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There are two types of compensation that employees and directors can receive for providing employment services for pay as you earn purposes.

Two Questions:

1. Why is it important?
2. What are the compensations?

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Compensations:

1. Wages
2. Salaries

First Compensation: Wages

1. Short period
2. Low pay based on per hour or quantity of work
3. Not consistently employed.
4. Not on payroll
5. No other work compensation – no allowances, benefits, etc.
6. No compensation on leaving
7. low levels of education.
8. People do not move from their locality.
9. No fixed abode.

Second Compensation: Salaries

1. Long period
2. High pay based on per month
3. Consistently employed.
4. On the payroll
5. Other compensations while working – allowances, benefits, etc.
6. Compensation on leaving
7. High levels of education.
8. People move from their locality.
9. No fixed abode.

Above are some of the things to check to clasfy a compensation as either a wage or a salary.

Dr Wakaguyu

taxkenya@gmail.com