The Labor Cost Definition settings allow you to control exactly how employee labor costs are calculated in the Financial Workspace. In this article, you’ll learn where to find these settings, how to configure cost concepts, and how to ensure your reports reflect accurate, transparent cost data.
Overview
The Labor Cost Definition brings all rules that influence labor cost calculations into one central location. This improves clarity, prevents calculation errors, and ensures that Finance teams can fully understand how payroll and expense data translate into cost metrics.
Use this functionality when you want full visibility and control over the payroll concepts included in employee labor cost, avoid double counting, or align reporting with your internal accounting practices.
How to use
- Open the main sidebar and navigate to Finance
- Select Workspace
- On the upper right corner, click Settings
- This new section consolidates all configuration rules that impact cost calculation in the Financial Workspace.
- You will see the Labor Cost section.
- Access the dedicated page where you can manage which payroll concepts contribute to labor cost.
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Choose the payroll concepts to include
- Select a single concept or combine multiple concepts
- You can remove any items that should not feed into labor cost
If labor cost totals look higher than expected, check if reimbursements or pass-through items were included accidentally and confirm that concepts appearing in both payroll and expenses aren’t selected twice.
If changes don’t reflect in FW immediately, refresh the Financial Workspace and ensure you clicked “Save” before leaving the settings page.
Tips and best practices
- Review concept selection regularly—especially after payroll updates or new concept creation.
- Check for reimbursements inside payroll to ensure they aren’t counted twice in both payroll and expenses.
- Document your internal rules so HR and Finance teams stay aligned on how labor costs should be interpreted.
- Test the impact by comparing costs before and after changes in a sample period.
FAQ
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Do I need to migrate old cost setups?
No migration is needed. All customers have access to the new settings immediately.
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Can I create new payroll concepts from here?
Not at the moment. Concepts must be created in Payroll settings, and then you can select them in the Labor Cost Definition.
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Will these settings affect historical data?
Changes apply to how costs are calculated moving forward. Historical calculations may remain unchanged unless specified by future updates.
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Can multiple admins edit these settings?
Yes, but we recommend aligning internally to avoid inconsistent configurations.