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

# Setting Your Labor Rate

> Set your hourly rate so Knead can calculate labor costs in recipes.

## Overview

Your labor rate tells Knead how much your time costs per hour. This feeds directly into recipe costing, giving you an accurate picture of what each product truly costs to make.

## Where to Set Your Labor Rate

1. Tap **Settings** in the main navigation.
2. Tap **Business**.
3. Find the **Labor Rate** field.
4. Enter your hourly rate (for example, \$25.00 per hour).
5. Save.

Knead stores this value in cents for precision. You enter a dollar amount, and Knead handles the conversion behind the scenes.

## Hands-On Hours, Not Hands-Off Time

Labor cost is based on **active, hands-on time** — the minutes you're actually working: mixing, shaping, decorating, packaging. Passive time, when the dough is chilling, proofing, or resting, isn't labor. You're not standing over it, so it isn't counted in your labor cost — that waiting time belongs in **Bake Lead Time** instead.

There are two ways Knead learns a product's hands-on time:

* **Hands-on hours per unit** — a field on the product form (in **Pricing & Production**) for the active baker time it takes to make one unit.
* **Recipe active minutes** — if the product has a recipe with phases, Knead uses the recipe's active minutes instead, and ignores the per-unit field.

<Note>Good to know: A recipe's time is split into active (hands-on) and passive (chilling, proofing) minutes. Only the active minutes drive labor cost.</Note>

## How Labor Rate Feeds Into Recipe Costing

Every recipe in Knead can include production phases — mixing, baking, decorating, packaging. Each phase carries active and passive time estimates in minutes.

Knead uses a straightforward formula:

**Labor cost = Active hands-on time x Hourly rate**

For example, if your labor rate is \$25/hour and a recipe takes 90 active minutes across all phases:

* 90 minutes = 1.5 hours
* 1.5 hours x \$25 = **\$37.50 labor cost**

This labor cost is added to the ingredient cost to give you a **total cost per product**.

## Why This Matters

Without accounting for labor, you underestimate what your products cost. A cake that uses \$12 in ingredients but takes 3 hours to make actually costs \$12 + \$75 = \$87 at a \$25/hour rate. That changes how you price it.

Accurate total costs help you:

* Set prices that cover your time, not only your ingredients.
* Calculate real profit margins in The Pantry.
* Identify which products are worth your time and which are not.

<Tip>Pro tip: Not sure what to set? Start with what you would pay someone else to do the same work. You can always adjust it later as you refine your pricing.</Tip>

## Updating Your Labor Rate

You can change your labor rate anytime. When you update it:

* Future recipe cost calculations use the new rate.
* Existing orders and invoices are not recalculated.
* Product margins on the pricing page update to reflect the new labor cost.

<Note>Good to know: If you have not added time estimates to your recipe phases, the labor cost shows as \$0. Add time estimates to each phase to get meaningful labor cost data.</Note>

## Related Articles

* [Recipe Costing with The Pantry](/products-and-pricing/recipe-costing-with-the-pantry)
* [Setting Prices and Understanding Margins](/products-and-pricing/setting-prices-and-understanding-margins)
* [Creating Your First Product](/creating-your-first-product)

***

*Still need help? [Contact us](mailto:hello@kneadapp.co)*