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What do the different concepts that make up payroll mean?

The payroll are documents delivered by an employer to his workers where a series of perceptions complex to understand, as well as the discounts that are practiced. For those unfamiliar with the payroll managementKnowing the payments of the contributions, as well as the concepts that are taxed or not to Social Security, can be quite complicated.

Payroll concepts you need to learn

Payroll must be adjusted to model established by the Ministry of Labor and they are the document that accredits the payment for the services provided by the worker to the employer. The latter is obliged to make and deliver payroll on a (generally) monthly basis, which is why they are also called salary receipts.

For any worker, the most important concepts to know in their payroll are the following:

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  1. Salary and non-salary accruals: the first pays for effective work (base salary, seniority, overtime, extra payments…), these are listed in Social Security and are taxed in personal income tax. With respect to non-wage earnings, they are received under certain circumstances, but they do not compensate actual work or rest periods.
  2. Deductions: the amounts that are subtracted from the gross salary of the payroll, to obtain the net salary.
  3. Base salary: it is the part fixed per unit of time or work for each professional group, it is established in the collective agreements.
  4. Salary supplements: they are paid for circumstances that have not been assessed when determining the base salary, they are regulated in agreements, laws or the employment contracts themselves.
  5. Perceptions of periodic expiration superior to the month. They can be extraordinary payments (two per year, at least); profit sharing (annual bonus established based on company profits); bonus (bonus linked to the fulfillment of marked objectives).
  6. Salary in kind or flexible remuneration. This includes the use, consumption or obtaining of goods, rights or services of the company for private purposes, free of charge or for a price lower than the normal market price.

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Non-wage earnings

Non-salary payments are the amounts that the worker receives in an employment contract, but they do not pay for the work itself or the rest periods, but rather issues such as compensation for expenses or indemnities. These amounts are not considered wages but are taxed in personal income tax and contribute to Social Security, except for some concepts as long as they do not exceed certain limits. These are some examples:

  • Benefits of the Social Security due to temporary incapacity due to an occupational or personal illness or an accident. Partial unemployment is also included.
  • Compensation and supplements, which are the amounts that the company pays the workers for expenses that they have as a result of their activity, for example travel expenses, maintenance, transportation bonus, fuel expenses, etc.
  • compensation due to layoffs, transfers, deaths, suspensions or terminations. Also included here are accidents and injuries to the worker due to a poor occupational risk policy of the company.
  • Improvements in the protective action of Social Security, which are perceived when companies improve conditions for maternity, temporary disability, risk during pregnancy, etc.

Definitely, payslips are complex documents that all of us who work in a company receive monthly. If we look closely, these have a lot of concepts with figures that practically nobody understands, but that are important because they are subject to taxes (or not) and influence when there is a problem, such as a sick leave or compensation.

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