adjustment to fy12 payroll expense – introduction
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Composite Fringe Benefit Rates Job Aid Adjustment to FY12 Payroll Expense Last Revision: August 8, 2012. Adjustment to FY12 Payroll Expense – Introduction. Introduction - PowerPoint PPT PresentationTRANSCRIPT
Campus Budget Office Reserve Ending Balances*
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Introduction
Our employee benefit programs management has changed. We will now use the same methodology to budget and expense fringe benefit costs, so we can increase predictability and decrease variability of one of the UC Berkeley’s largest expenses.
Adjustments to FY12 Payroll Expenses are affected by this change. Here is how.
What changed for me?
There will be no change to how we transact payroll cost transfers.
What do I need to do differently?
Continue to use PPS data to transact payroll cost transfers. In some cases you will see legacy data, that’s OK, the system will recognize the legacy account codes and convert them to the new values.
How is this impacted by the new fringe rates?
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Mary’s Original Transaction
For example:
Mary is a staff member. Her May 2012 earnings were $3,000 and her fringe benefit costs for the month of May were $1,200. These costs are transferred in August 2012 to a new chartstring.
Example continued on next page…
Original Charge
Example 1 – Adjustment to FY12 Payroll Expense (Cont’d)
Since all cost transfers will be transacted through the new Fringe Benefit Rate Process, Mary’s Fringe Costs are automatically calculated as follows:
Mary’s staff member fringe rate = 38%
Therefore: $3,000 x 38% = $1,140 in transferred May 2012 fringe costs
But that leaves a $60 fringe cost on the original chartstring that now needs be adjusted ($1,200 - $1,140 = $60).
See tables below:
Jenny’s Original Transaction
Using the new composite fringe rate process for the transfer of pay posted in FY12 will in some cases create fringe benefit cost overages or shortfalls that will need to be adjusted.
For example:
Jenny is a staff member. Her May 2012 earnings were $3,000 and her fringe benefit costs for the month of May were $900. These costs are transferred in August 2012 to a new chartstring.
Example continued on next page…
Original Charge
Example 2 – Adjustment to FY12 Payroll Expense (Cont’d)
Since all cost transfers will be transacted through the new Fringe Benefit Rate Process, Jenny’s Fringe Costs are automatically calculated as follows:
Jenny’s staff member fringe rate = 38%
Therefore: $3,000 x 38% = $1,140 in transferred May 2012 fringe costs
But that moves an excess of $240 in fringe costs from the original chartstring that now needs be adjusted ($900 - $1,140 = -$240).
See tables below:
FY12 Payroll Expense Adjustment Process
Fringe Overage / Shortfall Adjustments Process
*
*
Introduction
Our employee benefit programs management has changed. We will now use the same methodology to budget and expense fringe benefit costs, so we can increase predictability and decrease variability of one of the UC Berkeley’s largest expenses.
Adjustments to FY12 Payroll Expenses are affected by this change. Here is how.
What changed for me?
There will be no change to how we transact payroll cost transfers.
What do I need to do differently?
Continue to use PPS data to transact payroll cost transfers. In some cases you will see legacy data, that’s OK, the system will recognize the legacy account codes and convert them to the new values.
How is this impacted by the new fringe rates?
*
*
Mary’s Original Transaction
For example:
Mary is a staff member. Her May 2012 earnings were $3,000 and her fringe benefit costs for the month of May were $1,200. These costs are transferred in August 2012 to a new chartstring.
Example continued on next page…
Original Charge
Example 1 – Adjustment to FY12 Payroll Expense (Cont’d)
Since all cost transfers will be transacted through the new Fringe Benefit Rate Process, Mary’s Fringe Costs are automatically calculated as follows:
Mary’s staff member fringe rate = 38%
Therefore: $3,000 x 38% = $1,140 in transferred May 2012 fringe costs
But that leaves a $60 fringe cost on the original chartstring that now needs be adjusted ($1,200 - $1,140 = $60).
See tables below:
Jenny’s Original Transaction
Using the new composite fringe rate process for the transfer of pay posted in FY12 will in some cases create fringe benefit cost overages or shortfalls that will need to be adjusted.
For example:
Jenny is a staff member. Her May 2012 earnings were $3,000 and her fringe benefit costs for the month of May were $900. These costs are transferred in August 2012 to a new chartstring.
Example continued on next page…
Original Charge
Example 2 – Adjustment to FY12 Payroll Expense (Cont’d)
Since all cost transfers will be transacted through the new Fringe Benefit Rate Process, Jenny’s Fringe Costs are automatically calculated as follows:
Jenny’s staff member fringe rate = 38%
Therefore: $3,000 x 38% = $1,140 in transferred May 2012 fringe costs
But that moves an excess of $240 in fringe costs from the original chartstring that now needs be adjusted ($900 - $1,140 = -$240).
See tables below:
FY12 Payroll Expense Adjustment Process
Fringe Overage / Shortfall Adjustments Process
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