USA HR management expenses

[afaculty10]

Hi, we outsource our HR functions (like time-off tracking; contract documentation; background checks; etc). Is the fee from the outsourcing company considered Payroll expenses or just administrative expenses.

Similarly, are recruitment expenses considered Payroll expenses?

Thanks in advance.

 

[Drmdcpa]

I have seen many things in different sized small businesses.

Some book recruiting expense as advertising or marketing or a subaccount of the same; some book it to the same acct as other HR expense; rarely is it wrapped into payroll.

The cost of HR and payroll processing is often booked to Outside Services, but can be booked to payroll. The problem with the latter is it makes it more difficult to reconcile payroll and payroll tax expense with payroll reporting forms.

 

[afaculty10]

I have seen many things in different sized small businesses.

Some book recruiting expense as advertising or marketing or a subaccount of the same; some book it to the same acct as other HR expense; rarely is it wrapped into payroll.

The cost of HR and payroll processing is often booked to Outside Services, but can be booked to payroll. The problem with the latter is it makes it more difficult to reconcile payroll and payroll tax expense with payroll reporting forms.

Thanks for the clarification. I assume the same to a vendor's fee to manage a 401K program? That is, it's an expense but shouldn't be booked as Payroll Expense.

 

[Drmdcpa]

401k contributions and management fees go to Pension Expense or Employee Benefits generally not Outside Services.

 

[afaculty10]

Once again, thanks for the great clarification.

 

[bklynboy]

We record 401K vendor fees to outside expense no different than any other costs to outsource services. Its not part of part of pension expense which is solely the amount the company is funding on behalf of employees.