BUDGETING AND MANAGING FISCAL RESOURCES:Determining the Salary (Personnel) Budget
Determining the Salary (Personnel) Budget The salary budget, also known as the personnel budget, projects the salary costs that will be paid and charged to the cost center in the budget period (see Table 14-1). Managing the salary budget is directly related to the manager’s ability to supervise and lead the staff. Better manag- ers tend to have more stable staff with fewer resources spent on supplementary staff, turnover, or absenteeism. In addition to anticipated salary expenses, factors such as benefits, shift differen- tials, overtime, on-call expenses, and bonuses and premiums may affect the salary budget as well.
Benefits After the number of required full-time equivalents (FTEs) is determined (see Chapter 16 on scheduling), it is also necessary to determine how many FTEs are necessary to replace personnel for benefit time (vacations, holidays, personal days, etc). This factor can be calculated by deter- mining the average number of vacation days, paid holidays, personal days, bereavement days, or other days off with pay that the organization provides and the average number of sick days per employee as experienced by the cost center.