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Labor Cost of Salaried Employees

Posted on by Microsoft Employee

For salaried employees is it possible to normalize hours over a pay period to accurately get the cost of labor for projects worked during that period?

For example if an employee worked 100 hours in a pay period of that time, 20 hours on project A and 80 hours on project B. The cost would not be hourly wages x hours worked but 20/100 * biweekly salary and 80/100 * biweekly salary. 



  • Labor Cost of Salaried Employees
    I know this is an old post but don't see this addressed anywhere.  Do we know why the project cost allocation is different than actual (payroll)?  Other project accounting systems compensate for Salary costs by allocating the salary cost of an individual accross the total hours reporting for a period.  The current D365 treatment seems backwards by ignoring Salary OT treatment.  In professional services companies, OT is not only common but part of the business model.
  • Suggested answer
    MarkB45 Profile Picture
    MarkB45 755 on at
    RE: Labor Cost of Salaried Employees

    Hi Jsm,

    Juan is correct and the same logic actually applies in F&O. The HR payroll is completely separate from the charging of hours to a project.

    You could of course not use any time recording of hours against projects and just post the payroll/labour costs in a journal to the projects but that presents you with the issue of knowing what projects to charge against as the users are not specifying any projects they are working on.

    THe normal set up in F&O is the following:

    Post the timesheets or Post hour journals

    Dr - Project    

    Cr - Payroll allocation (Balance sheet account)

    Posting Payroll journal.

    Dr - Payroll allocation for direct project amounts

    Dr - P&L for other labour costs

    Cr - Bank

    You then need to reconcile the payroll allocation account as part o f the M/End process.

    Hope that helps on the ERP side.



  • Suggested answer
    Juan Simon Profile Picture
    Juan Simon 996 on at
    RE: Labor Cost of Salaried Employees


    Project Operations is “Project” centric, and it will collect all costs and profit down by the hour/task/project. You could try filtering reports inside Dynamics or a solution to achieve that, but your ask seems more of what would be done by an ERP or HR application integrated with ProjOps. I believe MS is offering that and will more features with F&O and Dynamics Human Resources.

    Antti Any comments?


    Please mark my answer as verified if you found it helpful. This way the community can see there is a valid answer to the thread's topic.

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