The FAR Allowability of Compensation Plans

The allowability of bonus and incentive compensation for government contractors is governed by the Federal Acquisition Regulation (FAR) and should not be ignored.

Bonuses can be a significant part of a firm’s overhead and the allowability is critical to its future revenue. However, even though allowability is important, it is necessary to get the most value for bonuses paid. A well-designed bonus and incentive plan can enhance individual performance and protect your future.

Wayne Owens and Kristi Weierbach provide an overview of the FAR bonus/compensation plan requirements and offer suggestions to get the most performance from your plan.

During this webinar, we’ll review:

• FAR requirements for allowable employee compensation
• Criteria to determine reasonableness and allowability
• Compensation plan best practices to meet requirements

Firms that contract with governmental agencies and include bonuses in their claimed compensation must follow FAR to ensure that the bonuses will be includable in their overhead rate as an allowable and reasonable cost. Making certain that your bonuses are allowable is important because your overhead rate can change significantly if you fail to follow FAR guidelines.