ACCOUNTING FOR

LABOR
Mañibo, Jaycel Anne M.
BSMA 2101
Labor is the physical or mental effort exerted by
individuals in the creation of a product. This includes all
salaries earned by employees in the factory.
Inclusion to labor costs:
• Basic salaries of workers
• Overtime pay
• Bonuses for exemplary performance
• SSS, PHIC, HDMF dues (employers share)
• Medical benefits and the like
Kinds of Labor
• Direct labor
• Indirect labor
Proper Costing of Labor

TIME TICKET

PRODUCTION
TIME CARD REPORT
Summary of Pay Information

Payroll is a calculation of all employees compensation,

statutory contributions, taxes, deductions , and net
payment for a certain period of time.
PAYSLIP is a document that explains the components of an
individual’s pay for a certain time period. It is a personal version
of a payroll register.
Considerations:
• A standard minimum wage can be paid to be an employee,
but can increase if a worker can produce more units.
• When jobs are rush, overtime pay is normally encountered
to cover the extra hours the worker has rendered.
• Working in a shift different from the normal 8-5:00pm shift is
paid a special premium rate charged to factory overhead.
• Workers are also paid during idle time.
Assume that an employee receives a daily wage rate of
P537. How much is the hourly rate if overtime is done..
Payroll Journal Entries