Personnel expenses refer to the remuneration made on the human resources employed by the company. On top of wages and salaries, remuneration also includes commission, perks, bonus, allowances, pensions, paid leaves, maternity and paternity leaves, reimbursements, disability benefits, insurance, etc.
Personnel expenses can be categorized into two components, they are:
- Payroll: This is the compensation paid to workers for the service they have provided. These include salaries and wages. A part of this remuneration is withheld for paying taxes and providing additional benefits to workers.
- Social security: The withheld portion of the remuneration is provided as social security benefits for the workers. These include healthcare benefits, retirement benefits, benefits for specially-abled, survivor benefits, etc.