Cost rates assign a value to the time spent on tasks or services, reflecting the cost of an employee's or contractor's work.

In other words, they represent the costs that your agency pays to individual employees, such as their salary.

Besides the salary information, cost rates are essential in Productive for accurate time tracking, budgeting, scheduling, billing clients, and assessing project profitability.

Without defined user cost rates, time cannot be tracked against tasks, services, or deals, and people cannot be booked for services in Resourcing. The financial information you add to each employee's profile dictates how much their hour of work costs your company, which is also factored in when calculating your profitability.

It is essential to set up cost rates for any people who need to track time or be booked for services or deals in Resourcing, such as Employees and Contractors. You can set up cost rates for your placeholder users as well, to help you forecast their utilization and costs.

By default, only Admins can access and manage cost rates.

Using the Permission Builder, you can enable the "Add, edit, and delete cost rates" permission in a custom permission set and assign it to specific users.
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You will be prompted to set up a user's cost rate when inviting them to Productive, but if you skipped this, no worries, here's how to set everything up:

Alternating Cost Rates allow organizations to set up bi-weekly work schedules, ensuring accurate capacity, availability, and time-off calculations.

You can configure 40/32-hour alternating weeks or a 9-day fortnight, aligning cost rates with real work schedules. Learn more here.

Assign holiday calendars on a per-person basis for different holidays and non-working days based on the employee's location. This is especially useful for remote teams working from different countries.

The holiday calendar you choose will automatically mark bank holidays for this person in Resourcing, the Workload view, the user's Time tab, and the person will not be expected to work on those days, which affects their capacity.

For more information on capacity and availability, check out this article.

Overheads are additional costs per employee, such as equipment or office space. If you have overhead costs for an employee, leave the overhead checkbox checked.

This will add a fraction of your total overhead cost to each hour logged by the user.

For contractors who usually don't have overhead costs, you can uncheck this option.

After configuring default cost rates for your employees and contractors, you can further enhance financial tracking by defining custom cost rates for individual budgets or deals.

This feature, available in the Ultimate plan, allows for varying cost rates for different individuals within a specific budget, offering flexibility in monitoring overall costs.

Learn more about it here.

To ensure that all employees have their cost rates set up, check the Capacity column in the Time report.
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You'll find his report in the Report templates (navigate to the Reports tab and click + Report).

If the Capacity column shows zero hours, it indicates that the user's cost rates have not yet been defined.

The payroll report provides a detailed overview of your employees' cost rates, showing monthly rates, cost rate types, and start and end dates. To create a payroll report:

Check out this article to learn how to update a user's cost rate.