Compensation Expenses

LAST UPDATED: January 6, 2012

What You Should Know

There are distinct rules, budget principles, and allocation methods that apply to compensation expenses as opposed to non-salary operating expenses. For example, employee benefits costs are charged automatically, without specific action by departmental end users. Other specific points are addressed below and here.

Salary Expenses

The University's Labor Accounting (LA) system distributes the costs to project grants for most regular employees’ normal compensation, such as regular 12-month salary, faculty 10-month academic year salary and summer salary, and biweekly employee salary.

Other forms of employee compensation such as overtime, casual hourly wages, and severance pay are not distributed by LA. The accounting information for these types of pay is entered in Time Collection or directly by the payroll department. For more information, see about Labor Accounting.

Project grant distribution changes for salaries must be done in LA or Time Collection; they should not be done on an II or EII. Likewise, when splitting salary costs between two departments, the best practice is to manage the shared salaries directly through LA or Time Collection.

Labor Accounting Default

Designated to record salary payments to individuals with incomplete project grant or other data, but for whom a legitimate salary obligation exists. Departments are responsible for moving all 1998 charges to the appropriate project grant as soon as possible. In no case may charges remain on 1998 at the end of the fiscal year. Contact: Franchesca Kim, Budget Office, (609) 258-9542.

The most widely used salary expense account codes are:

201 – Faculty
202 – Research Professional
203 – Technical Professional
204 – Administrative
205 – Biweekly B (non-union office support staff, paid on a biweekly basis)
206 – Biweekly A (lab and shop staff, paid on a biweekly basis)
207 – Casual Employees (temporary employees, no fixed work schedule)
208 – Student Salaries (Princeton undergraduate hourly pay, no employee benefits charged)
209 – Assistants in Instruction/Assistants in Research (no employee benefits charged)
210 – Purchased Labor
214 – Employee Benefits

Compensation for personal services from non-Princeton employees:
230 – Consultant / Honorarium
231 – Non-Individual Purchased Service
232 – Outside Temporary Labor 

Benefit Costs

Princeton has three employee benefits rates for:

  • Academic departments and programs
  • Non-Academic administrative departments
  • Princeton Plasma Physics Laboratory

The rates are calculated by the budget office each year and negotiated with the federal government. Benefits are automatically charged on non-student salaries to account codes 214, 314, or 514.

You’ll find current and projected rates under Employee Benefits Rate

Vacancy Savings (fund 10)

Vacancy savings are generated when the annual salary expense for a position is less than the budget appropriation for that position. Administrative departments may use their vacancy savings to hire temps, casuals, or consultants to perform the duties of the original position until the position is filled. Vacancy savings may also be used to cover overtime, accrued vacation, and severance payouts.

Vacancy savings consist of the adjusted salary budget, less salary expenses (account codes 201-210 and 214) less temporary labor and consulting expenses (account codes 230-232) that were incurred to fill vacancies in those project grants. You should charge the person hired to fill a vacancy to the same project grant where the original employee was charged/budgeted. In administrative departments, vacancy savings are returned to central funds at the end of each fiscal year.

To estimate vacancy savings:

  • Estimate regular salaries paid.
    • Run LA Commitments report for the project grant(s) that have approved salary budgets
  • Estimate salary expenses not included in the LA Commitments report such as OT, casual pay, undergraduate student pay, and one-time payouts such as severance or accrued vacation.
    • Run LA223 Paid Amounts report for YTD actuals, by earnings codes for the project grant(s) that have approved salary budgets
  • Estimate temp and consultant expenses being used to backfill a vacancy.
    • Run GL002 General Ledger Journal Detail for GL account codes 230-232 for the project grant that have approved salary budgets. Do not include temp and consultant expenses hired for special projects.
  • Subtract the total from your salary budget

Temporary Disability

In administrative departments, when an employee is out on short term disability, the salary and benefits are charged to the department for up to 26 weeks. During this time, temporary help may be needed to cover the responsibilities of the person out on disability. If you foresee this overlap as a potential budget issue, please discuss options with the budget office.
The short term disability HR policy can be found at:

For more information


Tel (609) 258-3080
Fax (609) 258-0442

Princeton University
Office of Finance & Treasury
701 Carnegie Center
Princeton, NJ 08540

Google Map
Princeton Shuttle


7 New South
Tel (609) 258-3080
Fax (609) 258-5040
Open Monday through Friday,
8:45 am — 5:00 pm


Customer service, cashiering,
check pick-up, financial system access


The General Ledger is your link to updates on people, policies, and other information related to financial transactions at the University.

Download Current Issue
Download Past Issues


How can we better serve you? Submit comments, questions, and ideas to our customer service department.