Manufacturing wages

The term manufacturing wages describes the wages incurred in the production of products.

Definition / explanation

Production wages include all wage payments to workers who are directly involved in the manufacture of a product.

Manufacturing wages are thus part of manufacturing costs. This includes all wage payments for workers who work directly on the end product by hand or machine.

Personnel costs cleaning and warehouse work also contribute to the success of a production process, but are not part of the manufacturing wages.

Types of manufacturing wages

Production wages are divided into time wages, Piecework wages and the premium wage.

Time wages - In the case of time wages, a fixed remuneration per time unit is agreed - for example, remuneration based on working hours.

Piecework wages - If the wage depends on the number of items produced or the time required per item, then one speaks of piecework wages.

Time piecework - piecework wages can be structured in two ways: the rule is a piecework surcharge in addition to a basic remuneration (so-called time piecework).

Money chord - The second option is a pure piecework wage (the so-called money chord), in which only the amount paid is paid.

Premium wage - If a premium wage is paid, there is also a basic wage and an additional performance-related bonus.

The advantage and difference to piecework wages is the greater flexibility: A higher performance can not only be achieved through larger quantities, but also, for example, through economical use of materials or particularly good quality.

Summary

  • Manufacturing wages are wages paid to workers who are directly involved in the manufacture of a product
  • Types of manufacturing wages are time wages, piecework wages, and premium wages
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