Wages
Accounting glossary · Understand, connect, apply
Wages are compensation for employees’ work, commonly calculated using hours worked, output or another agreed basis.
Example
An employee works 20 hours at an illustrative $15 per hour, earning $300 before overtime, bonuses or deductions.
Remember the difference
The employment arrangement and local law determine pay requirements. Wages should be recognized for service received even if payment is later.
Examples are simplified for learning. Where a term depends on US law, IFRS, US GAAP or a historical rule, check the context explained above and the requirements relevant to your course.
Study references: OpenStax financial accounting and managerial accounting. For reporting requirements, consult the applicable IFRS Standards or FASB guidance. US tax terms should be checked against the relevant tax-year IRS instructions.
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