What is the difference between the Budgeted Salary, the FTE Salary... »

4) What is the difference between the Budgeted Salary, the FTE Salary, the Optional Life Salary and the Benefit Salary?

  • Budgeted Salary - Generally defined as being the salary the employee will receive during the fiscal year.
  • Full Time Equivalent (FTE) Salary -Employee's salary if the employee is paid 100% effort over 12 months.
    • For most staff employees, Budgeted Salary & FTE Salary are the same. Faculty and Part-time employees will be different.
  • Optional Life (OL) Salary - The annualized salary as of the 1st of the current fiscal year or when newly hired.
    • It is calculated by multiplying the FTE salary times the percent effort.
    • It is not adjusted by mid-year salary changes and is never decreased.
    • In processing OL Salary, the greater of the current OL Salary or the FTE Salary is multiplied by the percent of effort.
    • Used to calculate the coverage amounts for Optional Life and Alternate Basic Life Insurance coverage.
  • Benefit Salary - The Benefit Salary is the Budgeted Salary as of September 1st of each year OR the previous Benefit Salary, whichever is greatest.
    • Should an employee’s salary change during the fiscal year, the Benefit Salary should stay the same until the next calculation period (September 1st of each year).
    • It is used to set coverage for ADD and LTD.

Example 1: An employee is budgeted for nine-months for $1,000 per month at 100% effort:

  • Budgeted Salary = $9000  ($1,000 per month * 9 months * 100%)
  • FTE Salary = $12,000 ($1,000 per month * 12 months * 100%)
  • OL Salary = $12,000 ($12,000 * 100%)

 


Example 2: An employee is budgeted for 12 months for $1000 per month at 50% effort:

  • Budgeted Salary = $6000 ($1,000 per month * 12 months * 50%)
  • FTE Salary = $12,000 ($1,000 per month * 12 months * 100%)
  • OL Salary = $6,000 ($12,000 * 50%)  

 

This page was last updated on 10/14/2013 2:50