Accounting for labour costs, Cost Accounting

Accounting for Labour costs

We will contain an overview of accounting for labour costs as:

a) Gross Earnings

It is illustrated as item A that appears like a credit in the wages account and like a debit in the wages analysis control. The gross earnings are analyzed to illustrate the several deductions leaving net pay and indirect and direct wages also are charged to a range of account codes

b) PAYE tax

It is illustrated as item C that is credited to a PAYE tax account before being paid to the US revenue Authority via the employer. Item X illustrates the payments from the bank account or credit and the clearing of the PAYE tax account or Debit

c) National Hospital  Insurance Fund or NHIF Deductions

The national insurance deduction of employee is credited to a national insurance account as Item D. In addition the employer creates a national insurance contribution for all employees. It is illustrated as item F that is debited to an expense account and credited to the national insurance account. Net insurance or D+F is paid to the national Inland Revenue. After that item Y illustrates the entries, which clear the national insurance accounts or Debit and record bank payment or Credit. The national insurance of employee is a business overhead expense.

d) Other deductions

It involves such items like pension contributions and trade union subscriptions. The initial deductions from employees are credited in deductions account or Item E before payment is created to the suitable fund.

e) Net pay

This is illustrated as item B that is the balancing figure in the wages account or debit and while payment is made, this is illustrates in the bank account or credit

f) Direct Wages

Item T illustrates the credit to wages analysis control and the debit to job or product accounts. Individual accounts would be maintained for all job or product in addition to overall control account.

g) Indirect Wages

This is a simple analysis transaction that is debited to overhead departmental account or expense accounts.

Posted Date: 2/5/2013 6:38:12 AM | Location : United States







Related Discussions:- Accounting for labour costs, Assignment Help, Ask Question on Accounting for labour costs, Get Answer, Expert's Help, Accounting for labour costs Discussions

Write discussion on Accounting for labour costs
Your posts are moderated
Related Questions
Manufacturing Concern to Organization There are three manufacturing centres as Making, Packing and Finishing.  These are supported through five support departments, namely Mai

Determine Difference between Results Using Marginal Costing and Absorption Costing The overhead absorption rate for product X is Ksh.10 per machine hour. All unit of product X

a factory operates a small canteen but its annual operation has consistently shown a loss:

Calculate the range of monthly financing rates for which the schedule of monthly cash flows is profitable: Month Cash Flow, $ -------------------- 0 -10,100 1 +23,000 2 -13,

Q. 1. The 31st December 2009 trial balance of Anika Co. reported the following information. Dr. Cr. Allowance for Bad Debts........................... $1,300 During the year 201

Traditional budgeting  systems are  incremental  in nature and  tend  to  focus on  cost  centres.  Activity-based  budgeting  links  business  planning  to  the  budgeting  proces

the following activities relating to indirect production costs: Activity Activity Costs Cost Drivers Machine Setup $180,000 1,500 setup hours Materials Handling $50,000 12,500 poun

Lapsol limited manufacture electrical appliances for the export market. The management of the company are considering investing in one of two possible capital expenditure projects.

ADescribe the impact of different types of standards on motivations, and specifically, the likely effect on motivation of adopting the labor standard recommended for Geeta & Compan