Budgeting salary is important to determine when a company should start recruiting staff and what salary to offer to the successful candidate what won’t burst your budget.
Different companies employ different ways of budgeting salary. There is really no hard or fast rules on budgeting salary method as long as the objectives are achieved.
From my experience, using excel spreadsheet is one good way of budgeting salary. In fact, I been using excel to do my budgeting for years. I find that the easiest way to budget salary is to start with the company organization chart when you can find an overview of the total headcount.
Example
For example, a new company aims to employ 52 headcounts during the first year of operations. The company gives you below organization chart which was prepared by the Manager – Human Resources.
Supporting the organization chart, you are given a table on the staff recruitment plan as below.
| Month 1 – employ 1 general manager, 1 manager and 1 secretary. |
| Month 2 – add 1 manager, 2 officers, 2 clerks and 1 despatcher. |
| Month 3 – add 2 managers, 3 officers and 2 clerks. |
| Month 4 – add 5 officers, 1 clerk and 1 despatcher. |
| Month 5 – add 10 officers, 5 clerks and 2 despatchers |
From the information received, you start to prepare the budgeting for the salary cost.
1. First you tabulate the staff recruitment plan in the excel spreadsheet as follows:
2. The you estimates the average salary of each positions and tabulated the cost into the bottom of staff recruitment plan table as below.
If you cannot see the above table clearly, you can download the excel spreadsheet here.
3. With this salary budget, you can incorporate the salary numbers into your operating budget report.
I hope this post will help be informative and helpful to you.
