MALİYET VE YÖNETİM MUHASEBESİ

Wage is defined in the Labor Act of Turkey
Law no. 4857 by Article 32 as follows; “Wage
is, in general terms, the amount of money to
be paid in cash by an employer or by a third
party to a person in return for work performed
by him”

Below the elements of labor cost are listed;
• Basic Pay
• Week and Holiday Pays
• Overtime Payment/Premium
• Night/Shift Payment/Premium
• Production and Efficiency Premium
• Holiday Pay
• Allowances (ie. traveling allowance)
• Education and Training Payments
• Social Welfare Contributions
• Health Payments
• Severance Payments
• Social Security Premiums
• Unemployment Insurance Premiums

Salaries are fixed payments to employees for their performance and productivity working on a monthly basis.

Basic pay, overtime pay and production and efficiency payment are directly related to the actual work of the employee.

Direct Labor Costs:

There are three main methods to determine basic pay. Those methods are the time-based system, piece-based system (accord system) and premium-based system.

Under the time-based system, the important point is the time that employee spends at work. The
measure of time can be the hour, day, week or month. Under this system, productivity is ignored, only time is considered.

Piece Based System is also known as accord system.

Under premium-based system employee is
paid a basic wage and premium for his/her efficient work.

There are two main types of labor costs; direct
labor costs and indirect labor costs. Direct labor
costs are regulated under the account group 72 in
Turkish Uniform Chart of Accounts. Indirect labor
costs are accumulated in manufacturing overhead;
therefore, in Turkish Uniform Chart of Accounts
the account groups 73 and 74 are used for indirect
labor cost. Details of the accounts are as follows;
• 720 Direct Labor Expenses
• 721 Reflection Accounts for Direct Labor Expenses
• 722 Direct Labor Wage Differences
• 723 Direct Labor Time Differences
• 730 Manufacturing Overhead (General Manufacturing Expenses)
• 740 Cost of Production of Services