> ## Documentation Index
> Fetch the complete documentation index at: https://docs.senzohq.com/llms.txt
> Use this file to discover all available pages before exploring further.

# Labor Cost Metrics

> Total labor cost, cost per FTE, agency cost, and premium labor definitions

# Labor Cost Metrics

## Total Labor Cost

**Definition:** The estimated total cost of all labor in a period, including regular wages, overtime premiums, and agency spend.

**Formula:**

```
Total Labor Cost = Regular Labor Cost + Overtime Cost + Agency Cost
```

**Notes:**

* Senzo estimates labor cost from hours and benchmark compensation rates if actual cost data is not uploaded
* For precise figures, provide actual payroll cost data in your upload
* Monthly and Annual views are toggled in the Labor Cost Analytics section

**Displayed in:** Overview (summary), Cost Analytics — Labor Cost tab

***

## Cost per FTE

**Definition:** Average labor cost per filled FTE for the period.

**Formula:**

```
Cost per FTE = Total Labor Cost ÷ Filled FTE
```

**Monthly vs Annual:**

* Monthly Cost per FTE: total monthly cost ÷ FTE
* Annual Cost per FTE: annualized cost ÷ FTE (equivalent to annual salary)

**Displayed in:** Cost Analytics — Labor Cost tab

***

## Overtime Cost

**Definition:** The estimated cost of all overtime hours at the applicable premium rate.

**Formula:**

```
OT Cost = overtime_hours × hourly_rate × overtime_premium_multiplier
```

Default premium: 1.5×. Adjustable in Cost Analytics settings.

**As % of labor cost:**

```
OT Cost % = (OT Cost ÷ Total Labor Cost) × 100
```

Benchmark: OT cost above 12% of total labor cost warrants operational review.

**Displayed in:** Cost Analytics — Labor Cost tab, Overview summary card

***

## Agency Cost

**Definition:** The estimated cost of agency or temporary staff hours.

**Formula:**

```
Agency Cost = agency_hours × agency_hourly_rate
```

Agency rates are typically 40–80% above equivalent employed staff rates. Default agency premium: 50% above base rate. Adjustable in Cost Analytics settings.

**As % of labor cost:**

```
Agency Cost % = (Agency Cost ÷ Total Labor Cost) × 100
```

**Displayed in:** Cost Analytics — Labor Cost tab, Overview summary card

***

## Premium Labor Spend

**Definition:** The combined cost of overtime and agency — all labor delivered above base employed rates.

**Formula:**

```
Premium Labor Spend = OT Cost + Agency Cost
```

**FTE Equivalent of Premium Spend:**

```
Premium FTE Equivalent = Premium Labor Spend ÷ Cost per FTE
```

This is the insight displayed in the Labor Cost Analytics card: "OT and agency spend this month (\$X) is equivalent to approximately Y FTE at average cost."

This number answers a powerful governance question: could we afford to hire the FTE we're replacing with premium labor?

**Displayed in:** Cost Analytics — Labor Cost tab, Overview summary card

***

## Cost Breakdown bar

The cost breakdown bar in Labor Cost Analytics shows the proportion of total labor cost attributable to:

* **Regular** (teal) — base employed labor
* **Overtime** (amber) — premium overtime hours
* **Agency** (indigo) — temporary and agency staff

***

## Notes on cost data reliability

Labor cost figures in Senzo are estimates unless actual payroll data is uploaded. Estimate accuracy depends on:

* **Compensation benchmark accuracy** — Senzo uses collective agreement rates as defaults; actual compensation varies by seniority and step
* **Benefits not included** — Senzo estimates wages only; employer benefits costs (typically 20–30% of wages) are not included unless provided
* **Geographic variation** — rates are Canadian national benchmarks; rural and remote premiums are not reflected in base calculations

For governance-level reporting, supplement Senzo's estimates with actual payroll data from your finance system.