

























PRODUCTS
Payroll Suite
HR Suite
Talent Suite
Project Services SuiteMeet the platform tailored to your business
Core system of record
One platform for the entire employee journey
BY INDUSTRY
BY COMPANY SIZE
LEARN
EXPLORE KEKA
Total Labour Cost is also known as labour cost. It is the total expenditure spent on labour in a business. It is the most significant operational cost to hire and manage resources. The cost includes salary, bonuses, payroll taxes, training, and any other kind of expense incurred in the labour division. The total labour cost is divided into direct and indirect costs. The direct cost or expenses include the salary or wages of employees that produce the product, and indirect cost is the cost that is related to labourers who support the production; those who maintain factory equipment and machinery.
The generic formula to calculate labour cost is;
Total Labour Cost = (Labour % * Total sales) / Average hourly rate of labour
TRENDING TERMS
Subscribe to keep up with the latest strategic finance content.
Request a demo