Dear members,
We are running a textile industry in Africa. My query is regarding Salary & Wages. I have to separate Direct and Indirect Salary for Costing purpose. In the payroll slip we have following payheads:
Earning side: Basic Pay, Housing Allowance, Transport Allowance, Food Allowance, Bonus, Overtime, Night Shift Allowance, Arrears (if any),
Deduction side: Pension Fund, Income Tax, Loans & Advances, Union Fees
My query is, if I have to separate Direct Labour for costing purpose, then from the earning side, which pay head should I take, i.e. just the Basic Pay or all the allowances also. Allowances are same for factory workers and admin staff.
And please also let me know that if I have to take allowances also, in the accounting software (tally) should I open two separate ledger accounts for all pay heads? e.g. Basic Pay (Direct) and Basic Pay (Admin), Housing Allowance (Direct), Housing Allowance (Admin), Transport Allowance (Direct) & Transport Allowance (Indirect).....and so on..
An early response shall be highly appreciated.
Thanks in Advance.
Ajay Singh
CAclubindia
