NetSuite Adds Configurable Labor Cost Reporting

NetSuite's October 2026 update introduces greater flexibility in labor cost reporting, giving CFOs and controllers more control over how workforce expenses are measured and analyzed.

As part of NetSuite 2026.2, Oracle has enhanced its existing Labor Costs Report and Labor Costs and Revenue Report, allowing finance teams to create multiple reporting configurations based on selected payroll components.

Three important enhancements:

• Configurable labor costs: Finance teams can select which earnings and wages, employer payroll taxes, and employer benefit contributions are included in labor cost calculations. Multiple configurations can be saved, with a default selected for each report.
• Improved financial analysis: Labor costs can be evaluated by reporting period, subsidiary, department, location, and other segments. The Labor Costs and Revenue Report also allows users to select revenue accounts for comparison.
• Payroll activity selection: By default, the reports include regularly scheduled payroll runs. Off-cycle payroll, reversals, and adjustments must be explicitly included when relevant to the analysis.

Why does this matter for CFOs and controllers?

Labor cost analysis depends on more than accurate payroll processing. It also requires consistent definitions of what constitutes labor cost.

For example, a labor cost-to-revenue ratio calculated using wages alone will differ from one that also includes employer payroll taxes and benefit contributions. Both measurements may serve legitimate management purposes, but comparisons become less meaningful when the underlying cost definitions change between periods or departments.

Similarly, excluding off-cycle payroll activity or adjustments can affect reported labor costs, particularly when evaluating monthly trends, departmental performance, or workforce productivity.

The practical takeaway: Before relying on these reports for budgeting, forecasting, margin analysis, or staffing decisions, accounting teams should establish consistent reporting configurations and verify that the selected payroll components, adjustments, and revenue accounts align with management's intended analysis.

The enhancements require SuitePeople U.S. Payroll and appropriate permissions. Availability may vary as Oracle introduces NetSuite Next functionality in phases.

Source: Oracle NetSuite 2026.2, October Monthly Release

Primary source

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Source documentation date: October 19, 2026.

Disclaimer: This brief is provided by GOMEZ CPA for general informational and educational purposes only. It is not intended and should not be construed as tax, accounting, legal, investment, or financial advice.

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