Acc chapter12 afinal


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Acc chapter12 afinal

  1. 1. Chapter 12 – Preparing Payroll Records <br />
  2. 2. Chapter Objectives<br /><ul><li>Complete a payroll time card
  3. 3. Calculate payroll taxes
  4. 4. Complete a payroll register and
  5. 5. an employee earning record
  6. 6. Prepare payroll checks</li></li></ul><li>Essential Chapter Terms<br />Employee earnings record: a business form used to record details affecting payments made to an employee<br />Medicare tax: a federal tax paid for hospital insurance<br />Net pay: the total earnings paid to an employee after payroll taxes and other deductions<br />Pay period: the period covered by a salary payment<br />Payroll: the total amount earned by all employees for a pay period<br />Payroll register: a business form used to record payroll information<br />Payroll taxes: taxes based on the payroll of a business<br />Salary: the money paid for employee services<br />Social security tax: a federal tax paid for old-age, survivors, and disability insurance<br />Tax base: the maximum amount of earnings on which a tax is calculated<br />Total earnings: the total pay due for a pay period before deductions<br />Withholding allowance: a deduction from total earnings for each person legally supported by a taxpayer, including the employee<br />
  7. 7. Salary<br />Salary- The money an employee is paid for their services<br />Usually used in conjunction with weekly, biweekly, semimonthly, or monthly earnings. <br /> Can be used interchangeably with “wages”<br />Pay Period- The period covered by the salary payment.<br />Payroll- To the business this is the combined amount of the earnings between all employees combined.<br />
  8. 8. Sample Employee Time Card<br />Alaska +8Hrs= 1.5 time<br />California +8Hrs= 1.5 time<br />+12Hrs= 2 Time<br />Colorado +12Hrs=Premium Pay<br />
  9. 9. Total Earnings- The total amount paid to the employee during the pay period. This is a “gross” amount (as opposed to NET) which means that it is before any deductions or taxes are taken from the paycheck.<br />
  10. 10. $alary<br />Net<br />Income Tax<br />Social Security Tax<br />Medicare Tax<br />
  11. 11. So why is it so important to give an accurate amount of allowances?<br />If you claim too few allowances it will be nice when you get your return because you will probably get a refund. BUT….There is an opportunity cost to this money. You are giving the government a 0% interest loan on this money.<br />If you claim too few allowances you will probably have to pay when you file. Not only this, nut if the difference is high enough you can get charged interest for the money owed.<br />
  12. 12. IRS Form W-4<br />
  13. 13. So I make $10 and hour and worked 40 hours. My check should be $400 right??<br />Federal Income Tax<br />See tables-Need 3 bits of info<br />Gross income  Remember the net example<br />Marital status <br />Number of allowances claimed<br />State Income Tax<br />3% to 5% effective 1/1/11<br />Drops to 4% on 1/1/2015…..<br />
  14. 14. Social Security Tax Base<br />Contribution and benefit bases, 1937-2011<br />Year Amount<br />
  15. 15. So I make $10 and hour and worked 40 hours. My check should be $400 right?? Continued…<br />FICA (Federal Insurance Contributions Act)<br />Social Security tax<br />6.2% of gross earnings up to tax base<br />Medicare tax<br />1.45% of gross earnings (no tax break limit)<br />FICA is paid by both the employee and the employer<br />
  16. 16. Payroll Register<br /><ul><li>Separate payroll register for each pay period</li></li></ul><li>
  17. 17. Accumulated Earnings is the sum of the lime above it, plus the Total Earnings from the same line as the blank you are filling in.<br />When calculating Accumulated Earnings, you use Total Earnings. You do NOT, NOT,NOT, NOT, NOT, NOT, NOTuse Net Pay.<br />We are expressing the wages that have been EARNED, not what was deposited by each employee<br />
  18. 18. +<br />=<br />