Costs associated with direct labour, as well as the cost of direct materials, are used to calculate a company's prime cost.
"Total labour costs represent the sum of costs incurred by employers for employees' remuneration, recruitment and training, as well as social welfare services. They include both
direct labour costs and indirect labour costs, minus subsidies.
Direct labour costs include:
- Direct remuneration and bonuses: i.e. basic wages and salaries for time worked or work done; overtime; bonuses (of which, bonuses paid at each monthly pay period and bonuses paid at longer pay periods); additional payments (for noise, risk, difficult work, night work, work on Saturdays, Sundays and public holidays, shift work, etc.); wages and salaries in kind; and other payments considered as wages and salaries (13th or 14th month, holiday wages, etc.);
- Payments for days not worked: annual vacation, other paid leave, public holidays; paid vocational training time; and time off granted with pay due to employers' and employees' reasons;
- Payments to employees' saving schemes;
- Bonuses for being on call to work;
- Bonuses based on profit;
- Other direct costs: i.e. company products, cost of staff housing, company cars, etc."
(LABORSTA Internet,
Slovakia - 2, visited 2008-02-09)
