Employer payroll contributions — Accounting glossary

Employer payroll contributions are amounts the employer must pay in addition to gross employee earnings, such as employer social-insurance or pension contributions under the applicable arrangements. They increase staff cost or qualifying production cost and create a liability until remitted. The contribution base and rate can differ from those used for employee deductions.

Worked example

Gross pay is $5,000 and an employer contribution is 10% of that amount. Additional employer cost and liability are $500, giving total staff cost of $5,500.

Common mistake

The employee’s net pay is not reduced by the employer’s own contribution merely because both amounts are paid to the same scheme.

Where it appears in your exams

Qualification	Exam	Relationship	Period
ACCA	F1	Direct	July 2027–August 2028
ACCA	F2	Supporting	July 2027–August 2028
ACCA	K1	Direct	July 2027–August 2028

Related terms

Employee deductions
Gross pay
Payroll liabilities
Staff costs

Also called: Employer contributions, Employer social contributions