Wage Fund: structure, payroll planning

An entrepreneur who establishes an employment relationship with an employee is required to hire him for a certain amount in the form of wages. The employer is obligated to make payments in favor of their employees, taking into account benefits, surcharges and bonuses. Moreover, the composition and structure of the wage fund is regulated within the company.

The essence of wages

Salary is the amount that is allocated as employee benefits. It can also be called monetary compensation, established depending on qualifications, complexity of work, quality and conditions of implementation. It is documented in a labor agreement.

Payroll should contain the following elements:

• employer's name;
• the period to which the calculation relates;
• interest payment date - according to this date, social insurance contributions and taxes are calculated;
• payroll number or name;
• signatures of people preparing the calculations;
• all constituent elements, including taxes and bonuses, other deductions.

Concept and concept

In each company, one of the most important elements is the payroll (payroll) fund. It includes data on wages from personal cards of employees and data on the monthly amount of monetary compensation.

Under the payroll understand the total values ​​of remuneration to employees of the company, acting as the costs of the company in kind.

There is no clear definition of payroll in legislation today. However, in the Tax Code of the Russian Federation there is an article on salary expenses in a company (Article 255), which can be used to determine this category. The payroll must contain such information as data on the composition of payments to the employee (base payment, bonuses, allowances, remuneration, etc.).

The need for payroll is caused by the following factors of significance of employee benefits:

• by salary and tariff rate;
• surcharges and bonuses;
• awards for hard work;
• additives for skilled labor;
• allowances for the results of labor;
• other amounts.

Sources of payroll at the enterprise are:

• cost of production;
• own funds of the employer;
• targeted financing.

The size of payroll may change throughout the year under the influence of factors: changes in the number of employees, the dynamics of staff time and tariff rates.

Functions Performed

The main functions of the payroll are:

1. Social. This is creating a good working climate and conflict prevention. Performing this function, the organization ensures the payment of remuneration to each employee for a full day. Remuneration must not be lower than the minimum amount established by law. Wages must also avoid falling real costs. This fact can cause discontent and weaken the motivation of employees to work due to the possible deterioration of their financial situation. The social dimension is presented in an attempt to prevent deep income inequality, which can lead to increased poverty and exclusion.
2. Costly. When managing wages, a cost function is implemented, since remuneration is the cost of the employer. Cost reduction in individual enterprises determines the competitiveness of the economy.
3. Profitable. In relation to the employee, remuneration corresponds to the profit function. Salaries of employees make up income. Therefore, the employee is interested in maximizing the amount of remuneration.
4. Motivational. It is carried out using four prerequisites: salary encourages people to get a job, ensures stability in the organization, helps to achieve high results and encourages employees to develop their skills, which leads to the development of the company and achieving maximum results.

Composition characteristics

Structure, as a set of elements, largely depends on the wage system itself. It is a set of rules governing payments. The payroll structure implies that the remuneration represents payment for work already completed or advance payments for activities that the employee will carry out only in accordance with the previously agreed terms of the contract.

The reward system may be twofold: fixed or variable. A constant (fixed) level directly depends on the results of the work of an employee, group or organization. The amount of variable remuneration depends on the direction of the changes at the basis of their formation. Factors influencing this size: individual or group work effects, financial results of the organization.

PHOT and its structure can be briefly described as fair, but at the same time competitive. Employees should feel that they are receiving a fair remuneration, and the employer should not bear unreasonable expenses for maintaining staff.

Internal structure

Analysis of the structure of the wage fund is a mandatory element of management in the company. In the process of such a study, the internal and external elements of the amount of payments are studied.

The main goal of the internal structure of payroll is to implement a stimulating function. However, the motivation should be determined not by the amount of payment itself, but by the fact that payments can be changed using the appropriate components:

• the main amount of the tariff;
• bonus;
• awards;
• commissions;
• share in profit;
• overtime value;
• functional additives;
• study grants and more.

However, effective compensation should not include all of these components. A structure to fully realize its function should be simple. Too much accumulation of various factors can negatively affect employee motivation. The output of this component into the system should be a direct reflection of the requirements established in the job description, and serve a specific purpose. Of course, all of the above components can be divided into several groups.

External structure

Since within the organization there are differences in positions, in the content of work, in productivity, salary should vary depending on the profession. The external remuneration structure serves to determine the differences and ratios in the amounts of payments. Tools for determining this structure is the wage system.

Analysis of the dynamics and structure of the wage fund allows us to distinguish among the main internal structural factors the following:

1. Salary distribution is the main range within the same category of position.
2. Subject gap - determines how many diverse positions can be in one rank of posts.
3. The average value is the arithmetic mean between the interval of payment within the same category of position.
4. Penetration - this factor determines how much a person can earn a basic salary in a lower or higher category than what is considered. In this case, it is worthwhile to establish such differences so that the positions are not too close. Diversity motivates to increase competencies, promotes promotion.
5. Payout policy - the company's decision regarding the level of salary in the company when compared with competing firms.
6. Increase in the rate - the amount by which the employee's base salary can be increased.
7. The top remuneration rate is the maximum level of the base amount that an employee in this category can achieve.
8. Low rate - the minimum level of basic payment that an employee can achieve in a given position.

In determining the factors in the organization, it should be borne in mind that they should be the result of an adopted general remuneration policy. It is also worth adding that the corresponding range of payments affects the implementation of the social and stimulating functions of payroll in the company. It happens that an unreasonably large gap can become a source of labor conflicts.

Structure formation

The wage fund and its structure can be briefly characterized by the process that creates the level of individual remuneration. This is the payout structure that defines the payroll components. These components are related to the contribution to the work (base amount), the effect of the work (bonuses, bonuses), the culture of the company, the needs of the staff (various benefits).

The general principle of the formation of the internal composition and structure of payroll is the simplicity and comprehensibility of the constituent elements. The main criterion for dividing into internal components that form the employee’s income is the goal set for the wage system, in particular, the relationship with the content of the work and its consequences.

Taking into account the many descriptions of literature in this area, as well as the variety of applied measures in the practice of companies (companies create their own payroll systems for their needs, freely forming the number and structure of payments to employees), it is reasonable to indicate a certain range of applied solutions. Effective remuneration, of course, should not consist of all the components presented. Each element should serve a specific purpose and should be a direct reflection of the requirements of the content of the work and the results of the action. Nevertheless, the payroll components can be grouped into several main groups, where the criterion for separation is the basis for their provision - the content of the work, its results, legal norms, and specific conditions.

1. Components of remuneration arising from the work performed, its requirements, level of results, work quality and qualification potential of the employee. This is the base amount, bonuses, awards for results and quality, a share in profit, commissions, packages, payment under civil law contracts.
2. Components arising from legal norms, working conditions, having the nature of social benefits. These are various allowances provided for by the Labor Code of the Russian Federation (overtime work, night work, burdensome conditions, etc.) and allowances (payment of leave, incapacity for work, etc.);
3. Elements arising from the individual characteristics of the company and internal conditions: anniversaries, internships, functional additions, various types of benefits, the thirteenth salary, etc.

Sample composition and structure

The table shows an example of the composition and structure of the payroll

Formation Rules

Among the basic rules of the dynamics and structure of the wage fund can be identified:

1. Material reward is the basis for meeting the needs of the individual. The amount should be set so that management can expect a special attitude, behavior, results, quality of work or individual development from the employee.
2. The components should be appropriately and rationally related to the type of work and its results.
3. The system should correspond to the goals of the company, its strategy and market situation. In addition, it must be clear and legible so that a person knows what he is actually rewarded for.
4. Payroll must depend on the situation and condition of the enterprise. Motivation of workers should increase not only due to wages, but also due to employment. However, the salary must be attractive enough to hire qualified employees. The payment system should be connected with the general and personnel strategy.
5. The amount of remuneration should be related to the results of work and its consequences. Discrepancies in this matter may lead to discontent.
6. Too much fragmentation of the internal structure and unclear criteria for awarding payments create confusion on the part of employees.
7. Differentiation by level, components and forms of payment as a result of performance appraisal.
8. The system must comply with the law and organizational culture of the company.

However, in order for the above principles to take effect, two things must be taken into account when building the structure of the general payroll:

1. Internal system consistency. It should be objective and fair, due to which it will guarantee the stability of employment, increase the willingness of employees to develop and motivate them to work.
2. External competitiveness. The remuneration should be attractive in relation to the salary in other companies, which will help to attract new employees.

Tools for shaping

Each company has its own payroll policy, which provides the appropriate resources and proper distribution, allowing the appointment of a remuneration system. However, the basis for determining the structure of the wage fund at the enterprise is the allocation of appropriate tools for elements of the internal structure. These tools serve as a source of information necessary for determining the levels of payroll components.

The table shows the main tools for the formation of the structure of the wage fund.

Items

The structure of the general wage fund consists of a combination of the following elements.

1 component - the main salary, this is a fixed element of remuneration. The size is determined based on the payout tables of the company. The main amount is formed according to the competence, experience and responsibility of the employee. This is a reward for contributing to the work.

2 element: additional components (variables):

• bonuses are rewards for the effects of both individual and group work;
• remuneration - an expression of recognition of the employer to the employee;
• commissions - the amount for the employee’s participation in the company's turnover;
• special (one-time) payment - used when the bonus system is insufficient;
• benefits - relate to pension insurance, sickness benefits or health insurance;
• Privileges - a form of remuneration most often provided to employees in managerial positions (separation of a car from a company that covers telephone expenses);
• share in profit or in the capital of the company.

3 element - components guaranteed by the provisions of the Labor Code of the Russian Federation. Are required. They must be paid in the event of certain situations stipulated by labor legislation. These include:

• reward for downtime and willingness to work;
• for overtime work;
• allowance for night work;
• sick leave;
• during the period of annual leave.

According to another proposal, the components can be organized into four modules forming a complete package of payroll structure:

• fixed amount - includes basic payment, permanent allowances, overtime and legal allowances;
• short-term incentives are bonuses and rewards;
• long-term incentives - property influences, for example stocks, a share in profit or savings, for example, trust funds;
• additional benefits (benefits) - they include such material things as an official car, a discount on fuel, a service phone, housing and equipment; cultural components, for example, invitations to the cinema, theater, places of rest, for example, a swimming pool, a gym, etc.

All of these modules can be used in different ways in companies. Some of them may be absent altogether. It all depends on the business and organizational form of the company.

The first two modules can be called direct income, and the last two remain indirect in the payroll structure. Thus, the structure of the general wage fund consists of three main elements: basic wages, bonuses and benefits.