What is the wage fund, what does it include and how is it calculated

Remuneration of labor is the main mechanism for regulating labor relations and a powerful incentive for personnel to be interested in the quality of the work performed. Employee salaries are one of the main expenses of any company. Therefore, the solution of issues related to the formation of the wage fund (payroll) should always be under the control of the company’s management, while being resolved in a timely manner and in favor of the staff. The article will focus on the value of the payroll, its difference from the payroll, structure, calculation procedure.

What is a wage fund?

The wage fund is the funds of the enterprise, which are calculated to pay staff for the services rendered to them for a certain time period. The amount includes not only wages, but also additional bonuses, allowances, compensations from various sources of funding.

With the help of the payroll fund, they analyze the costs of paying remuneration to employees of various structural divisions, regulate, optimize, adjust rates, salaries, and rates. It is from this amount that all payments provided for by the current legislation are accrued: contributions to social, insurance funds, pension contributions, etc. Therefore, the payroll is not only a mechanism for the rational distribution of company funds, but also a tool to stimulate and encourage its employees.

This amount is regulated not only by organizations, but also by legislative acts, so any employee has the opportunity to independently find out what is included in the payroll and calculate its value.

What does the FOT include?

To calculate the total amount of expenses for the payment of wages to personnel, the wage fund is calculated, the structure of which includes the following data:

  • wages accrued to employees, regardless of their job duties;
  • if the payment for the work of employees is accrued in the form of manufactured products, then the cost of this product is included in the calculation;
  • all incentives accrued to employees in the form of monetary remuneration;
  • if free meals are organized for employees of the company, then the fund will include the funds that are allocated for it;
  • allowances for the performance of work without a break, for length of service;
  • funds accrued as compensation for sick leaves or absenteeism through no fault of employees;
  • allowances for payment to employees transferred to lower positions;
  • funds allocated for travel, accommodation for workers working on a rotational basis;
  • funds for salaries of employees of third-party organizations or individual entrepreneurs providing various services;
  • funds for the payment of pensions if the employee had to retire due to a special situation (for example, an industrial injury was received, which caused disability before the employee reached the retirement age provided for by law).

The following amounts are excluded from the calculation:

  • dividends;
  • loans issued to employees without accrual of interest for the use of funds;
  • social benefits accrued and paid from the state budget;
  • bonuses given to personnel for quality work throughout the year;
  • any kind of financial assistance;
  • compensation due to rising prices.

Also, the calculation does not take into account one-time or non-permanent payments, funds that employees receive from insurance funds.

Differences between payroll and payroll

Despite the similar wording between these two indicators, they have one fundamental difference:

  • the size of the payroll includes the amount of accrued wages and social benefits for a certain time period;
  • The wage bill includes the amount of earnings (salaries, allowances, bonuses, compensations related to working conditions) minus social payments for the same period of time. That is, all those amounts that are due to the employee for the time actually worked and the work performed.

The difference will be clearer if we give a specific example:

In November 2017, the enterprise accrued 500,000 rubles, payments for this month amounted to:

– 300,000 rubles – wages for the period from October 15 to October 31, 2017;

– 130,000 rubles – the amount of the accrued advance payment to employees for November 2017.

Thus, the payroll amounted to 500,000 rubles, and the wage bill – 430,000 rubles.

The two indicators may coincide in value with each other in those enterprises where there is no incentive for employees in monetary terms or any other incentive, while only wages are paid. Then, when planning the current and future expenses of the company, only payroll is taken into account. It is a broader concept and includes the amounts of all accruals, including the payroll fund (FZP).

The formula for calculating the annual payroll

At the enterprise, the accounting department is engaged in the calculation, but if desired, any employee can independently calculate the value of this indicator.

All employees who calculate the payroll should be aware of the documents and rules on which this indicator is determined. The size of the payroll is directly affected by the remuneration system that exists in the organization.

The following factors are taken into account:

  • salary amount;
  • the size of the tariff scale;
  • rates for piece work;
  • various allowances and bonuses.

The calculation is based on data obtained from the following documents:

  • payrolls for the year, which reflects all payments made by the enterprise for all employees without exception;
  • timesheets. Responsible persons are responsible for maintaining this documentation. It is they who enter in the time sheets the number of hours actually worked, as well as missed and overtime hours worked;
  • staff list for all employees, which indicates tariff rates, salary increments, performance indicators, etc.

There is no standard formula for calculating the annual fund. However, to determine the value of the indicator in numerical terms, two methods are used:

FOT g \u003d Szp * H * 12 , where

FOT d – annual wage fund;

Szp – the average salary at the enterprise for a certain time period (year);

H – the average number of all employees of the enterprise.

To obtain the average wage, the sum of all payments that have been accrued and paid to staff is divided by 12 months.

FOT g \u003d (Zg + Dd) * K , where

Zg – wages accrued to employees for the year;

Dd – additional payments and other incentives for staff;

K is a fixed coefficient for enterprises operating in the regions of the Far North or in areas close to it.

The formula for calculating the monthly payroll

To determine the monthly fund, a modified formula for finding the annual indicator is used:

FOT m \u003d Szp * H , where

FOT m – monthly wage fund;

Szp – average salary per month;

H – the average number.

A conscious and balanced approach when planning the activities of any enterprise is the key to stability and successful development in the future. Payroll is one of the most important financial indicators, the correct calculation of which will become a fundamental factor in predicting labor activity and developing a set of measures aimed at stabilizing the company’s balance sheet.

Since the fund is formed by enterprises that are independently engaged in their own financing, when planning and calculating this indicator, it is necessary to separately allocate funds for the formation of reserve funds. Such events will help not only to repay debts to the staff but also to reserve the remaining excess funds.

Conclusion

Thus, remuneration is a multifactorial concept, including many different elements, the action of which is aimed at setting wages and rationalizing the expenditure of the organization’s funds. Therefore, when forming a payroll, it is important to take into account not only the interests of the company but also all employees, as well as the specifics of the company’s activities.

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