Staff costs
Staff costs include gross employee earnings and the employer’s own related contributions and other employment costs required by the facts. Employee deductions are already included within gross earnings and must not be added again. Most staff costs are expenses, but qualifying production labour can form part of inventory conversion cost. Record costs when the employees provide the service rather than only when wages are paid.
Worked example
Gross earnings of $20,000 plus $2,000 employer contributions give $22,000 staff cost. Employee deductions of $4,000 change the payees, not that total.
Common mistake
Net wages alone understate staff cost; gross wages plus employee deductions overstate it.
Where it appears in your exams
| Qualification | Exam | Relationship | Period |
|---|---|---|---|
| ACCA | F1 | Direct | July 2027–August 2028 |
| ACCA | F2 | Direct | July 2027–August 2028 |
| ACCA | F3 | Supporting | July 2027–August 2028 |
| ACCA | K1 | Direct | July 2027–August 2028 |
Related terms
Also called: Employee costs, Employment costs