How to Record Foreign Service Premium
Records the additional compensation paid to employees for working on international defense contracts in high-risk or remote locations.
| Account Name | Type | Debit ($) | Credit ($) |
|---|---|---|---|
| Direct Labor - Foreign Service Premium | Debit | 4,500.00 | - |
| Accrued Payroll | Credit | - | 4,500.00 |
💡 Accountant's Note
Foreign service premiums are allowable costs under FAR 31.205-6 if they are consistent with established corporate policy and meet reasonableness standards.
Practitioner & Systems Framework
💻 ERP Architecture
Set up a unique pay element in the payroll system to map specifically to the allowable premium labor account.
⚠️ Audit Flags
Premiums exceeding the Department of State Standardized Regulations (DSSR) maximum rates.
📄 Required Documentation
Employee assignment letter and the DSSR rate table for the period of performance.
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Discussion & Community Questions
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