Salaries and wages are far from the only expenses involved in having employees. Depending on your location, other employee-related expenses may include:
- Payroll taxes
- Worker's compensation insurance
- Health insurance
- Other benefits you might plan to cover for your employees
These expenses need to be reflected in your financial projections, but it's not necessary to try to predict them in precise detail.
Instead, financial forecasts typically use what's called a "burden rate." This is just a simple percentage of your total salaries, calculated into your forecast to cover these related expenses. In the LivePlan Profit and Loss statement, you'll see the calculated amount on the "Employee Related Expenses" line.
Note: the burden rate only applies to regular employees; not to contract workers.
LivePlan has a default burden rate of 20%, and you can adjust that to meet your needs.
To change the burden rate:
- Click the Change Burden Rate button:
- Adjust the rate (%) in the overlay:
- Click Save & Close. The rate you entered will be applied to all on-staff hires in your personnel plan.