This article provides an overview of Labour Drivers in Magnifi. Labour Drivers are used to project payroll costs, which then flow automatically into the Profit and Loss Projection.
Labour Drivers are Magnifi’s preferred method for projecting payroll because they provide detailed, employee-level modelling and automatically calculate on-costs.
Use Labour Drivers when you want to:
Build a payroll forecast based on employee data that links directly to your Profit and Loss.
See labour costs split between Direct Labour and Overhead Labour, based on employee classifications.
View the detailed data behind your labour cost projection.
Allocate employee costs to divisions for divisional reporting.
Capacity Planning:
If you want to use Magnifi’s Capacity tools, you must use Labour Drivers. Capacity calculations use the hours stored against employees in Labour Drivers.
Optional, but preferred:
Labour Drivers are optional for payroll projections. If you do not wish to project payroll through Labour Drivers, you can enter wages manually in the Profit & Loss Projection instead. See Manual Payroll Projections for setup instructions.
Work through the Labour Drivers tabs from left to right to build your labour cost projection:
Start by adding or importing employees under the Employees tab.
To allocate employees across divisions, go to Options → Divisional Allocation.
Move to the Hourly Rate, Hours per Week, and (optionally) Allowances tabs to set up employee details for payroll calculations.
In the final tab, Gross Wages, enter projected pay periods, overtime, and on-costs to complete the gross wage projection.
Payroll costs automatically flow into the Profit and Loss Projection:
Costs appear under either Direct Labour Cost or Overhead Labour Cost, depending on each employee’s classification. However you can change the classification under Payroll Link - Allocation Rules.
Double-click any payroll account in the Profit and Loss Projection to view the data behind the forecast.
Magnifi supports two methods for projecting payroll:
Wages calculated automatically.
On-costs (super, payroll tax, workers compensation) calculated automatically.
Requires Payroll Link.
Required if you want to use Capacity Planning (employee hours are sourced from Labour Drivers).
Recommended for detailed payroll modelling or where employee-level forecasting is needed.
Remove Payroll Links for wages accounts.
Enter wages manually in the Profit & Loss Projection.
Add super and on-costs as % calculations.
Recommended when:
you have too many employees to set up individually,
payroll is modelled at a high level, or
you prefer to work directly in the P&L and are not using Capacity Planning.
This comparison helps new users decide up front which method best suits their situation.
What if I don’t use Labour Drivers?
You can enter payroll costs manually in the Profit and Loss Projection. However, on-costs will not be automatically calculated. To project wages manually, remove payroll links in the Chart of Accounts and add on-costs separately as a % of wages. See Manual Payroll Projections for detailed steps.
Note: Capacity Planning is not available if wages are projected manually only.
What happens if I change an employee’s details mid-year?
Any changes will flow through to future months from the point of adjustment, automatically updating your labour cost projections.
Can I add or remove employees?
Yes. You can add new employees, edit existing ones, and enter commencement or termination dates to factor in staff changes throughout the year.