Overhead Distribution Rule Information

Owned by Kyle Niekamp
11 19, 2018

Issue/Symptom/Question

What are overhead distribution rules in PENTA?

Applies To

System Management > System Rules > Overhead Distribution Rule Information

Resolution/Fix/Answer

Use the Overhead Distribution Rule Information window to establish parameters for distributing overhead expenses to jobs, accounts, fixed assets, and work orders. Use the Overhead Distribution procedure for overhead charges you are not handling through the direct burden charging procedures in Payroll.

Set up one overhead distribution rule for each type of overhead expense you want to distribute. You define rules based on one of the following charge methods:

  1. Based on charges made FROM any of the following sources:
    • Payroll Class (or group of payroll classes using a mask, or all payroll classes)
    • Asset Class (or group of asset classes using a mask, or all asset classes)
    • OU (or group of OUs using a mask, or all OUs).

            Also, specify whether these FROM overhead distributions should occur for inter-OU charges and whether the distribution should only occur if the charges originate from jobs, or accounts, or fixed assets, or work orders.

       2. Based on charges made TO any of the following:

    • OU
    • Asset Expense Category
    • WO Service Type
    • Job Type
    • Job
    • Cost Type
    • State (labor transactions only)
    • Costcode Mask
    • GL Account

       3. Based on both the other methods (FROM and TO).


To carry out the distribution, you can have PENTA calculate the charges as a percent of the cost basis, a dollar amount per transaction, or (for labor and asset usage-based distributions) as an amount per hour—or any combination of all three. You can add the distributions to the costs as you charge them in PENTA, or you can have PENTA allocate them as follows:

    • For distributions to Jobs, you can specify the Cost Type and Costcode Mask you want the distribution charged to.
    • For distributions to Work Orders, you can specify the Cost Type you want the distribution charged to.
    • For distributions to Assets, you can specify the Expense Category you want charged.
    • For distributions to Accounts, you can specify a general ledger account you want the distribution charged to.


A single charge may be subject to multiple overhead distribution rules. For example, if you define a rule to add 3% to all labor charges to cover SUI and you define another rule to add 1% to the labor charges for employees in one payroll class in order to cover tool costs, PENTA will add 4% to the labor charge when conditions for applying both distribution rules are met.


In addition, PENTA applies “To” rules on top of “From” overhead distributions. The process works as follows:

    • Assume you have two rules: A “From” rule adding 3% to labor charges to cover SUT, and a “To” rule adding 2% to all charges to Job Type L jobs to cover administrative services.
    • If a charge meets the criteria for both rules (e.g., a $100 labor charge on a type L job), PENTA applies the overhead distribution as follows:
      ($100 * 1.03) * 1.02 = $105.06.