4.04 Definition:
Wages and salaries in kind consist of goods and services, or other benefits, provided free or at reduced prices by employers, that can be used by employees in their own time and at their own discretion, for the satisfaction of their own needs or wants or those of other members of their households. Those goods and services, or other benefits, are not necessary for the employers' production process. For the employees, those wages and salaries in kind represent an additional income: they would have paid a market price if they had bought these goods or services by themselves.
4.05 The most common are:
4.06 Goods and services, or other advantages, should be valued at basic prices when produced by the employer, and at purchasers' prices when purchased by the employer (that is, the price actually paid by the employer).
When provided free, the whole value of the wages and salaries in kind is calculated according to the basic prices (or purchasers' prices of the employer when purchased by him) of the goods and services, or other advantages, in question.
When provided at reduced prices, the value is given by the difference between the calculation explained above and the amount paid by the employee.
4.07 Wages and salaries do not include:
(1) allowances or reimbursement of employees for travelling, separation, removal and entertainment expenses incurred in the course of their duties;
(2) expenditure on providing amenities at the place of work, medical examinations required because of the nature of the work, supplying working clothes which are worn exclusively, or mainly, at work;
(3) accommodation services at the place of work of a kind which cannot be used by the households to which the employees belong – cabins, dormitories, huts and so on;
(4) special meals or drinks necessitated by exceptional working conditions;
(5) allowances paid to employees for the purchase of tools, equipment or special clothing needed exclusively, or primarily, for their work, or that part of their wages or salaries which, under their contracts of employment, employees are required to devote to such purchases.
Such expenditure on goods and services that employers are obliged to provide to their employees in order for them to be able to carry out their work is treated as intermediate consumption by employers.