Wage Expense

The wage expense in a company’s income statement is the sum total of what employees are paid in a given period. Companies can have a single expense line covering wages (to people paid on an hourly rate relative to how many hours they work,or relative to how many units they produce) and salaries (those paid a set annual amount), or they can have separate lines for each. In a manufacturing context, wages paid to employees directly engaged in the manufacturing process are allocated to Cost of Goods Sold.