Understanding Employee Compensation and Payroll Concepts
Understanding Employee Compensation
Contributions are considered accruals, which are amounts received by the worker for various reasons, independent of salary and not listed under social security.
Pay and Base Salary
Pay encompasses all the worker’s economic earnings in cash or in kind.
The base salary of the worker is fixed by a unit of time or work.
Pay Supplements
Pay supplements are added to the basic wage and are set according to various circumstances.
- Personal Accessories: These are based on personal conditions, such as seniority, language skills, and titles received by the worker that have been valued by the company.
- Workplace: Compensation depends on the professional activity in the assigned post or the quantity or quality of the work developed, such as nocturnal shifts and responsibility.
- By Quantity or Quality: These are supplements the worker receives for their stock or amount of work, including incentives, attendance and punctuality bonuses, and overtime.
- Maturity Period: This includes extra payments and participation in benefits.
- In Kind: This refers to compensation received by workers in goods other than money, such as housing, vehicles, payments for maintenance, lodging, tourism travel, and loans with interest rates below the statutory rate.
- Residence: This compensates for providing work in a particular place.
Deductions
The employer is obliged to make deductions to the employee from the compensation paid, such as personal income tax withholding.
Contribution Basis
This includes common contingencies, employment contingencies, vocational training, and overtime contributions.
Income Tax Retention
The employer deducts a monthly amount from the worker’s salary, which is subsequently paid into the treasury.
Accruals Excluded from Contribution
These lack legal consideration as salary and do not contribute to the general regime of social security.
Supplemented Allowance
This is financial compensation for expenses incurred by the employee as a result of their work.
- Currency Shortage: Compensates for economic damage caused by errors in their post.
- Tool Wear: Covers wear and tear of working tools.
- Work Clothes: Covers the cost of working clothes when the worker acquires them.
- Travel Expenses: Offsets the costs for doing the work on the go.
- Travel Allowance: Irregular compensation for meals away from home.
- Distance Plus: Amount received when the worker is a given distance from home.
- Transport Plus: Amount levied on increased fares for urban transport.
Transfer Awards
- By Transfer: For a worker transferred to a distinct population of residents.
- By Suspension: Of the contract, treated as amounts paid and non-wage compensation.
- Fringe Pay: Any amount perceived.
Allowance for Contribution
- Transport plus
- Allowances
- Travel Costs
- Currency breakdown, work clothes
- Canteen service or restaurant voucher
Social Security Benefits
These are amounts paid to the worker through the institute of social security for a number of reasons.
Total Payroll
This section is intended to include all earnings perceived by the employee during the time covered by wage statements.