Abstract: System and method for an integrated production tracking and pay rate calculation system are disclosed. In a preferred embodiment, the production tracking and pay rate calculation system of the present invention is an automated tool for helping control labor costs and for interfacing with payroll as well as a time clock. The system evaluates department and employee productivity by tracking production of all products and hours worked by all employees. The system is designed to enable calculation of a cost per unit based on multiple employee skill levels and production units per hour, per function, and per product type. The summation of the cost per unit for all of the functions for one product, plus any overhead labor expenses, equates to a total labor cost for that product.