Salary and fringe encumbrances

Salary encumbrances are commitments for labor that is not yet actual, or have yet to be incurred. You can encumber salaries on grant-funded projects to assist in planning expenditures over the life of the grant.

Encumbered salaries reduce the amount of available budget, which makes automatic budget edits more accurate. When you process labor distribution, the salary encumbrance for each project is reduced and the actual salary cost for the pay period is incurred. You can use this to accurately track encumbered salaries, actual salaries, and available budget at any point during the life of the project.

A fringe encumbrance rate is a percent that is used to calculate the fringe commitment that is based on an employee’s encumbered wages.

To create encumbrances for labor, you must create an assignment for a project employee for a specific date range. Include the committed effort percent and fringe burden code if applicable. The period planned distribution lines are adjusted as required. You can run salary encumbrance for an individual employee or for a group of employees.

Salary and fringe encumbrances are relieved when the labor distribution for a period is run.

Note: The Encumbrance Option of the system code for Grant Management must be set to Track in the finance enterprise group. Grant Management salary encumbrance amounts do not perform budget edit check nor are reflected in the BudgetGroupTotal amounts used for budget checking. Budget Edit Templates should not be created for salary encumbrance or labor distribution. Salary encumbrance amounts are reflected in GLCommit and General Ledger Total cube encumbrance amounts for reporting and tracking if system code GM is set to Track.