Info 1: wages payable definition
Info 2: how wages payable works
Info 3: wages payable vs compensation
Info 4: example of wages payable
Opening information:
wages payable breaks into two words wages and payable, wages means payment for workers, and payable means the amount which needs to be paid in the future.
wages payable means the amount of money that needs to be paid to workers, so now let’s have a look at what is wages payable, how the wages payable work in the public market, and what is the difference between wages payable and Compensation, finally one brief example about the wages payable.
Info 1: wages payable definition
Nowadays no business would run without any single amount of workers, for the reason they are the one root of the whole business.
This worker or employee would always receive the salary for their work, where such salary is not fixed it might increase or decrease based on their skill and experience.
Here the salary is what is named as wages, and such payment of salary from any business would be recorded as wages payable.
Many of the Industries that pay money to their employees work as a salary for having any kind of skills that are tracked as wages.
However this same concept would be applied to all public Corporations, so let’s dive into know how the wages payables involved and work in the public market.
Info 2: how wages payable works
Wages payable don’t represent any physical object or things, instead, it’s a accounting terms that are used and track the payment for whole employees of the whole public business or organization.
Wage are an amount, which would be anything but it’s the amount that one must pay the money to the workers of one business or Corporation for their wonderful work.
However, these wages payable are not paid amount because it’s a liabilities that need to be paid in the future for their worked or working employees.
If any business has hundreds and thousands of workers, where each worker has a specific pre-determined salary and the collection of all the workers’ salaries is concluded as wages payable in the balance sheet of the company on the liabilities side.
The one Industry that mines gold from under 100 feet of land, they used Normally 15000 employees in the whole factory, and their employees’ total payments for their work are categorized as wages payable.
Next one organization conducted and doing a huge work towards producing safe medicine drugs for dangerous diseases.
Normally demands 1800 humans for such wonderful work, 1800 people’s earnings are about nearly 86 million dollars.
Where these 86 million dollars are needed to be paid by such an organization, such payment of earnings is named as wages payable.
On the other hand, the technology business with 400 persons would provide the bonus once every Christmas reach for all their employees, where such bonus payments are accounted as wages payable.
At the same time, in one automobile industry when one person sells more cars than the average sales, then such Industry provides incentives, where that incentives are also characterized as wages payables.
So anything that is paid to employees for their work or services they are elaborated as wages payable, most people confuse the wages payable and compensation, So let’s jump into the key difference in it anyway.
Info 3: wages payable vs compensation
The difference between the wages payable and compensation is, that wages payable are the ones which are used for salary for their services, which are payable fixed period on each day month, or quarter.
On the other side, compensation means not a salary instead they are used to pay for top employees who face difficulties and challenges to run the companies or Industries.
And also the business pays compensation for them once they solve big problems.
So the key difference between the wages payable and compensation paid is compensation is not paid for a service of work regularly. To make you more clear about the wages payable, let’s look at one clear example below.
Info 4: example of wages payable
Say the company Had 1200 employees it’s a huge Industries which is worth 599 million dollars in a public market.
Where this industry pays 1.2 million dollars to the CEO to solve innovation problems and improvements plus a $100,000 salary every year for managing and running such an Industry, and 1199 employees receive payment for their services which have for their work from Company H.
Here the employee payment for salary came in wages payable, and the 1.2 million is considered as compensation for one employee.