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Questions?
Please contact Kaitlyn McCrudden, senior accountant, if you need a journal entry completed to correct fringe allocations from PETs.
What are PETs?
Payroll expense transfers (PETs) are after-the-fact transfers to move salaries between speedtypes, projects and within awards.
How might fringe benefits be impacted by a PET?
When a regular payroll expense occurs, the charge to the salary account will trigger the fringe rate to be applied and charged to the correct benefit account.
When a PET occurs, the charge to the salary account in the speedtype that pay is moving to, as well as the credit to the salary account in the speedtype the pay is moving from, will trigger the benefits to be applied to the new speedtype and subsequently removed from the old speedtype. However, you won’t see this effect on benefits until month-end close.
What happens if I move pay that is over a year old?
The system will automatically apply the current year’s fringe rate to the PET but if the payroll that is being transferred is over a year old, the system will apply the previous fiscal year's (FY) fringe rate. Because fringe benefit rates change each year, the benefit rate applied to a PET for salary that is two years or older could be incorrect.
For example, the FY20 benefit rate for regular faculty was 28.40%. If $100 salary that occurred in FY20 was moved through a PET in FY22, the system would apply the FY21 benefit rate of 29%. However, this would be incorrect as it would charge the new speedtype $29 in fringe and remove $29 in fringe from the old speedtype, when there was only $28.4 in fringe that needed to be removed and reallocated. When this occurs, a journal entry is needed to adjust the fringe amounts.