Page 182 - Budgeting for Managers

Budgeting and Human Resources
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The Negative Paycheck
If you manage a restaurant, you may want to tell your
employees about the possibility of a “negative paycheck.”
Otherwise, some employees may get a rude surprise when they see
their paychecks—the stub may indicate that they owe money to their
employer!
Restaurants are required to withhold taxes for an employee’s tips
as well as his or her hourly rate. Many employees take their tips home
as cash. If the salary is low and the tips are high, the paycheck may end
up having more withholding than there is pay! The result is a pay stub
and no check—and the employee has to pay the restaurant money to
make up for what was sent to Uncle Sam!
relocation (moving expenses)—are counted as additional tax-
able salary, increasing the deductions on paychecks.
Putting It All Together
After you’ve created a spreadsheet showing salaries and rates
for each employee, you should give it to HR and have them add
withholding information. Then build a single budget spreadsheet
showing the department’s total HR budget—all salaries and
wages for all staff. Make sure to note whether or not the total
includes the corporate liability for extras such as the corporate
contribution to Social Security and any employee benefits
above salary that do not appear on the paycheck, such as
employer contributions to health plans, insurance, or perks such
as health club memberships.
Review the spreadsheet carefully with HR, accounting, and
your boss. Check for items that might change, such as mid-
year raises. If employees are unionized or have employment
contracts, make sure to check your figures against all appropri-
ate guidelines, agreements, and contracts. The result will be
your department’s HR budget for the year.
After the budget closes for the fiscal year, HR and account-
ing will be able to generate an actual vs. estimated spreadsheet
for salary and human resources costs for the year. Since most