LABOUR COST IN MALAYSIA 2016 Final Report - National Labour Cost Survey 2016 (F | Page 30

3.3
Total Labour Cost
Labour cost refers to the total cost incurred by the employer in the employment of labour. Total
labour cost includes wage and non-wage cost components.
Figure 3-10: Labour cost components
Wage cost is defined by cash payments related to payroll, which include:
1. Basic wage
Monthly gross salary prior to any tax deduction, which does not include allowances,
commission, overtime pay, bonuses, benefits, and other incentives.
2. Cash allowance
A sum of money paid regularly to employees, typically to meet specific needs or expenses.
For example, allowances for shift, meal, housing, transportation, cost of living, travel,
entertainment, telephone, etc.
3. Commission
A form of cash incentive which is usually linked to the level of sales achieved by
employee