---
title: "Cost Codes & Cost/Billing Rates for Equipment"
url: "https://help.ontraccr.com/en/article/cost-codes-cost-billing-rates-for-equipment"
language: "en"
last_updated: "2025-06-08T19:20:00.173Z"
---

# Cost Codes & Cost/Billing Rates for Equipment

## **💲 Cost Codes & Cost/Billing Rates for Equipment**  
 

## 📘 **Overview**

In Ontraccr, you can associate equipment with **cost codes** to support job costing, budgeting, and billing processes. Each equipment item can also have its own **internal costs** and **external billing rates** defined, which work in conjunction with cost code configurations.

This article explains how cost codes interact with equipment and how Ontraccr determines which rates apply when both are set.

* * *

## **🏷️ What Is a Cost Code?**

A **Cost Code** is a predefined category used in your job costing system to track labor, materials, or equipment costs.

When tied to equipment, it allows you to:

-   Group similar equipment under a unified budgeting code
-   Apply consistent cost and billing logic across multiple items
-   Automate cost tracking in job cost budgets and reports

* * *

## **🔧 How to Assign a Cost Code**

To assign a cost code:

1.  Go to the Equipment Page
2.  Click **Add** or **Edit** on an equipment profile
3.  Locate the **Cost Code** field
4.  Select the relevant code from the dropdown
5.  Click **Submit** to save

* * *

## **💰 Setting Cost and Billing Rates**

You can define both **internal costs** and **external billing rates** directly on the equipment profile:

| Field | Purpose |
| --- | --- |
| **Hourly Cost** | Internal operating cost per hour |
| **Daily Cost** | Internal operating cost per day |
| **Hourly Billing** | What you charge the customer per hour |
| **Daily Billing** | What you charge the customer per day |

You may use hourly, daily, or both depending on your billing model.

* * *

## **🔄 How Cost Code Inheritance Works**

When both equipment and its linked cost code have rates defined, **Ontraccr uses the following logic**:

### **📌 Precedence Rules**

| Scenario | Rates Used |
| --- | --- |
| Cost code has rates | Equipment **inherits cost code rates** (these override equipment rates) |
| Only equipment has rates | Equipment’s rates are used |
| Only cost code has rates | Equipment uses cost code rates |
| Neither has rates | No rates applied |

This ensures accurate and consistent cost allocation across your projects.

* * *

## **🧠 Use Case Example**

**Scenario**: You have a `Bulldozing` cost code with an hourly cost of `$120` and billing rate of `$150`.

-   You assign that cost code to all bulldozers.
-   Any bulldozer **without specific rates** will inherit those from the cost code.
-   If a bulldozer *does* have its own rates, but the cost code is also configured, the system will use the **cost code’s rates**, not the equipment’s.