Basis Payroll calculation is mandatory.
Allocation of labor cost table.
- Labor cost and allocation results tables.
- Allocate by time cards (Check how time card date and project cost allocation dates are linked).
- Remaining budget amount columns in the allocation results.
- Recognized by the time card table. (used to reverse expenses accrued by time cards if they happened in the same period).
Allocation of labor cost means distributing an employee’s salary (or total payroll cost) across different projects and departments based on how their time was spent.
How to create
To access Project Costs Allocation, go to Project costing → Project Costing documents → Project costs AllocationAllocations
Main tab
This tab is used to enter the key details for labor cost allocation, including the date, document number, entity, and the payroll document that will act as the basis.
- Transaction Type - Select the relevant type, such as Labor Cost Allocation.
- Entity - Choose the entity responsible for the costs.
- Basis - Choose the Payroll Calculation document. This is a required field because it provides the actual labor costs. The system uses this payroll data to retrieve employee salary amounts employees' salaries for allocation.
After the basis is selected, the system examines employee timecards for the corresponding period to determine how time was allocated across projects and then distributes the salary costs accordinglyThe “Use New Income & Expenses Reallocation Schema” option refers to an updated internal method (schema) used by the system to manage cost allocation logic.
Note: This is a system-controlled setting and is not amendable by users.
Allocation of Labor Cost
This tab is available for documents with the Labor Cost Allocation transaction type. The tab contains two tables: Labor Costs and Allocation Results.
The Labor Costs table is automatically filled based on the payroll calculation document chosen selected on the Main tab. Each employee may appear in one or more rows, depending on the number of accrual types included in the payroll document. Users can remove unnecessary rows and adjust the amounts to be allocated.
Deductions from payroll calculations are generally excluded from project cost allocation to avoid double-counting project costs. However, if a deduction is marked as manually adjusted during payroll calculation, it is included in the upper tablethe allocation as a negative amount and distributed across projects, thereby reducing the corresponding project costs.
- Cost Item - The cost category being allocated (e.g., Labor)
- Employee - The name of the employee whose labor costs are being allocated.
- Accrual Type – - Type of payroll cost (e.g., regular hours, overtime, vacation) for this accrual per row.
- Expense Item - The GL expense category type to which this cost belongs (e.g., Labor Costs).
- Business Activity - The type of business activity linked to the cost.
- Department - Shows the department associated with the employee.
- Amount – - Total cost for this employee/accrual type that will be allocated to projects or non-project work.
- Amount (National Currency) - The value of this cost line in the company’s base currency.
To distribute costs automatically according to employees’ time cards, click Allocate by Time Card. For employees on projects with Active or Proposed status, their labor costs will be allocated automatically to those projects, as shown in the Allocation Results table. Employees who are not part of any project team will have <Not related to projects> In the Project column of the lower table, it indicates that their costs are not allocated to any project.
The Allocation Results table shows how labor costs are assigned to projects or tasks. It calculates how much of an employee’s labor cost goes to each project based on allocation factors. If an employee isn’t part of any project team, their cost is shown as <Not related to projects>.
Cost allocation can be done either using payroll calculation documents or by selecting the “Allocate by Time Card” option.
Once the basis is chosen and “Fill by Basis” is clicked, the system checks whether the employee is assigned to any active projects. If the employee is working on multiple projects, their salary is evenly distributed across them. Alternatively, when the Time Card option is selected, allocation is based on submitted time cards for the selected period, which reflect how working hours are split among projects, and salary costs are then distributed accordingly.
- Project / Task – The project or task that receives the allocated labor costProject Task - Indicates where labor costs are allocated; costs can be split across projects or specific tasks.
- Project WBS – The Work Breakdown Structure code for the project/task, - A hierarchical code used to identify the exact level within the project hierarchystructure.
- Factor – - The portion proportion of the total labor cost assigned to this each project /or task.
- Amount – - The actual calculated cost applied allocated to the project/task , calculated using the factorbased on the factor.
- Amount (National Currency) - The amount value shown in the company’s base currency.
- Remaining Budget Amount – Shows - Displays the remaining available budget for the project/task after the allocation; optional for reference.
- Project – The main project name or identifier. - Remaining budget for the entire project
- Project Task – The - Remaining budget for the specific task within the project to which the cost is allocated.
- Project WBS - Remaining budget for the specific WBS level
If the Show Allocation Results only for the Selected Employee row checkbox is unchecked, the lower table displays all labor cost allocations (for all employees). If the checkbox is checked, the lower table shows allocation results only for the selected employee cost from the upper table.
Allocate by Time card
To distribute costs automatically based on employees’ time cards, click Allocate by Time Card. Labor costs for employees on projects with Active or Proposed status are allocated proportionally to the hours recorded in their time cards, as shown in the Allocation Results table. Employees not assigned to any project appear as <Not related to projects> in the Project column, and their costs are not allocated. Hours not linked to a project remain unassigned, with the corresponding portion of the salary excluded from project allocations
Project costs are allocated based on the time card date. The document date must match the time card date, and only hours within the project’s proposed period are applied. If the dates don’t align, no allocation occurs.
Recognized by Time Cards
The Recognized by Time Cards tab reverses entries in the Income and Expense by Projects register that were created by time cards. This tab manages project cost allocation using employee timecards, allowing the system to reverse previous cost assignments with negative amounts and reallocate payroll costs based on actual hours worked. Only timecards from the same accounting period are considered, so costs are applied in the correct period, while any unassigned hours remain as non-project costs.
Additional information tab
On this tab, users can enter optional details for the document, such as the department and the person responsible for the allocation. No fields are mandatory.
