Are items like vacation pay, sick pay, holiday pay and bonuses normally included as fringe in annual budgets or as separate line items?
Answers
I would expect everyone shows bonuses as a separate line item. I think it depends on your individual circumstances whether you'd need to show PTO as a line.
Hello. My general practice over the years on such items as follows:
1. Vacation and Sick Pay - At a budget level no; as technically the employee should be using close to all of those hours during the year (that is what they are there for). Example - If a person works full time at 40 per week, and gets 2 weeks vacation, then they are either using those 2 weeks or getting paid for some or all of it. I would accrue vacation earned but not yet used though, usually as a month end entry. Then offset as reported/used. I normally post actual vacation, sick, holiday, jury, etc. as separate line items on paychecks and if it is something you want to analyze, create a GL account for each.
2. Bonuses - I would budget for this, IF you have a formal or somewhat defined bonus or
Happy to delve further if you still have questions, thanks. -Paul
Hi Rose,
All four of those items are included in wage calculations for both
For financial reporting, the fringe lines normally include medical, dental, vision, retirement and any other benefit plans. There is a third wage-related category, which is taxes including FICA, FUTA, SUI and workers' compensation. Yes, unemployment and workers' comp are insurance, not taxes, but they are not usually considered among the fringe benefits offered employees as employers are required to pay in.