How to calculate piece-cost

Piecework rate is used to determine the employee's earnings under a piecework system of remuneration. This calculationtion to measure the amount of the employee per unit of production or per executed transaction expressed in monetary terms.

You will need

• 1. Knowledge of methods to study timing: electronic timing and photos of the day.
• 2. The unified tariff qualification reference of works and occupations of workers (ETCS).
• 3. Tariff system operating in your industry.

Instruction

1. Determine the category of the work performed using ETCS. Rate the nature and complexity of operations and refer to the tariff level.
2. Using a scale of charges set out in your organisation or an approved centrally (in the public sector), determine the hourly tariff rate corresponding to this category of work.
3. Determine the time (in hours or minutes) or production rate in the physical measure (kilograms, meters, pieces, etc.) on the basis of photographs of the working day or timing.
4. Calculate piece rates. This can be done in two ways. If in Step 3 you identified the time, then piece quote can be obtain by multiplying the rate for your specified time. If you determined the rate of production, the piecework rate you get by dividing the rate of pay (hourly or daily) to an appropriate output rate (hourly or daily).