Wednesday, February 3, 2010

Payroll Costs - What's Included?

Just had a printer call me with a question as to who or what should be included under payroll costs. Specifically, she was referring to a statement that I made in Quick Printing Magazine that suggested a payroll ratio of 26-28%. She asked what about salaries and commissions paid to outside sales reps.

My answer was pretty straight forward. All salaries, wages and commissions for all employees, excluding a single owner, should be included in this calculation. And that of course would include outside sales reps.

Remember, that employer's FICA, medicare, workman's comp., health insurance, and unemployment payments should be included in this calculation. If the expense wouldn't otherwise exist but for the fact that you have employees then it should be included in or under payroll. By the way, that would even include payments made to outside payroll services or money spent internally to generate pay checks.

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