Wages and salaries

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In the national accounts, in accordance with the System of National Accounts, wages and salaries are the sum of remuneration paid to employees, including the values of any social contributions, income taxes, etc., payable to employees. For administrative convenience, or due to a legal requirement or some other reason all or a part of such payments may actually be withheld by the employer and paid directly to tax authorities, etc., on behalf of the employee. However, labour-related expenses of a business, such as payroll taxes, pension fund contributions, social insurance schemes, workers compensation insurance, etc., are not counted as wages and salaries for national accounts purposes. Similar concepts apply to general accounting treatment of labour expenses.

Wages and salaries are typically paid in cash (or cash equivalent, such as by cheque or by direct deposit into the employes' bank account) or it may be paid in various other ways, including remuneration paid in kind in the form of goods or services provided to employees instead of, or in addition to, remuneration in cash (SNA 7.32-7.42).[1]

Wages and salaries in cash consist of such amounts payable at regular intervals, such as weekly, monthly or other intervals, including payments by results and piecework payments; plus allowances, such as those for working overtime; plus amounts paid to employees away from work for short periods (e.g., on holiday, sick leave, etc); plus ad hoc bonuses and similar payments; plus commissions, gratuities and tips received by employees.

Wages and salaries in kind consist of remuneration in the form of goods or services that are not necessary for work and can be used by employees in their own time, and at their own discretion, for the satisfaction of their own needs or wants or those of other members of their households.

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