[GNC] How do you record the rounding of your netpay?

[Adrien Monteleone]

Yep, this is the 'principle of materiality' in accounting.

The precision as to what is considered 'material' or not varies by 
entity, thus, some corporations don't even blink until a number gets 
into the $10k or even higher range.

My personal rule is that if the amount is worth less than how much I 
would get paid to find the error based on the time it takes, then I just 
record it as miscellaneous or cash over/short and move on.

In this particular case, I'm in agreement to just record what you 
actually receive as your pay. It isn't even a concern until the eventual 
final check which would be 'trued up' anyway.

Regards,
Adrien

On 1/27/24 5:31 PM, Patrick James wrote:
> In my view it's going to be very difficult to justify spending any time tracking a whole bunch of zeroes with a contra equity account. I would not even want to see that on the books, much less spend time every pay period adjusting the contra account balance to some new amount less than 1.
> 
> At the end, the final paycheck, I'm betting the final paycheck is also rounded up, so that over the entire life of employment, the maximum "extra" paid is under 1, with an expected value of around 0.50.
> 
> This is all just a bunch of zeros, and the cost to track it is less than the value of the information.