Components of Compensation of Employees

Compensation of Employees Consists of Major two compnents

Compensation of Employees = Wages & Salaries + Employers Contribution of Social Security Schemes Let’s understand all Components of compensation of Employees. Here are the different components of Compensation of Employees.

Wages and Salaries in Cash:- It refers to cash paid to factor owners as reward for the work done during the period of accounting year. It includes all

1. Wages
2. Salaries
3. Bonus
4. Dearness allowances
5. Commission
6. City Compensatory allowance
7. House rent allowance
8. Leave traveling allowance

Wages & Salaries in Kind:- it includes all non-monetary payments as reward by employers to employee, such as

1. Rent free accommodation
2. free car
3. free medical
4. free educational facility for children
5. Free water, electricity
6. Free uniform
7. Free services of vehicle
8. Interest on interest free loan

Employer’s Contribution to Social Security:- It includes contributions made by employer for the social security of employees. it includes

1. Provident Fund
2. Gratuity
3. Labour welfare funds
4. Life Insurance
5. Casualty Insurance
6. Pension Schemes