Documente Academic
Documente Profesional
Documente Cultură
I. Introduction
Listed in the following sections are the expense categories, definitions, and
prevailing market price of some of the most commonly used operating expenses to
serve as a guide in drafting your budget plan.
A. Employee Cost
B. Materials & Supplies
C. Repairs & Maintenance
D. Purchased Services & Utilities
E. Rent Expenses
F. Insurance
G. Taxes & Licenses
H. Depreciation & Amortization
I. Business Expenses
J. Miscellaneous
All expense items are clustered relative to its category and given its own respective
code to facilitate the charging of accounts.
This guideline is an updated compilation of relevant data and market price pertinent
to the development of the operating expense budgets. This guideline which covers
selected Character of Expenses (CHAREX) will provide Cost Center Administrators
(CCA) ready references aimed at facilitating preparation of their operating expense
budgets and ensuring uniformity of bases. Each of the selected CHAREX enumerated
below includes a brief description of its expense nature.
It is expected that each unit/department head prepares and submits the budget plan
according to CHAREX to Finance.
Note: These guidelines are for budgetary purposes only. The rates and provisions in
our company policy, in case of any difference from rates herein, shall prevail upon
actual consumption / utilization of budget.
Some budget items are to be indicated by Admin. However, estimates for project
activities may indicate their respective amounts as part of their projections.
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A. EMPLOYEE COST (Amounts will came from the HR. BA should inform the HR for
any requested additional employee. This is still subject for approval.)
1. Employee Compensation
This covers the straight-time daily pay for an eight-hour day’s work and/or the
rate for a monthly-paid employee without any premium or overtime pay.
Note: HR in coordination with payroll shall provide proposed budget for base
pay for all cost centers to Finance.
This covers the straight time daily pay for an eight-hour day’s work of an
employee employed directly by the company for a limited period of time or for a
specific project.
2. Other Compensation
This covers the cost of clothing uniforms that the company provides to its
employees. This shall be budgeted by HR under same cost center where the
employee’s base pay is budgeted.
This covers other authorized bonuses and allowances to employees which are
not classified under the specific accounts.
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1106 Night Pay (this shall be filled up by HR)
The company (in compliance with the Labor Code) provides 13 th month pay.
Expense incurred under this item include but may not be limited to food &
drinks, prizes & other materials, accommodation, transportation and other
expense incurred in relation to the conduct of the said activities.
This covers the remuneration to officers and employees for monetary equivalent
of their unused leave credits.
This covers amount of benefits not classified under the specific personnel
benefits account.
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This covers allowable expenses incurred by an employee, while attending
approved foreign and local manpower development and training programs. For
in-house trainings and seminars, cost of venue, meals, materials and
professional fees shall be charged to this CHAREX by the department
conducting the seminar. Travel expenses are chargeable to CHAREX
6101 - Local Travel. For foreign training programs, these will be subject to the
usual procedures to be validated by HR based on the training needs assessment
of the employee. Final approval of the foreign training will be secured from the
President.
Notes:
2. For foreign training and/or seminar, HR will provide the budget to Finance for
consolidation and control in appropriate cost centers. Attendance to foreign
training and/or seminars shall be subject to HR’s endorsement and President’s
approval.
This covers cost of gasoline, diesel, oil used in company vehicles and other
equipment.
Notes: Since the cost of oil and gasoline are very erratic, individual cost
centers may use the prevailing rates of fuel at their respective location.
The prices stated above are average and taken as of November 3, 2015.
2002 Lubricants
This covers costs of lubricants and greases used in the company vehicles and
other equipment.
This covers costs of tires, batteries and other accessories used in the company
vehicles and other equipment.
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Specifications Prices (PHP)
a. Radial Passenger Tires (Tubeless)
165/80 R-13 3,250
185/65 R-14 3,200
205/70 R-15 4,450
b. Commercial Tires (Tube Type)
6.4/6.5-13 4,587
7.5-14 5,716
c. Light Truck Tires (Cross Ply/ Bias Belted)
7.00-15 Lug type 6,115
7.00-15 Highway type 5,586
6.50 + 14 8 PR 4,716
8.25 + 16 14 PR 8,056
3. Accessories & Specialties (oil filter, engine flush, brake fluids, coolants, etc.)
This covers cost of gloves, safety shoes, hard hat, mask, safety goggles, etc.
This covers cost of stationery, office supplies. This excludes reproduction costs
(photocopying and mimeographing), micro-computer related supplies and
company official forms which are chargeable to CHAREX 4301, 2111, and 2112,
respectively, to be used by the office employees only.
Cost of calling cards shall be allocated in the department from which it was going
to use. Cost data shall be came from Business Development Department.
Suggested Formula: Computed at Php 3,000.00 per man per year or 2014
actual applied with 5% inflation, whichever is lower, or may opt to submit an
itemized list.
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Suggested Formula: Computed at Php 1,500.00 per man per year or 2014
actual applied with 5% inflation, whichever is lower, or may opt to submit an
itemized list.
This covers the cost of labor and materials in printing of forms included in the
company’s form register.
Suggested Formula: Use actual amount from 2014 applied with 5% inflation.
Company forms shall be charged under Cost Center 7351 (Admin).
This covers cost of drugs and medical expense budget of which is centralized to
Admin under Cost Center 7351.
This covers cost of materials and supplies not classified under any of the
CHAREX for “Materials and Supplies”.
1. General
These cover the cost of materials, labor and other expenses classified according
to the asset being repaired identified as follows:
Notes:
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b. Extraordinary or major repairs are matarial replacement of parts,
involving large sums and normally extend the useful life of the asset.
Such expenditures are usually capitalized.
2. Services rendered for particular R & M work, i.e. office building repair,
should be budgeted under the corresponding "R & M services" CHAREX.
Services include contract labor and equipment. For works where labor and
services cannot be segregated, budget categorization shall be under
“Services”.
3. Vehicle preventive maintenance – This is the change oil which include but
may not be limited to oil, filter, fuel filter, tune-up, spark plugs, lubrication
(transmission differential) and greasing.
These are fees and other incidental expenses such as fees and retainers of
appraisers; IT and other professional services.
This covers all expenses associated with the protection of company assets
budget of which is centralized to Admin under Cost Center 7351.
This covers cost of other purchased services that are not qualified to be
recognized from CHAREX 4001 to 4005.
2. Utility Expenses. This covers water and electricity to be budgeted and charged
to Admin.
Includes bottled water for office consumption and water billings in project sites.
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3. Communication Expenses
This covers the cost of domestic and overseas landline telephone calls including
calls to cellular phones.
Note: When making official calls to cellular phones, proponents are advised
to use a corporate cellular phone unit assigned to authorized employee instead
of a landline. Cell to cell call is cheaper compared to landline to cell.
This covers cost of cellular phone calls including domestic and overseas calls.
This covers the cost of having internet connections as part of the normal
operation of the business.
E. RENT EXPENSES
This covers the cost of renting office and building space, barracks including
temporary right of way, access road and other real estate, equipment, vehicle
and computer units to meet specific requirements on activities and programs
that could not be accommodated by available company-owned assets.
4505 Vehicle
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F. INSURANCE
This covers the cost of premium paid for insuring company assets against loss,
damage, theft, destruction, fire and injuries to persons.
Admin shall determine the required insurance provisions and will provide data
as to the amount of insurance premium chargeable and centralized to Admin.
This covers real estate and property taxes on land, buildings and improvements.
This covers cost of documentary stamp taxes paid for all negotiable instruments
and legal documents in the company’s name. Documentary stamp expenses not
related to tax shall be under CHAREX 6501 - Documentary Stamp Expenses.
This represents final tax on fringe benefits required under the new
Comprehensive Tax Reform Program.
Note: Payroll / Accounting shall determine and provide HR with the required
budget provision for inclusion in the annual budget.
For all company-owned vehicles, Admin shall provide budget based on the
following 2015 registration fees:
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Vehicle Age of Vehicles Smoke Emission Test
Type 1 - 5 years Over 5 years For Diesel/Gas Engine
(Php) (Php) (Php)
Light 3,000 3,000 500
Medium 4,000 3,000 500
Heavy 7,500 4,000 500
Depreciation Expense
Amortization Expense
This is the cost of using intangible assets that are computed based on
acquisition cost divided by its estimated year’s useful life. This include
amortization of computer software.
I. BUSINESS EXPENSES
1. Traveling Expenses
This covers expenses while traveling abroad on official business trip other than
foreign training. This includes cost of transportation (bus, taxi, boat fare, and
plane tickets), food, accommodation, personal allowance and other allowable
miscellaneous expenses.
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The Company sponsors and endorses membership in professional and trade
associations, civic organizations and social clubs which may contribute to the
professional and social development of qualified employee and redound to the
benefit of the Company. Membership in said groups should be maintained only if
the employee and his immediate supervisor can ascertain tangible results and/or
is actively engaged in said organization.
Note: The budget for the club memberships should be under the
proponents’ cost centers. HR to provide Finance the approved list of entitled
employees.
3. Representation Expenses
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Managers and up 500.00
Supervisors/Staff 300.00
Snacks 100.00
4. Advertising Expenses
This covers all expenses incurred in advertising in print, television, radio and
internet primarily to enhance business and commercial interest as well as public
and community relations.
6402 Advertising – TV
This covers all expenses incurred for company promotional items such as
Christmas giveaways including made to order promotional items and company
calendars.
5. Other Business Expenses (Budget shall be provided by Admin under their cost
center)
MISCELLANEOUS EXPENSES
1. Subscription Expenses
This covers cost of subscription, books, journals and periodicals. This also covers
the cost of bidding notices, legal notices, spaces in telephone directories and
electronic copies.
These are the cost of donations and contributions in a form of either monetary or
tangible items given to directly to persons, group of persons, or other
organizations. This does not include facilitation fees.
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3. Other Miscellaneous Expenses
This includes cost of pantry and household supplies, and other expenses that are
not qualified to be recognized in other accounts.
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