HR, Payroll & Staffing Knowledge Center
Explore our verified library of HR, Payroll & Staffing transactions. Every entry is reviewed for IFRS compliance and real-world accuracy by our technical accounting team.
Temporary Staffing Revenue — Gross Recognition (Firm is Principal, Bears Employment Risk)
Recording temporary staffing revenue on a gross basis — the staffing firm bills the client at the bill rate and separately records the temp worker's wages as cost of services, because the firm is the employer of record bearing all employment risks.
Permanent Placement — Contingency Search Fee (No Fee If No Hire)
Recognizing permanent placement fee revenue only when a candidate is hired and starts employment — with the variable consideration constraint reflecting the replacement guarantee period.
Retained Executive Search — Upfront Retainer and Completion Fee (Multiple Milestones)
Recognizing retained executive search revenue across three milestone tranches — retainer at engagement, progress payment, and completion payment — each tied to a distinct performance obligation.
Managed Service Provider (MSP) — Program Management Fee Revenue
Recording MSP revenue — where a staffing firm manages all of an enterprise client's contingent workforce spend across multiple staffing suppliers, earning a percentage of total managed spend.
Recruitment Process Outsourcing (RPO) — Per-Hire Fee and Monthly Subscription Revenue
Recognizing RPO revenue — where a firm takes over an enterprise's recruiting function, earning a monthly management fee plus a per-hire fee for each position successfully filled.
Professional Employer Organization (PEO) — Gross vs. Net Revenue Determination
Analyzing PEO revenue recognition — determining whether the PEO recognizes gross billing (full client payroll + service fee) or net service fee only, based on whether the PEO is the principal employer bearing actual employment risks.
Contract-to-Hire Conversion Fee — Revenue When Temp Worker Converts to Direct Employee
Recognizing a conversion fee when a client directly hires a temporary worker the staffing firm had placed — the contractual fee for converting from the staffing relationship to a direct hire.
Workers' Compensation Self-Insurance — Actuarial Reserve for Open Claims
Establishing and maintaining an actuarial reserve for workers' compensation claims on a self-insured program — the most significant liability management item for large staffing companies.
State Unemployment Insurance (SUI) — Experience Rating and Rate Management for Staffing
Accruing state unemployment insurance taxes on temporary worker wages — with the unique experience rating dynamics of staffing companies, who face among the highest SUI rates due to the inherent high turnover of the temporary workforce.
ACA Employer Mandate — Health Insurance for Temps Working 30+ Hours (Staffing Firms)
Accruing health insurance cost and potential ACA penalty exposure for temporary workers averaging 30 or more hours per week — the most significant regulatory compliance cost change in staffing since the ACA's enactment.
Gross-to-Net Payroll — Withholding Liabilities and Net Pay Disbursement
Recording the complete payroll cycle — gross wages earned, all withholdings (federal/state income tax, FICA, benefits, 401k, garnishments), net pay disbursed, and employer-side tax accruals.
Accrued Wages — Period-End Accrual for Wages Earned but Not Yet Paid
Accruing wages earned by employees in the current period but not yet paid due to the timing mismatch between period-end and the next scheduled payday.
Paid Time Off (PTO) / Vacation — Accrual as Earned and Liability for Unused Balances
Accruing PTO and vacation liability as employees earn it — with the liability representing the obligation to pay employees for earned but unused vacation that must be paid upon termination.
Annual Bonus Accrual — Probability-Weighted Estimate of Year-End Bonus Expense
Accruing the estimated bonus obligation throughout the fiscal year — using the expected value of bonus payments based on current performance vs. targets.
401(k) Employer Match — Accrual and Deposit to Plan Trustee
Accruing the employer 401(k) matching contribution as employees make their deferrals — recognizing the expense when earned and depositing to the plan trustee within regulatory deadlines.
Employer Health Insurance — Self-Insured vs. Fully-Insured Premium Expense
Recording employer health insurance costs — either as monthly premiums on a fully-insured plan or as claims expense plus stop-loss on a self-insured plan — the largest employee benefit cost for most employers.
Severance — One-Time Termination Benefit (ASC 420) vs. Ongoing Benefit Arrangement (ASC 712)
Accruing severance for a workforce reduction — distinguishing between a one-time termination plan (accrued when plan is communicated) and an ongoing benefit arrangement (accrued when termination occurs).
Workforce Restructuring Charge — Accrual at Communication of Plan (ASC 420)
Recording a formal workforce restructuring charge — the total cost including severance, benefits continuation, outplacement, and other termination costs — recognized when the plan meets ASC 420 recognition criteria.
FLSA Wage & Hour — Overtime Back Pay Liability for Misclassified Workers
Accruing a liability for unpaid overtime claims arising from employee misclassification as exempt from FLSA overtime requirements or from independent contractor status — a significant contingent liability for staffing and gig economy companies.
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