Question

Calculate compensation of employees from the following data:

	(₹)
(i) Wages and salaries in cash	20,000
(ii) Free accommodation by employers to employees	4,000
(iii) LIC premium paid by employees	500
(iv) Employers’ contribution to P.F.	2,000
(v) Income tax paid by employees	5,000

Answer 1

To estimate the Compensation of Employees, we include:

Included items (₹):

Wages and salaries in cash = ₹ 20,000

Free accommodation by employer = ₹ 4,000

Employer’s contribution to Provident Fund (P.F.) = ₹ 2,000

Excluded items (₹):

LIC premium paid by employees = ₹ 500

Income tax paid by employees = ₹ 5,000

Compensation of employees:

= 20,000 + 4,000 + 2,000

= ₹ 26,000