Employee benefit Expenses doesn't include........
Answer & explanation
Correct answer: option 3
The correct answer is Option (3) → Interest paid on Deposit
Employee benefits expense covers everything a company spends on its employees, such as salary, wages, leave encashment and staff welfare. Interest is a cost of borrowed money, so it is shown under Finance costs, a separate head in the Statement of Profit and Loss.
Option (1) Salary and wages in Kind — Part of employee benefits expense. Salary paid in kind instead of cash is still a payment to employees.
Option (2) Leave encashment — Part of employee benefits expense. It is payment to an employee for leave not taken.
Option (4) Staff welfare expenses — Part of employee benefits expense. Canteen, medical and similar facilities are spent on employees.
NCERT (2026-27 edition):
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