Definition: Labour cost

ILO terminology

For the purpose of labour cost statistics, labour cost is the cost incurred by the employer in the employment of labour. The statistics concept of labour cost comprises remuneration for work performed, payments in respect of time paid for but not worked, bonuses and gratuities, the cost of food, drink and other payments in kind, cost of workers’ housing borne by employers, employers’ social security expenditures, cost to the employer for vocational training, welfare services and miscellaneous items, such as transport of workers, work clothes and recruitment, together with taxes regarded as labour cost.
Source:
International Labour Organization Resolution Concerning Statistics of Labour Cost Adopted by the 11th International Conference of Labour Statisticians, October 1966, § 3, quoted in Organization for Economic Cooperation and Development (OECD), "Measuring the Non-Observed Economy - A Handbook", OECD, Paris, 2002
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