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Following on Rose Robbins' question, how do you account for Worker's Comp?

My perspective is to break it into two pieces: One as a fringe benefit expense (not W-2 reportable) as it is not comp but does scale with employees, and;

Second as a non-comp COGS component for people who are direct labor.

Any opinions on this treatment?   Alternatives?

Answers

Mark Shornick
Title: CFO
Company: Numerix
(CFO, Numerix) |

I concur with Keith's classifications, it's a fringe rather than a general insurance cost. Ideally I would recognize this cost as the payroll "consumes" premium based on payroll x rates, especially if the payroll is changing during the policy period.

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