Personnel costs
In the life of a company, personal expenses related to work represent the totality of items charged to the profit or loss, P&L.
In order to be able to judge who to hire, in what form and at what salary, as the manager of a company, we need to know what additional costs and expenses are incurred by employing that person in addition to the salary. To do this, it is essential to get to know the meaning of terms related to personal expenses.
Based on the accounting rules, in the profit and loss statement, each different cost must be shown as expenditure, namely in the following breakdown (these are the so-called cost categories):
- material costs (cost of materials, value of services used, value of other services);
- personal expenses (labour cost, other employee benefits, employee contributions);
- depreciation;
- other costs;
- own work capitalised.
Among personal expenses, we record the costs related to the participants in the work of our company. The participation itself can take several legal forms: it can be like this
- employment relationship,
- agency relationship and
- membership relationship as well.
The labour cost itself hides several costs of different types, it has three main groups
- the labour cost,
- other employee benefits and
- employee contributions
The labour cost includes all expenses charged on the basis of contracts and legislation between the parties. These are the gross wages, bonuses, bonuses, wage allowances due to employees and agents, as well as sums taken as consideration for the personal contribution of the owner (member) of the natural person.
Other employee benefits include the employee's benefits in excess of the wage cost, based on the employer's legal requirements or at its own discretion. Other employee benefits include, among others, the sick leave fee, the reimbursement of expenses related to going to work, the reimbursement of housing expenses, the per diem fee for the assignment, the representation costs, the meal contribution, the severance pay, the insurance premium for the employee.
Employee contributions are amounts to be paid in the form of social contribution tax, vocational training contribution, and all other taxes that need to be determined on the basis of labour cost, other employee benefits, and the number of employees.
Last edited: March 15, 2023