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Prevailing Wage Calculation Methods for Cash Fringe Benefits
Prevailing Wage Calculation Methods for Cash Fringe Benefits
Prevailing Wage Calculation Methods for Cash Fringe Benefits
When utilizing PR Craft Classes or PR Craft Class Templates in Vista for Prevailing Wages there are five different calculation methods to choose from for the fringe benefit. They are as follows:
• Standard – A calculation method that uses the Prevailing fringe benefit to determine the Overtime total prevailing wage rate.
• Cash Fringe Factored – A calculation method that allows the fringe to be paid at an overtime rate, along with the pay rate. Both the Prevailing basic hourly rate and cash fringe rate must be factored to determine the Overtime total prevailing wage rate.
• Generous Fringe Benefit Package #1 – A method of calculation which allows companies with higher fringe benefits and lower wages than the prevailing wage package to properly calculate fringe, including overtime. This uses the employer’s Fringe Benefit Package Rate (both bona fide and cash) to determine the Overtime total prevailing wage rate. Cash Fringe is considered part of a “Generous Fringe Benefit Package” the moment the employer opts to pay an employee less than the prevailing basic hourly rate.
• Generous Fringe Benefit Package #2 – This method of calculation allows for companies with higher fringe benefits than the prevailing wage package to properly calculate fringe, including overtime. This uses the employers Fringe Benefit Package (bona fide ONLY) to determine the OT total prevailing wage rate. Cash Fringe is NOT considered part of the “Generous Fringe Benefit Package” under this option.
• Constant Fringe Benefit Rate – Straight time cash fringe will remain constant, and the same constant rate will be included in the employee’s hourly rate regardless of the earnings factor for overtime. This calculation method has been associated with packages where employees’ actual earnings were typically stronger than the prevailing wage hourly rate but often associated with bona fide fringe benefits.
We normally suggest using the Standard calculation method, but when it doesn’t produce the desired result, an employer should look at the other methods available for calculating the cash fringe. I decided to test an example of each calculation method and provide the results below. Often it is easier to understand the behind-the-scenes calculations when presented in this way. The results are provided below with the hope that it will clarify how the different options calculate fringe and help you to decide what’s the best option for your company. Keep in mind that each craft/class or craft/class template can have a different calculation method.
For examples of the Standard, Cash Fringe Factored, Constant Fringe Benefit rate calculations below please note the following:
• Prevailing wage basic hourly rate = $26
• Prevailing wage fringe benefit rate = $15.35
• Employee hourly rate = $34
• Employer paid fringe benefits = $0
• Employee worked 42 hours (40 straight time and 2 hours overtime).
For examples of the Generous Fringe Benefit Package # 1 & #2 please note the following:
• Prevailing wage basic hourly rate = $26
• Prevailing wage fringe benefit rate = $15.35
• Employee hourly rate = $25
• Employer paid fringe benefits = $35 total ($35/42) = .83
• Employee worked 42 hours (40 straight time and 2 hours overtime).
Standard Method
As you can see in the Payroll Register below, there are two lines for the cash fringe calculation, one for the Straight time hours and one for the Over-time hours.
The formula to calculate the Straight time fringe for this example is (($26*1) +15.35 fringe)) - (($34.00*1) +$0)) = $7.35 cash fringe per straight time hour ($7.35*40 =$294.00).
The formula to calculate the Overtime fringe for this example is (($26.00*1.5) + 15.35)) – (($34*1.5) +0)) = $3.35 cash fringe per overtime hour ($3.35*2) = $6.70.
Cash Fringe Factored
As you can see in the Payroll Register below, there are two lines for the cash fringe calculation, one for the Straight time hours and one for the Over-time hours.
The difference in this calculation from the Standard Calculation method is that BOTH the prevailing basic hourly rate and the cash fringe rate must be factored to determine the Overtime total prevailing wage rate.
The formula to calculate the Straight time fringe for this example is (($41.35) – ($34+$0)) = $7.25 cash fringe per straight time hour ($7.25 *40 =$294.00).
The formula for calculating the Overtime fringe for this example is ($41.35 -$0) = $41.35 which is the prevailing cash earnings. Multiply the ((41.35*1.5) +0) – (($34*1.5) +0) = $11.03 ($11.03*2=$22.06).
Generous Fringe Packet #1
The formula to calculate the Straight time cash fringe for the Generous Fringe Benefit Package #1 is as follows (($26*1) +15.35) – ($25*1+.83) =15.52.
And calculating Overtime is as follows: ((26*1.5) +(15.35+15.52)) – ($25*1.5) +.83) = $25.81.
The straight time rate would be $15.35 – ($35/42) = $14.52. This would be the rate for both Straight time and Overtime because the $26 +$25.81 = $51.81 is greater than the max amount of $41.35 prevailing wage rate.
Therefore the Cash Fringe is $14.52*42 = $609.84.
Generous Fringe Packet #2
The formula to calculate the Straight time cash fringe for the Generous Fringe Benefit Package #2 is as follows (($26*1) +15.35) – ($25*1+.83) =15.52.
And calculating Overtime is as follows (26*1.5) +.83) – (($25*1.5) +.83)) = $1.50.
The straight time rate would be $15.35 – ($35/42) = $14.52. This would be the rate for both Straight time and Overtime because the $26 +$1.50 = $27.50 and is less than the max amount of $41.35 prevailing wage rate.
Therefore the Cash Fringe would be $14.52*42=$609.84.
Constant Fringe Benefit Rate (C)
The calculation for the Constant Fringe Benefit Rate (C) is ($26.00*1+15.35) – (34.00*1+0) =$7.35. The rate of $7.35 is used for both Straight time and Overtime hours.
Therefore, Cash Fringe is equal to $7.35*42=$308.70.
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This is a lot of information, but it gives you a look into how each Cash Fringe Method of Calculation is computed.
It is a matter of preference as to which method you choose for each Craft/Class Template. If you need any assistance setting up prevailing wage in your Vista system or help in determining which cash fringe calculation is right for your company, please visit our website at constructech.io and book a call with one of our payroll consultants.
Prevailing Wage Calculation Methods for Cash Fringe Benefits
When utilizing PR Craft Classes or PR Craft Class Templates in Vista for Prevailing Wages there are five different calculation methods to choose from for the fringe benefit. They are as follows:
• Standard – A calculation method that uses the Prevailing fringe benefit to determine the Overtime total prevailing wage rate.
• Cash Fringe Factored – A calculation method that allows the fringe to be paid at an overtime rate, along with the pay rate. Both the Prevailing basic hourly rate and cash fringe rate must be factored to determine the Overtime total prevailing wage rate.
• Generous Fringe Benefit Package #1 – A method of calculation which allows companies with higher fringe benefits and lower wages than the prevailing wage package to properly calculate fringe, including overtime. This uses the employer’s Fringe Benefit Package Rate (both bona fide and cash) to determine the Overtime total prevailing wage rate. Cash Fringe is considered part of a “Generous Fringe Benefit Package” the moment the employer opts to pay an employee less than the prevailing basic hourly rate.
• Generous Fringe Benefit Package #2 – This method of calculation allows for companies with higher fringe benefits than the prevailing wage package to properly calculate fringe, including overtime. This uses the employers Fringe Benefit Package (bona fide ONLY) to determine the OT total prevailing wage rate. Cash Fringe is NOT considered part of the “Generous Fringe Benefit Package” under this option.
• Constant Fringe Benefit Rate – Straight time cash fringe will remain constant, and the same constant rate will be included in the employee’s hourly rate regardless of the earnings factor for overtime. This calculation method has been associated with packages where employees’ actual earnings were typically stronger than the prevailing wage hourly rate but often associated with bona fide fringe benefits.
We normally suggest using the Standard calculation method, but when it doesn’t produce the desired result, an employer should look at the other methods available for calculating the cash fringe. I decided to test an example of each calculation method and provide the results below. Often it is easier to understand the behind-the-scenes calculations when presented in this way. The results are provided below with the hope that it will clarify how the different options calculate fringe and help you to decide what’s the best option for your company. Keep in mind that each craft/class or craft/class template can have a different calculation method.
For examples of the Standard, Cash Fringe Factored, Constant Fringe Benefit rate calculations below please note the following:
• Prevailing wage basic hourly rate = $26
• Prevailing wage fringe benefit rate = $15.35
• Employee hourly rate = $34
• Employer paid fringe benefits = $0
• Employee worked 42 hours (40 straight time and 2 hours overtime).
For examples of the Generous Fringe Benefit Package # 1 & #2 please note the following:
• Prevailing wage basic hourly rate = $26
• Prevailing wage fringe benefit rate = $15.35
• Employee hourly rate = $25
• Employer paid fringe benefits = $35 total ($35/42) = .83
• Employee worked 42 hours (40 straight time and 2 hours overtime).
Standard Method
As you can see in the Payroll Register below, there are two lines for the cash fringe calculation, one for the Straight time hours and one for the Over-time hours.
The formula to calculate the Straight time fringe for this example is (($26*1) +15.35 fringe)) - (($34.00*1) +$0)) = $7.35 cash fringe per straight time hour ($7.35*40 =$294.00).
The formula to calculate the Overtime fringe for this example is (($26.00*1.5) + 15.35)) – (($34*1.5) +0)) = $3.35 cash fringe per overtime hour ($3.35*2) = $6.70.
Cash Fringe Factored
As you can see in the Payroll Register below, there are two lines for the cash fringe calculation, one for the Straight time hours and one for the Over-time hours.
The difference in this calculation from the Standard Calculation method is that BOTH the prevailing basic hourly rate and the cash fringe rate must be factored to determine the Overtime total prevailing wage rate.
The formula to calculate the Straight time fringe for this example is (($41.35) – ($34+$0)) = $7.25 cash fringe per straight time hour ($7.25 *40 =$294.00).
The formula for calculating the Overtime fringe for this example is ($41.35 -$0) = $41.35 which is the prevailing cash earnings. Multiply the ((41.35*1.5) +0) – (($34*1.5) +0) = $11.03 ($11.03*2=$22.06).
Generous Fringe Packet #1
The formula to calculate the Straight time cash fringe for the Generous Fringe Benefit Package #1 is as follows (($26*1) +15.35) – ($25*1+.83) =15.52.
And calculating Overtime is as follows: ((26*1.5) +(15.35+15.52)) – ($25*1.5) +.83) = $25.81.
The straight time rate would be $15.35 – ($35/42) = $14.52. This would be the rate for both Straight time and Overtime because the $26 +$25.81 = $51.81 is greater than the max amount of $41.35 prevailing wage rate.
Therefore the Cash Fringe is $14.52*42 = $609.84.
Generous Fringe Packet #2
The formula to calculate the Straight time cash fringe for the Generous Fringe Benefit Package #2 is as follows (($26*1) +15.35) – ($25*1+.83) =15.52.
And calculating Overtime is as follows (26*1.5) +.83) – (($25*1.5) +.83)) = $1.50.
The straight time rate would be $15.35 – ($35/42) = $14.52. This would be the rate for both Straight time and Overtime because the $26 +$1.50 = $27.50 and is less than the max amount of $41.35 prevailing wage rate.
Therefore the Cash Fringe would be $14.52*42=$609.84.
Constant Fringe Benefit Rate (C)
The calculation for the Constant Fringe Benefit Rate (C) is ($26.00*1+15.35) – (34.00*1+0) =$7.35. The rate of $7.35 is used for both Straight time and Overtime hours.
Therefore, Cash Fringe is equal to $7.35*42=$308.70.
This is a lot of information, but it gives you a look into how each Cash Fringe Method of Calculation is computed.
It is a matter of preference as to which method you choose for each Craft/Class Template. If you need any assistance setting up prevailing wage in your Vista system or help in determining which cash fringe calculation is right for your company, please visit our website at constructech.io and book a call with one of our payroll consultants.
Prevailing Wage Calculation Methods for Cash Fringe Benefits
When utilizing PR Craft Classes or PR Craft Class Templates in Vista for Prevailing Wages there are five different calculation methods to choose from for the fringe benefit. They are as follows:
• Standard – A calculation method that uses the Prevailing fringe benefit to determine the Overtime total prevailing wage rate.
• Cash Fringe Factored – A calculation method that allows the fringe to be paid at an overtime rate, along with the pay rate. Both the Prevailing basic hourly rate and cash fringe rate must be factored to determine the Overtime total prevailing wage rate.
• Generous Fringe Benefit Package #1 – A method of calculation which allows companies with higher fringe benefits and lower wages than the prevailing wage package to properly calculate fringe, including overtime. This uses the employer’s Fringe Benefit Package Rate (both bona fide and cash) to determine the Overtime total prevailing wage rate. Cash Fringe is considered part of a “Generous Fringe Benefit Package” the moment the employer opts to pay an employee less than the prevailing basic hourly rate.
• Generous Fringe Benefit Package #2 – This method of calculation allows for companies with higher fringe benefits than the prevailing wage package to properly calculate fringe, including overtime. This uses the employers Fringe Benefit Package (bona fide ONLY) to determine the OT total prevailing wage rate. Cash Fringe is NOT considered part of the “Generous Fringe Benefit Package” under this option.
• Constant Fringe Benefit Rate – Straight time cash fringe will remain constant, and the same constant rate will be included in the employee’s hourly rate regardless of the earnings factor for overtime. This calculation method has been associated with packages where employees’ actual earnings were typically stronger than the prevailing wage hourly rate but often associated with bona fide fringe benefits.
We normally suggest using the Standard calculation method, but when it doesn’t produce the desired result, an employer should look at the other methods available for calculating the cash fringe. I decided to test an example of each calculation method and provide the results below. Often it is easier to understand the behind-the-scenes calculations when presented in this way. The results are provided below with the hope that it will clarify how the different options calculate fringe and help you to decide what’s the best option for your company. Keep in mind that each craft/class or craft/class template can have a different calculation method.
For examples of the Standard, Cash Fringe Factored, Constant Fringe Benefit rate calculations below please note the following:
• Prevailing wage basic hourly rate = $26
• Prevailing wage fringe benefit rate = $15.35
• Employee hourly rate = $34
• Employer paid fringe benefits = $0
• Employee worked 42 hours (40 straight time and 2 hours overtime).
For examples of the Generous Fringe Benefit Package # 1 & #2 please note the following:
• Prevailing wage basic hourly rate = $26
• Prevailing wage fringe benefit rate = $15.35
• Employee hourly rate = $25
• Employer paid fringe benefits = $35 total ($35/42) = .83
• Employee worked 42 hours (40 straight time and 2 hours overtime).
Standard Method
As you can see in the Payroll Register below, there are two lines for the cash fringe calculation, one for the Straight time hours and one for the Over-time hours.
The formula to calculate the Straight time fringe for this example is (($26*1) +15.35 fringe)) - (($34.00*1) +$0)) = $7.35 cash fringe per straight time hour ($7.35*40 =$294.00).
The formula to calculate the Overtime fringe for this example is (($26.00*1.5) + 15.35)) – (($34*1.5) +0)) = $3.35 cash fringe per overtime hour ($3.35*2) = $6.70.
Cash Fringe Factored
As you can see in the Payroll Register below, there are two lines for the cash fringe calculation, one for the Straight time hours and one for the Over-time hours.
The difference in this calculation from the Standard Calculation method is that BOTH the prevailing basic hourly rate and the cash fringe rate must be factored to determine the Overtime total prevailing wage rate.
The formula to calculate the Straight time fringe for this example is (($41.35) – ($34+$0)) = $7.25 cash fringe per straight time hour ($7.25 *40 =$294.00).
The formula for calculating the Overtime fringe for this example is ($41.35 -$0) = $41.35 which is the prevailing cash earnings. Multiply the ((41.35*1.5) +0) – (($34*1.5) +0) = $11.03 ($11.03*2=$22.06).
Generous Fringe Packet #1
The formula to calculate the Straight time cash fringe for the Generous Fringe Benefit Package #1 is as follows (($26*1) +15.35) – ($25*1+.83) =15.52.
And calculating Overtime is as follows: ((26*1.5) +(15.35+15.52)) – ($25*1.5) +.83) = $25.81.
The straight time rate would be $15.35 – ($35/42) = $14.52. This would be the rate for both Straight time and Overtime because the $26 +$25.81 = $51.81 is greater than the max amount of $41.35 prevailing wage rate.
Therefore the Cash Fringe is $14.52*42 = $609.84.
Generous Fringe Packet #2
The formula to calculate the Straight time cash fringe for the Generous Fringe Benefit Package #2 is as follows (($26*1) +15.35) – ($25*1+.83) =15.52.
And calculating Overtime is as follows (26*1.5) +.83) – (($25*1.5) +.83)) = $1.50.
The straight time rate would be $15.35 – ($35/42) = $14.52. This would be the rate for both Straight time and Overtime because the $26 +$1.50 = $27.50 and is less than the max amount of $41.35 prevailing wage rate.
Therefore the Cash Fringe would be $14.52*42=$609.84.
Constant Fringe Benefit Rate (C)
The calculation for the Constant Fringe Benefit Rate (C) is ($26.00*1+15.35) – (34.00*1+0) =$7.35. The rate of $7.35 is used for both Straight time and Overtime hours.
Therefore, Cash Fringe is equal to $7.35*42=$308.70.
This is a lot of information, but it gives you a look into how each Cash Fringe Method of Calculation is computed.
It is a matter of preference as to which method you choose for each Craft/Class Template. If you need any assistance setting up prevailing wage in your Vista system or help in determining which cash fringe calculation is right for your company, please visit our website at constructech.io and book a call with one of our payroll consultants.
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