PAYROLL VARIANCE Definition

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PAYROLL VARIANCE is the difference between actual salaries and 'unloaded' labor expenditures. The largest contributing factor to payroll variance is usually employees not submitting project oriented timesheets, or supervisors failing to approve those submitted timesheets. The effect being wages being paid without direct assignment of labor charges to those areas or projects to which the labor hours were expended. Thereby causing a variance between recorded labor costs and actual payroll, e.g., project costs are not recorded, reimbursable costs are not billed, and program and project managers are unable to accurately monitor their budgets or do projections.

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