The procedures included in this sample policy can be used for the proper accounting treatment of fringe benefit adjustments.

According to this policy, at the start of each fiscal year, a calculation should be made to spread by period the planned wage dollars used in establishing the annual budgeted fringe rate; spread should be calculated based on the number of workdays per period; the hourly fringe calculation should be calculated by multiplying the actual monthly payroll distribution by the planned fringe percentage; and periodically, total wages paid, excluding vacation and holiday pay, should be compared to planned wages to determine over or underabsorption.