How to set up worker on-costs and see gross margin on direct client jobs

A charge rate and a pay rate only tell you part of the story. Once you add employer NI, pension and holiday pay, a job that looks profitable can lose money.

You can now add each worker's on-costs and see the gross margin of every direct client job: what's left from the charge rate after the worker's pay and their on-costs. It shows per hour and per shift, in green for a profit and red for a loss, before you select a worker, and in your Shift Profitability report.

Before you begin

• Direct client jobs are part of Agency Accelerator Pro. CareHires jobs keep today's profit and loss view.
• You need permission to edit the Cost Configuration to add or change on-costs. Users without permission to see amounts see them hidden.
• The worker needs a cost configuration as well as on-costs. On-costs on their own don't show anything in Manage Workers.
• Have each worker's on-cost percentages to hand, such as the employer NI, pension and holiday pay rates you use.

How gross margin is worked out

Gross margin = the charge rate (excluding VAT) − the worker's pay − the worker's on-costs.

An example: the charge rate is £20.00 an hour (excluding VAT) and the worker is paid £15.00 an hour. Their on-costs are 30.07% of gross pay: employer NI 15%, pension 3% and holiday pay 12.07%.

Over an 8 hour shift, that's a gross margin of £3.92.

Please note: Gross margin is an estimate. Employer NI and pension depend on thresholds for each pay period, so the real figure can differ slightly. Use it to compare jobs and workers.

Adding a worker's on-costs

You can open a worker's on-costs from any of these places:

• Employees › Cost Configuration, using the settings button on the worker's row.
• The worker's summary.
• The Cost step of the worker's profile.

Then:

1. The Worker On-Costs drawer opens read only. Press Update to edit it.
2. Add an on-cost: give it a name and a percentage of gross pay. Suggestions include Employer NI, Employer pension, Holiday pay, Apprenticeship levy and Employer's liability insurance, or type your own name.
3. Add as many on-costs as the worker needs.
4. Save.

Changes save straight away, with no approval step. The same percentages apply to every rate type for that worker.

Tip: Umbrella Company and PSC workers show a reminder that agencies don't usually have on-costs for them. You can still add on-costs if you do.

Seeing gross margin when you choose a worker

1. Open a direct client job and go to Manage Workers.
2. On the Eligible, Suggested or Selected tab, find the worker.
3. Press View Calculation.

You'll see the charge rate, the worker's pay, each of their on-costs and the gross margin per hour and per shift, in green for a profit and red for a loss.

When on-costs are used, the worker card's Profit/Loss line carries an incl. on-costs tag and is worked out from the gross margin per shift.

Tip: Sleep-in and combined jobs show the gross margin for each part of the shift and a combined total.

Seeing gross margin in the Shift Profitability report

The Shift Profitability report now includes:

• On-costs, Gross margin, Gross margin % and Gross margin per hour columns.
• New tiles, including Loss-making shifts.
• An on-costs band on the chart.
• The new columns in the CSV export.

Workers with no on-costs show Not set. Click an on-costs value to see that worker's on-costs for the shift.

Please note: The report uses each worker's current on-costs for every shift shown, including past shifts.

Who sees on-costs and gross margin

Only your agency's users who are allowed to see amounts. Workers and clients never see on-costs or gross margin. Each worker's on-costs are included in payroll.

If something looks wrong

• View Calculation shows "Go to Setup". The worker has no cost configuration yet. Set it up first, then add their on-costs.
• You see "Configure on-costs" instead of gross margin. The worker has a cost configuration but no on-costs. Add them from the link.
• A margin looks too low. Check the worker's on-cost percentages and their pay rate before changing the charge rate. A typing slip in a percentage is the most common cause.

If you still need help, contact our Support Team.