Purpose

This article explains how to set up and manage contractors in Magnifi for capacity planning. Contractors are added when they work in a similar way to employees and you want to include their billable hours in capacity and utilisation analysis.

When to Use

Use this guide when you want to:
• Add a contractor who contributes to capacity
• Update contractor details
• End a contractor’s engagement

How To

Add a Contractor

1. Go to Labour Drivers → Employees​.
   

2. Select Add Employee.

3. Change Employment Type to Contractor.

4. Enter:

   • Hours per Week

   • Hourly Cost Rate 

   • Start Date

   • Classification (Direct or Overhead)

Contractors classified as Direct will appear in Capacity reports and Unit Cost calculations.

How Contractors Affect Capacity and Costs

Capacity Planning

Contractors classed as Direct are included in:
• Annual Capacity
• Monthly Capacity
• Capacity v Income
• Unit Cost Analysis

Some capacity screens include a toggle to Include Contractors, allowing you to compare results with and without contractor hours.

Profit and Loss Projection

Contractor costs do not automatically flow into Profit and Loss projections.
If you want to include contractor expenses in projected costs, enter these manually in your Profit and Loss Projections.

Should I Add Overhead Contractors?

In most cases, you would not add an Overhead contractor in Labour Drivers because:
• They do not appear in capacity (only Direct contractors do)
• Their cost is not included in Profit and Loss projections
• Therefore, there is no benefit in adding them here

If you need to include their cost, simply project the expense manually in the relevant overhead cost account.

Managing Leave or Expected Hours

You can manage contractor hours in one of two ways:

Option A — Enter Expected Hours (recommended)

Enter the weekly hours after leave is taken into account.

Option B — Apply a Leave Allowance

1. Go to Capacity → Annual Capacity​.
   

2. Expand the contractor row.

3. Enter an Other Leave % to reduce their total hours.

This keeps weekly hours consistent while adjusting capacity automatically.

Tips / FAQs

• The Hourly Cost Rate is used to calculate cost per billable hour under Analysis - Unit Cost to assist with margin analysis.
• You can update contractor details at any time — future capacity calculations will adjust automatically.
• If a contractor stops working, enter an End Date to remove future capacity.