With larger companies, manufacturing firms, or any company that has divisions the payroll accountant will often be asked to allocate the expenses for payroll to the departments. There are two ways to do it. The straight percentage - for example three departments in the company so each department gets 1/3. Or the departmental classification method - the number of employees is totaled and then the payroll is divided by that with each department receiving the payroll associated to the number of employees it houses.

What are some advantages or disadvantages to each for planning purposes? How can shared employees create a challenge?