Apply market research to generate audience insights. Measure content performance. Develop and improve products. List of Partners vendors. A wage expense is the cost incurred by companies to pay hourly employees. This line item may also include payroll taxes and benefits paid to employees. A wage expense may be recorded as a line item in the expense portion of the income statement.
This is a type of variable cost. Wage expenses are sometimes reported by department and they are most likely to be reported separately for the production department. This department is often the one with the most hourly employees. On the other hand, wage expenses for production workers may be incorporated into the cost of goods sold COGS item on the income statement.
Wage expenses vary from one period to the next, depending on the number of business days in the period and the amount of overtime to be paid. Business days vary from month to month and may be affected by the number of holidays during the period. After the holiday season, companies then may cut back on the number of workers when business is not as busy and the need for additional workers has gone. Under the accrual method of accounting , wage expenses are recorded based on when the work was performed.
In contrast, under the cash method of accounting, wage expenses are recorded at the time the payments are made. Wages payable is the line item that identifies how much in wages are owed to workers but have not yet been paid. It is a liability account. When a wage expense is recorded it is a debit to the wage expenses account, which requires a credit to the wages payable account for the same amount until the wage is paid to the worker.
Wages are typically paid to a worker in the pay period following the period in which the work was performed, so there is always a delay, which is reflected in the wages payable account.
A wage expense is an expense account that appears on the income statement while the wages payable account is a liability account that appears on the balance sheet. A wage expense has to at least be equal to the minimum wage dictated by the federal government or the state government. The current minimum wage in the U.
Many states have implemented minimum wages that are higher than the federal wage and employers in those states have to pay the higher state minimum wage. Many companies pay a higher minimum wage than the federal or state minimum wage. Wage and salary are often used interchangeably but they refer to different types of payments for employment. Wages most often refer to hourly pay. The worker is paid per hour for a set amount of hours per week.
If they go over the set amount of hours, then they are usually paid overtime. Journal Entries of VAT. Journal Entries of TDS. How to Pass Journal Entries for Purchases. How to Introduce Yourself in an Accounting Interview. Journal Entries of Loan. Most Difficult Journal Entries. Journal Entries of Sales. Accounting for Hire Purchase.
Latest from Svtuition. Contribute in Our Mission as Volunteer and Donation. Help Us Translate in your language. Salary noun The recompense or consideration paid, or stipulated to be paid, to a person at regular intervals for services; fixed wages, as by the year, quarter, or month; stipend; hire. Payroll verb transitive To place on a payroll. Salary verb To pay, or agree to pay, a salary to; to attach salary to; as, to salary a clerk; to salary a position. Payroll noun the department that determines the amounts of wage or salary due to each employee.
Salary A salary is a form of periodic payment from an employer to an employee, which may be specified in an employment contract. Payroll In treasury management, a payroll is the list of employees of some company that is entitled to receive payments as well as other work benefits and the amounts that each should receive. Popular Comparisons. Adress vs. Comming vs. Label vs. Genius vs. Speech vs. Chief vs. Teat vs. Neice vs. Buisness vs. Beeing vs. Amature vs. Lieing vs. Preferred vs. Omage vs.
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