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Labor costs are usually the largest expense line-item in a nonprofit organization’s budget. Preparing a separate labor budget is key to building a realistic and achievable budget for the next fiscal year, as discussed in Budgeting for Salaries is Key to the Nonprofit Budget Building Process.

This labor budget worksheet will help you to view and manage the costs of staff salaries, employee benefits, and payroll taxes, show how these labor costs are expected to be allocated to programs, fundraising, and administrative (overhead) departments, and assist with aligning your organization’s budget with reporting requirements under generally accepted accounting principles (GAAP) and Form 990.

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Remembering the Long-Term Purpose of Operating Reserves