Human capital expenses are charged against General Ledger accounts based on specified allocations stored in account segments or chart fields. Salary expenses are allocated based on salary allocations that you specify for individual positions and employees. At the global level, default natural account allocations are associated by Administrators for entity-specific compensation elements (associating benefit expenses to account segment 610000, for example). Administrators can provide missing allocation data and override allocation defaults by setting the Follows Salary Allocation option as follows:
“Yes”—Use the same allocations as those defined for salary expenses. In this case, you need not specify all segments or chart fields on the Allocation tab. See Example 2 and Example 3.
“No”—Do not use the allocations defined for salary expenses. In this case, you must specify all segments or chart fields on the Allocations tab. See Example 1.
Use the Salary Allocation Details tab to specify the General Ledger account segments or chart fields from which positions in your cost center are funded. For example, assume that compensation expenses for a Research Scientist position are allocated as follows using two default natural accounts:
80% is allocated from the first account using Fund A, Program B, and Department D.
20% is allocated from the second account using Fund B, Program B, and Department D.
Assume that these compensation expenses, totaling $131,700, are added to the position:
Base Salary—$100,000
Additional earnings—$20,000
Benefits—$5,500
Employer-paid taxes—$6,200
The resulting base salary allocation for the position:
Table 19. Compensation Allocations
| Natural Account | Fund | Program | Department | Percentage | Amount |
|---|---|---|---|---|---|
| Nat Sal | Fund A | Program B | Depart-D | 80 | $80,000 |
| Nat Sal | Fund B | Program B | Depart-D | 20 | $20,000 |
Note: | Allocations that you define for individual compensation elements take precedence over allocation defaults. If, however, you do not specify allocations at the compensation element level, any allocation defaults defined are applied. |
Review how benefit expense allocations (such as those for employer-paid taxes and additional earnings) for the Research Scientist position are made in these circumstances:
Example 1 in which “Follows Salary Allocation” is “No”.
Example 2 in which “Follows Salary Allocation” is “Yes”.
Example 3 in which Follows Salary Allocation” is “Yes,” but the natural account segment is not specified in the “Manage other compensation elements” task, and a department default is defined and applied using the “Manage compensation defaults” task.
Example 4 in which effective dating is used.