Find out how fringe benefits are impacted by PETs
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Questions?
For sponsored projects, please contact听your Grant Accountant if you need a journal entry completed to correct fringe allocations from PETs. For fringe adjustments to all other projects, please contact Bayley Trego, Cost Accounting Manager
What are PETs?
Payroll expense transfers (PETs) are after-the-fact transfers to move salaries between speedtypes, projects and within awards.
How might fringe benefits听be impacted by a PET?
When a regular payroll expense occurs, the charge to the salary account will trigger the fringe rate to be applied and charged to the correct fringe benefit account.
When a PET occurs, the charge to the salary account in the speedtype that pay is moving to, as well as the credit to the salary account in the speedtype the pay is moving from, will trigger the benefits to be applied to the new speedtype and subsequently removed from the old speedtype. However, you won鈥檛 see this effect on fringe benefits until allocations are processed at month-end close.
What is the historical process/impact?
Prior to FY26, the听system would automatically apply the current year鈥檚 fringe rate to the PET but if the payroll that was being transferred was from a previous fiscal year, the system would apply the听previous fiscal year's (FY) fringe rate. Because fringe benefit rates change each year, the benefit rate applied to a PET for salary that is two years or older could be incorrect.
For example, the FY23 benefit rate for regular faculty was 29.4%. If $100 salary that occurred in FY23 was moved through a PET in FY26, the system would apply the FY25 benefit rate of 31%. However, this would be incorrect as it would charge the new speedtype $31 in fringe and remove $31 in fringe from the old speedtype, when there was only $29.4 in fringe that needed to be removed and reallocated.听When this occurred, a journal entry was needed to adjust the fringe amounts.听
What is the new process in FY26?
When a PET is input, the听system will automatically apply the current year鈥檚 fringe rate to the PET and there will be a 鈥淧ET adj鈥 line item to adjust the fringe benefit to the appropriate fiscal year鈥檚 rate, if the date the salary expense was incurred is within the last 5 fiscal years. If a PET is entered for salary expense aged over 5 years, the benefit rate applied will be incorrect and require a journal entry.
For example, the FY23 benefit rate for regular faculty was 29.4%. If $100 salary that occurred in FY23 was moved through a PET in FY26, the system will now apply the FY23 benefit rate of 29.4% and no additional entries would be necessary.