Utilization rate

Hi, please help me define “direct labor” when referring to utilization rate. Is it the hourly rate without benefits, overhead and profit?

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Hi @devoragracias ! Let’s get one of our experts to define “direct labor”.

@heatherrivera do you mind answering this question?

@devoragracias Great question! Direct labor is one’s salary. It represents the time charged to projects, whether invoiced or note. Salary is defined in the AHPP as “regular payments to staff for services…” This would not include benefits, overhead, or profits.

Hope that helps!
Heather Rivera, NCARB

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