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
mojor elements of cost sheet

1. Why does rent control result in a shortage of rental units. 2. How does price elasticity of demand affect how much of a tax is passed on to the consumer and how much is absor


What type of activity could a company engage in to improve their cash flows in their Cash Flows Statement? Is this ethical? Could borrowing money make the cash from operations be

The following information relates to Araceli Manufacturing Company: total estimated manufacturing overhead cost at beginning of year $864,000 predetermined overhead rate (based

a)     Company X is expected to maintain a constant 7% growth rate in their dividends, indefinitely. If the company has a dividend yield of 4%, what is the required return on their

The following details are available from a company:                                                  2003                 2004                                      2003

material ledger card.following transactions affecting material No115-8 occurred during march 1992. march 1 balanced on hand 500 gallons@Rs.20 per gallon maech 2 received 1200 gall

Use a selected company or your current work environment to identify at least one cost or expense that would fit under each of the following categories: • Variable • Fixed • Mixed •

Importance of Variance Analysis Variance analysis is aimed at getting practical pointers to the purposes of off-the -standard performance hence management can improve operatio