Issue/Symptom/Question

When a Standard Charge rate schedule is set up at the Job Type/Pay Rate level, how should the Direct Burden or OH Distribution rules be set up?

Applies To

PENTA for Windows

Project Management > Job/Job Standard Charge Schedules/Job Type Pay Rate/Standard Charge Schedule

Payroll > Setup/Taxes/Direct Burden Distribution

System Management > System Rules/Overhead Distribution Rule Information

Resolution/Fix/Answer

Determining how to set up the 3 methods of applying payroll burden, general overhead, and miscellaneous costs to jobs, depend on which of them are utilized, and from which module they are applied.

- The Job Type Pay Rate/Standard Charge Schedule allows you to set up and maintain hourly pay rates, standard charge rates, and standard charge markup percentages for work performed on a specific Job Type.
  Any payroll hours entered for employees within the Payroll Class and/or Pay Rate assigned, charged to a job within the job type entered will be calculated using the standard charge rate (if entered) or pay rate indicated.
  Note: PENTA selects which rates to use from the following schedules during payroll processing according to Penta's pay rate selection hierarchy, which is:
  - - Rates entered/overridden in the Timecard Entry window.
    - Rates at the Job/Employee/Cost Type/Costcode level (Job/CT/CC Pay Rate/Charge Schedule).
    - Rates at the Job/Employee level (Job Employee Pay Rate/Charge Schedule).
    - Rates at the Job/Payroll Class and Ray Rate level (Job Pay Rate/Standard Charge Schedule).
    - Rates at the Job Type/Payroll Class and Pay Rate level (Job Type Pay Rate/Standard Charge Schedule).
    - Rates from the Pay Rate standard charge schedule assigned to the job.
    - Rates entered/overridden at the Employee level.
    - Rates entered at the Payroll Class and Pay Rate level.

The “Direct Burden” approach charges the actual calculated payroll employer paid tax costs to jobs, fixed assets, accounts, and work orders as you incur them, based on the Pay Group or Legal Entity OU specified.
This approach usually results in several charges early in the year and few later, because many taxes are levied only up to a certain wage amount which the employee reaches before the year ends.

The Overhead Distribution Rule Information window establishes parameters for calculating and distributing overhead expenses to jobs, accounts, fixed assets, and work orders with specific 'From' and 'To' parameters.
Use the Overhead Distribution procedure for overhead charges you are not handling through the direct burden charging procedures or through Standard Charge rates set up in Payroll.

You can use any combination of these overhead applications, or all 3. The amounts you assign to any of them will depend on how you have the others configured, and which portions of the entire overhead burden is assigned to each method.
If you utilize the Direct Burden charges, any Overhead Distribution hourly rates or percent of gross amounts entered would exclude those amounts included in the Direct Burden setup.
Any burden included in the Job specific Pay Rates (or Standard Charges) would be excluded by either of the other methods used, when more than one of the three are implemented.
When you use any combination of these three burden calculations, you will need to make certain that the burden included on one is not duplicated on another.

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