Go to Contacts and select an employee or a contractor from the list.
Select the Cost rate tab:
And click on the New button:
Choose between the following cost rate types: annual, monthly, bi-weekly, weekly or hourly cost. Put down an amount, select currency and define the amount of work hours per day.
You can set up a cost rate to start in the future, for example from next month. This is useful if you want to setup some sort of schedule.
For example, you can set up one cost rate to start today and end after three months, and another cost rate to start after three months.
Overheads are all the additional costs per employee besides their cost rate.
If you buy computers for your employees or rent an office space to have a place to work from, you have additional costs you need to factor in.
If you have overhead costs for this employee, leave the checkmark.
Contractors usually don't have overhead costs - maybe they work from home and have their own equipment?
In that case, when setting up a cost rate for a contractor or an employee without an overhead cost, you need to remove the overhead check-mark.
If you want to update or delete a cost rate, go to the list of cost rates, click on the "..." menu.