Every hour someone tracks or is scheduled for is costed at their hourly cost. If that number looks wrong, so will your budget costs. Here's how Productive works it out, and why it can differ from what you get by dividing the salary yourself.
đ To add a cost rate first, see Setting Up Cost Rates.
How Hourly Cost Is Calculated
Productive divides the salary by the working hours in the period it covers. Public holidays and non-working days don't count as working hours, so the result reflects the hours someone is expected to work.
For example, a $60,000 yearly salary with 2,064 working hours in the year comes out to $29.07 an hour.
This applies to weekly, bi-weekly, monthly, and annual cost rates. The period Productive uses depends on the type:
Cost rate type | Hourly cost is based on |
Weekly | Working hours in the full calendar week (Mon to Sun) |
Bi-weekly | Working hours in the full 2-week block |
Monthly | Working hours in the full calendar month |
Annual | Working hours in the full calendar year |
đ Productive always uses the full period, even if a cost rate starts partway through it.
Why the Capacity on the Cost Rate Screen Looks Different
The capacity on the cost rate screen counts only the hours from the rate's start date to the end of the period. It's shown for reference, and Productive doesn't use it to calculate hourly cost.
Productive uses the full period instead. Otherwise a rate that starts late in the period would give a misleadingly high hourly cost. If a $60,000 annual salary starts on December 15, only about 30 hours are left in the year, which would work out to $2,000 an hour.
Example: A $60,000 annual salary starts on April 1. The cost rate screen shows 1,552 hours of capacity, from April to the end of the year. You might expect:
$60,000 á 1,552 h = $38.66 an hour
But Productive uses the capacity of the whole calendar year, 2,064 hours:
$60,000 á 2,064 h = $29.07 an hour
Hourly Cost in the Graph vs. Current Hourly Cost
The hourly cost in the graph can differ slightly from Current Hourly Cost next to it. The graph shows an average based on a simplified year of 48 working weeks (4 weeks per month). Current Hourly Cost is the exact figure Productive uses in all cost calculations, including time entries.
Why Hourly Cost Doesn't Change During Time Off
Taking a vacation or other time off doesn't raise someone's hourly cost. Productive calculates it from capacity, and time off reduces availability, not capacity.
Example: An employee earns $60,000 a year and has 2,064 hours of capacity. Their hourly cost is $60,000 á 2,064 h = $29.07 an hour. If they take three weeks of vacation, it stays $29.07 an hour.
Viewing Hourly Cost Changes
Hourly cost can change from one period to the next, because the number of working hours changes, for example in a month with more public holidays. To see how it has changed:
Go to the person's profile in Resourcing > Employees.
Open the Cost Rates tab.
Open the expandable table to see their hourly cost over time.
