About Ed McFarland Expertise Over 20 years of experience as a CFO, Controller and now Consultant to small businesses. Dealt with 401k, 403b, deferred comp plans, key man issues, disablity, business continuation plans, HSA plans and other benefit issues.
Experience Management experience in Financial Services, Manufacturing, Media, Logistics. Taught graduate and undergraduate business courses.
Question I have two questions, if that's OK.
First, what is the GAAP for overtime when allocating labor expenses? If an employee works 41 hours in a week do you allocate the last hour at the overtime rate to the job he was working on at the time, or do you divide the expense amount equally amoung all of the jobs worked on for the week? The latter seems more fair, but not sure if that's how it's generally done.
Second, I supervise a payroll processing department and an employee told me the last company she worked for taxed ALL bonuses at 25%, regardless of how much the bonus was for or the employee's withholding status. Doesn't sound right to me, but there might be some rule I don't know about so thought I'd ask.
Answer 1. This is a question about actual versus budget expenses. My question is which job created the overtime or was it something like down equipment? Let whatever caused the ot pick up the cost.
2. Regarding tax on the bonus, I always put it through as regular payroll, not withholding for things like medical. I'd let the 401k contributions hit and certainly take out the tax at the regular rate.
In the old days, there was no penalty for having too much or not enough held out. Now there is, you can't screw up somebody's tax planning for your convienence.
