Short-Term Employee Benefits
Definition: Short-term employee benefits include:
- Absences. Compensated absences where payment is settled within 12 months of when employees render related services, for example, vacation, short-term disability, jury service, and military service.
- Base pay. Wages and social security contributions.
- Nonmonetary benefits. Medical care, housing, cars, and various subsidies for other goods or services.
- Performance pay. Profit sharing and bonuses payable within 12 months of when employees render related services.
The entitlement to compensated absences can be accumulating or non-accumulating. An accumulating compensated absence is carried forward and can be used in future periods. An accumulating compensated absence can be vesting, so that employees are entitled to a cash payment for unused entitlement when they leave the entity. If an accumulating compensated absence is nonvesting, then employees do not receive such a cash payment when they leave the entity.