Classwork Series and Exercises {Business Studies – JSS3}: Wages and Salaries

Business Studies JSS 3

Week 3

Topic: Wages and Salaries

Contents:

1. Meaning of wages and salaries
2. The roles of wages in office
3. Basic documents in the wages office

A. Meaning of wages and salaries

Wages

It is a fixed regular payment, typically paid on a daily or weekly basis, made by an employer to an employee, especially to a manual or unskilled worker. It is a payment made by business organization for work done or service rendered.

Wage payment is always based on

1. Piece rate: This is when a worker is paid based on the unit of output produced.
2. Time rate: This is when a worker is paid based on the number of hours worked

Salary

A fixed regular payment, typically paid on a monthly or biweekly basis but often expressed as an annual sum, made by an employer to an employee, especially a professional or white-collar worker.

It is however mandatory that an employer must pay his employee an agreed sum of money as wages or salaries for work done at an agreed interval.

The roles of wages department in an office includes the following

• They prepare and pay wages and salaries to workers at agreed regular intervals
• They keep the documents, cards and all other things relating to workers wages and salaries
• They keep the information about all the workers income tax obligations
• They keep good accounting records of all wages and salaries

Basic documents in the wages office

The basic documents the wages offices are:

• The personal wage or salary record book
• Individual tax cards
• The payroll
• The payslip or pay advice
• The time card where necessary

The payslip or pay advice: A payslip or pay advice is given to every employee at the end of each month. It is a piece of paper usually included in the pay packet of each worker. It explains how the net salary or wages of each staff is arrived at. The payslip is prepared from the payroll.

The payroll: It is a document which contains the list of all the employees in an organization with the amount of wages and salaries to be paid to each employee during a given period.

The payment voucher: A voucher is a device by the accounts department to record the sum of money drawn from the amount of money set aside for a particular purpose. The payment vouchers (PV) carries the following details

• Name and address of the issuing company
• Name and address of the person the organization needs to pay
• Date, particulars of payments, account to be charged and amount to pay
• Amount in words
• The name and signature of the chief accountant of the issuing organization
• Date received and the sum of money involved
• Signature of the receiver

Test and Exercise

1. All the following are the documents commonly found in the wages department except (a) stock record book (b) salary record book (c) payslip (d) tax cards
2. A wage paid based on the number of unit of product produced is (a) piece rate (b) time rate (c) location rate (d) advert rate
3. All the following are the roles of wages department except (a) preparation and payment of wages and salaries to workers (b) keeping of documents, cards and all other things relating to workers wages (c) supervising and marketing of products (d) all of the above
4. Payment vouchers carries the following details except (a) name and address of the issuing organization (b) name and signature of the chief accountant of the issuing organization (c) the job description (d) signature of the receiver
5. A payslip is always drafted from (a) payroll (b) payment voucher (c) payslip (d) payment book

For more class notes, visit: https://passnownow.com/classwork-support/