The labor rate is the rate by which your team members are getting paid and will be used to calculate their paychecks (i.e. labor costs). The sum of the labor costs plus non-billable expenses will be used to calculate the financial balance between billable amounts and costs in the Economy report.

To enter a default labor rate for a team member, please go to Team > Team members and select one of the members. Then you will be able to enter their labor rate on their profile.

If a team member receives different compensation on different projects, you can override the default labor rate and enter a different labor rate for each of the projects they will be working on.

You can enter a custom labor rate when assigning members to the project, on the 'Project members' page of the project overview:

*** To get to this tab, click the 'Manage members and rates' link in the upper right corner of the project overview.

If you enter both billable and labor rates for your projects and members, this will help you gain valuable insights into which projects are the most profitable:
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