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Basic Accounting Principles of Human Resources Management (H.R) for your company



Cost of labor in construction companies


?How do you manage human resources or the affairs of your company's accountants

The financial part, the cost of personnel affairs in your company is as follows:

  1. Salaries and wages
  2. Social Security
  3. End of service benefits
  4. Provision for leave allowance
  5. Provision for ticket allowance
  6. Health insurance, which we will learn through the article explaining how to calculate the cost and accounting treatment for each item


?How to configure the accounting guide and link it to the cost of labor

The system used in construction companies is classified as end of service allowance, leave allowance, ticket allowance, social insurance and health insurance in the accounting manual under a main account. General and administrative expenses are considered as indirect expenses and can not be allocated to a project while the cost of salaries and wages can be classified under types General and administrative expenses - operating expenses - production expenses - equipment expenses ... etc

?How to deal with the cost of payroll accounting

Employees' salaries:- represent a significant percentage of the company's expenses up to 95% of the expenses in the cases of maintenance 

and operation companies, where the activity of these companies depends primarily on the supply of labor


:-There are basic data that the employee affairs officer should be interested in recording from such data as

  1. Nationality: - It is important to prepare social insurance in the Gulf system where the law distinguishes between the Saudi citizen and foreign in terms of insurance rates as well as nationality is important in proving the eligibility of tickets where prices vary from the other country
  2.   Sections: - where the company sets a list of work for each section, for example overtime in the administration hour by hour, while additional hours for project management and technical office clock hour and a half
  3.   Job site: - Important in the case of the establishment of accounting guidance where the cost of the employee on the project in which he works

Name

Nationality
Location
Department
Salary
Allowances
Hassan Fathy
Egyptian
Sanitation

Projects Management
4,000

500

Mobark Al Qahtani
Saudi
Public Administration

financial management

6,000

600

Murad Khan Mahano
Indian
Sanitation

The Technical Office

1,000

300

Cost of salary = (basic salary + allowances +  Extra.a + bonuses deductions -  Delay.a - Absence.a)

Company Regulations

Before calculating the cost of salaries, we must address the list of employees in the company, where through the list is determined all the necessary conditions for the calculation of the cost of each item of the cost of salaries such as the number of working days of the month will be fixed to 30 days per month or according to the actual days of the month as well as working hours approved For each section, the end of service list, the resignation list, etc.

What is the difference between 30 or actual days in the cost of absence, additional and delay instead of dividing the salary by 30 will be divided by 31 or 28 days, but it is preferable to install the number of days of the month 30 days


You can watch the video to learn how to prepare a list of personnel



Cost of salary = (basic salary + allowances +  Extra.a + bonuses deductions -  Delay.a - Absence.a)

Assuming that the list of the project management department to which Hassan Fathi belongs is calculated absence, additional and delay on the total salary (basic + allowances) calculated absent hour hour and a half hour and an additional hour two hours - the number of days of the month 30 days

 

Employee attendance data during July 2019

Name
Absence
Delay
Extra
Bonus
Deduction
Hassan Fathy
5

3

15

150

50

Mobark Al Qahtani
0

10

0

0

0

Murad Khan Mahano
2

5

25

250

0


Cost # Hassan Fathi


Cost of absence   = total salary / number of days of the month × days of absence × rate of absence


   1,125  = 1.5  ×   5  ×  30 ÷ 4,500 =                                      


  Delay cost             = total salary / number of hours per month × delay hours × delay rate


84 =  1.5  ×   3  ×   240 ÷ 4,500 =                               

                                

Cost of overtime  = total salary / number of hours per month x overtime hours x rate


563  = 2  ×  15  ×   240 ÷ 4,500 =                               

                             

(The cost of salary Eng/ Hassan Fathi = (basic salary + allowances +  Extra.a + bonuses deductions -  Delay.a - Absence.a


 3,954 =   1,125  -  84   - 50 - 150  +  563 +    500  +  4,500  =                                                                  

       


Payroll for July 2019




?What is the accounting guidance for salaries

Notes the cost of employee Mubarak Al-Qahtani 6,107 pounds was paid a salary on the general and administrative cost center of public administration because the location of currency during the month of July in the General Administration or the rest of the employees 5,604 pounds were charged to the sewage project


Tax earning work: - Assuming that there is a tax earning work was deducted from Hassan Fathi for 197 pounds

How the tax was calculated according to the Egyptian law you can watch the video

Video explain how to calculate the tax earning work


Payroll statement after deduction of earning work tax


Tax on earning work: - Does not affect the cost of salaries, but their impact is on the accounting direction and the same idea in the case of deducting part of the advance of the employee does not affect the cost of salaries, but their impact on accounting guidance only



Social insurance: has been deducted the insurance share of the employee Hassan Fathi 595 LE How social insurance was calculated and you can watch the video will show you how to calculate the insurance under the law of Saudi Arabia, Egypt and Kuwait


Video explain the social insurance account


Social Insurance:- by Law part is borne by the company and part borne by the employee is deducted from his salary, the best way is to prove the entitlement to the monthly insurance for the benefit of social insurance and charge them to the company and exclude the value of insurance deducted from the cost of salaries of employees in order not to recur


Record salaries after excluding insurance


Statement of employee insurance in accordance with Egyptian law

According to the Egyptian law, the insurance body, whose share is 40% of the fixed, 35% of the variable,This percentage is borne by the employee, part of his salary deducted, but in the end the cost of insurance is fully recognized as an expense to the company and the cost of salaries is reduced by the amount of the employee's liability

?How to calculate insurance under Egyptian law


Basic Salary
Variable salary

Company Acc

Employee Acc



Fixed 26% 

Variable 24%
Fixed  14%
Variable zz
4,000

320

1,040

77

560

53



1,117

593


?How to calculate insurance under Saudi law

Saudi social insurance 18% for Saudi 2% for foreigners borne by the company in full for Saudi laborers bear the company 9% and employee 9%

(The cost of insurance is calculated from the value of (basic salary + housing allowance

Share of Saudi labor              = total salary + housing allowance x 9%

Share of foreign labor           = total salary + housing allowance x 2%

Employee share Saudi labor = total salary + housing allowance x 9%


Accounting guidance for monthly insurance


An explanation of the HR system is available