Determining Related Costs for Margin Markup Calculations

This topic discusses how to determine margin and markup calculations for:

  • Fixed cost.

  • Workers' compensation cost.

  • Cost.

Determining Fixed Cost

The fixed cost depends on the fixed cost margin and pay rate. Fixed cost is the additional cost (overhead) that is incurred for every hour of employee pay, excluding workers' compensation.

Fixed cost = Pay Rate * (Fixed Cost Margin / 100)

Determining Workers' Compensation Cost

The workers' compensation cost is calculated based on the rate type selected on the Workers' Comp Rates page.

If the workers' compensation rate type = percentage, then 

Workers Compensation cost = Pay Rate * (Base Rate / 100) * Modifier

If the workers' compensation rate type = per hour, then 

Workers Compensation cost = 1 hour * (Base Rate)

Determining Cost

You must calculate the cost prior to determining the markup or margin. 

Cost = Pay Rate + Fixed Cost + Workers Compensation Cost

Related Topics