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  • #1

    Budgeting question...

    Is anyone here responsible for creating a budget for their organization? If so, do you compute a dollar value for paid time off for employees of the organization that becomes part of the budget? Do you assign a dollar amount (line item) for paid time off in the budget? And if so, how does one determine this? I would assume if anyone does assign a dollar value, it would depend on different factors for different organizations.

    Thanks.
    "I lingered round them, under that benign sky: watched the moths fluttering among the heath and harebells, listened to the soft wind breathing through the grass, and wondered how any one could ever imagine unquiet slumbers for the sleepers in that quiet earth."
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  • #2
    Originally posted by Mithrandir View Post
    Is anyone here responsible for creating a budget for their organization? If so, do you compute a dollar value for paid time off for employees of the organization that becomes part of the budget? Do you assign a dollar amount (line item) for paid time off in the budget? And if so, how does one determine this? I would assume if anyone does assign a dollar value, it would depend on different factors for different organizations.

    Thanks.
    I used to, for a small group. Since I had a small group, I simply calculated time off to time worked as a ratio and assigned a dollar figure to it for each person and then summed up the total. In simple terms, assume you have someone who makes $52,000/year with 4 weeks of vacation. Their paid time off would equal $4,000/year.
    I'm just here for the baseball.

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    • #3
      Originally posted by chancellor View Post
      I used to, for a small group. Since I had a small group, I simply calculated time off to time worked as a ratio and assigned a dollar figure to it for each person and then summed up the total. In simple terms, assume you have someone who makes $52,000/year with 4 weeks of vacation. Their paid time off would equal $4,000/year.
      That would equal what their paid time off would be worth, but that wouldn't equate to an added expense in the budget. You wouldn't calculate their salary as $56,000 instead of $52,000 in the budget expenses. i guess what i am asking is if it's even worth trying to figure out what amount of added expense is incurred through employee paid time off.

      Am I making sense?
      "I lingered round them, under that benign sky: watched the moths fluttering among the heath and harebells, listened to the soft wind breathing through the grass, and wondered how any one could ever imagine unquiet slumbers for the sleepers in that quiet earth."

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      • #4
        Originally posted by Mithrandir View Post
        That would equal what their paid time off would be worth, but that wouldn't equate to an added expense in the budget. You wouldn't calculate their salary as $56,000 instead of $52,000 in the budget expenses. i guess what i am asking is if it's even worth trying to figure out what amount of added expense is incurred through employee paid time off.

        Am I making sense?
        only budget for it if it is a real cost - that is, do you have to backfill for these people when they are away? or do you just proceed with one fewer staff member & get less done? (or more, depending on the person ...)
        It certainly feels that way. But I'm distrustful of that feeling and am curious about evidence.

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        • #5
          Originally posted by Mithrandir View Post
          That would equal what their paid time off would be worth, but that wouldn't equate to an added expense in the budget. You wouldn't calculate their salary as $56,000 instead of $52,000 in the budget expenses. i guess what i am asking is if it's even worth trying to figure out what amount of added expense is incurred through employee paid time off.

          Am I making sense?
          It depends how your organization handles people who leave. If you pay them that $4000 when they leave, then it's a liability you need to account for.

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          • #6
            Originally posted by TranaGreg View Post
            only budget for it if it is a real cost - that is, do you have to backfill for these people when they are away? or do you just proceed with one fewer staff member & get less done? (or more, depending on the person ...)
            Thanks. That's what i pretty much figured, so it's nice to see I wasn't so far off
            "I lingered round them, under that benign sky: watched the moths fluttering among the heath and harebells, listened to the soft wind breathing through the grass, and wondered how any one could ever imagine unquiet slumbers for the sleepers in that quiet earth."

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            • #7
              Originally posted by joncarlos View Post
              It depends how your organization handles people who leave. If you pay them that $4000 when they leave, then it's a liability you need to account for.
              Thanks for that info...
              "I lingered round them, under that benign sky: watched the moths fluttering among the heath and harebells, listened to the soft wind breathing through the grass, and wondered how any one could ever imagine unquiet slumbers for the sleepers in that quiet earth."

              Comment

              • #8
                At the hospital, everyone's annual salary is based on an hourly rate (Annual salary / 2080 hours). We use the hourly rate to budget for worked, overtime, vacation, holiday off, holiday worked, etc. Each has it's own line item in each department's budget. Some departments have to budget for a vacation replacement; others don't. Since we do pay off vacation time if someone resigns or retires, we book a vacation accrual at our fiscal year end (June 30) to record the unused vacation liability since vacations are on a calendar year.

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                • #9
                  Originally posted by Mithrandir View Post
                  That would equal what their paid time off would be worth, but that wouldn't equate to an added expense in the budget. You wouldn't calculate their salary as $56,000 instead of $52,000 in the budget expenses. i guess what i am asking is if it's even worth trying to figure out what amount of added expense is incurred through employee paid time off.

                  Am I making sense?
                  Yup. Depending on how many are on your staff, you can use that to figure how many FTEs (Full-Time Equivalents) are required to cover for time off, if at all.
                  I'm just here for the baseball.

                  Comment

                  • #10
                    I do it for my company. Some positions, like mine, are non-replaced positions. So if I go on vacation no one comes in so my budget would be $52,000, not $56,000 (to use the numbers above). We also have nurses who get vacation but when they take time off we have to get another nurse come in to ensure we give good care. To calculate their vacation time we look at prior history. We have two different accounts - one for people working and one for people taking time off (PTO, vacation or whatever). We look at the last 12 months and take the ratio between the two to budget. So the the total expense for time off was $10,000 and total expense for people working was $100,000 we will budget PTO as 10% of the total wages for next year. This gets us somewhere close for the year, usually PTO is over budget for Nov/Dec and under budget most other months. We don't feel the need to check PTO per month to make the budget better.

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