Personnel expenses are all those items of expenses that are related to the company's personnel, whether direct or indirect.
In other words, it does not only consist of the salary and taxes that are passed on, but also of all the expenses paid by the staff to the company.
Types of personnel expenses
Within the personnel expenses themselves there is a brief classification of expenses that we can carry out. This depends on the form and purpose of the expenditure.
- Direct remuneration expenses. They are those expenses that end up being a direct income for the personnel or for the tax system.
- Indirect remuneration expenses. In this case, they are the set of expenses that are incurred passively.
- Mixed remuneration expenses. They are expenses that are caused by direct action of the personnel but they do not serve as compensation, but as compensation.
In general, all the expenses that the personnel may cause are included in one of these three groups. Although some expenses, if applicable, may belong to more than one group
Personnel expenditure in accounting
The accounting of the payment to any worker would be such that:
In this accounting entry we see how the company pays a worker € 1,250 gross, of which € 750 net goes directly to the employee's bank. The rest goes to withholding taxes for income from work and social security.
The example is a simple scheme that can vary according to the amounts that each country has around taxes, and the percentage applied or the number of deposits and withholdings can vary.
Examples of personnel expenses
Regarding the expenses that we can find, some that we can mention according to their type are:
- Salaries, commissions or deductions to the worker are some of the direct remuneration expenses.
- Passive commissions (from other people), social contributions or collective remuneration in kind (breakfast, gym, language classes, etc.), are some of the expenses that are included in indirect remuneration expenses.
- Compensation for the expense of gasoline, allowances, or other expenses that are not systematically included in the payroll, but that depend on the direct action of the worker could be derived from mixed remuneration expenses.
In the first place, we see how the expense is passed on directly to the worker by the mere fact of being an employee. Second, we see expenses that can be caused by the employee, even if he has not carried out almost any concrete action. Finally, thirdly, we see a series of expenses that are satisfied once the employee has carried out a specific action.Selling expenses