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Intro Payroll

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Intro Payroll

  1. 1. April 9, 2011<br />Prepared by Emily<br />AKA Emily Li<br />BKA EMLAMY<br />Accounting for Payroll<br />
  2. 2. What Is Payroll?<br /><ul><li> One of the largest expenses of a business
  3. 3. Compensation paid to employees for performing services for the business
  4. 4. Governmental regulations
  5. 5. More to payroll than just take-home pay</li></ul>To Do:<br /><ul><li> Lunch with Shanaynay
  6. 6. Make other friends
  7. 7. Clean the toilet
  8. 8. Meet SpongebobSquarepants
  9. 9. Skydive in Lodi</li></ul>♫ F is for friends who do stuff together, U is for you and me. N is for anytime and anywhere at all. Down here in the deep blue sea. ♫<br />
  10. 10. Payroll Deductions<br />Gross pay: total earnings of employee for particular payroll period<br />Take-home pay (net pay): amount of money employee actually takes home<br /><ul><li> Subtract deductions from gross pay</li></ul>Deductions consist of various taxes employer is required to withhold from employee’s pay<br />CHEM 118B:<br /><ul><li>Cycloaddition reaction: two independent pi-electron systems bond to form new ring of atoms
  11. 11. Whyyyyy</li></ul>The grass is greener on the other side.<br />
  12. 12. In order to withhold taxes from employee’s paycheck, employer must know some things.<br /><ul><li>Fill out W-4Form
  13. 13. Full name
  14. 14. Social security number
  15. 15. Home address
  16. 16. Marital status
  17. 17. Number of dependents
  18. 18. Signed and dated by employee
  19. 19. Information on W-4 Form used to determine deductions</li></ul>MAT 129:<br /><ul><li>Fourier transform:
  20. 20. E2πiθ
  21. 21. Guy next to me kind of smells..
  22. 22. U + Me = Us (Calculus)</li></ul>Jiāyóu<br />加油<br />
  23. 23. Typical Deductions<br /><ul><li>Social Security Tax (FICA)
  24. 24. Medicare Tax
  25. 25. Federal Income Taxes Withheld
  26. 26. State and Local Income Taxes Withheld
  27. 27. State Disability Insurance
  28. 28. Other Voluntary Deductions</li></ul>To Do:<br /><ul><li> Go to the bank
  29. 29. Open ING account
  30. 30. Roth IRA account
  31. 31. Learn about investing</li></ul>Kick some ass<br />
  32. 32. Social Security Taxes<br /><ul><li>FICA = Federal Insurance Contributions Act
  33. 33. Social Security tax is in two parts: Social Security (FICA) and Medicare
  34. 34. Monthly pension benefits paid to retirees, survivor benefits, and disability benefits
  35. 35. Applied to all employees
  36. 36. Employers are required to match employee contribution
  37. 37. Non-progressive (fixed amount withheld from paycheck, regardless of salary)
  38. 38. Ceiling on FICA tax, but no ceiling on Medicare tax
  39. 39. Social Security Tax (FICA)
  40. 40. Medicare Tax
  41. 41. Federal Income Taxes Withheld
  42. 42. State & Local Income Taxes Withheld
  43. 43. State Disability Insurance
  44. 44. Other Voluntary Deductions</li></ul>I cannot afford to waste my time making money.<br />~Louis Agassiz<br />
  45. 45. Federal Income Taxes<br /><ul><li>Pay-as-you-go tax
  46. 46. Not actually a tax  income withheld in anticipation of federal income tax
  47. 47. Submit income tax return in April for previous calendar year (January 1 – December 31)
  48. 48. Used to determine tax liability
  49. 49. Funds withheld by employer used to satisfy tax liability</li></ul>Amount withheld>Tax liability=tax refund<br />Amount withheld<Tax liability=you owe monies<br /><ul><li>Social Security Tax (FICA)
  50. 50. Medicare Tax
  51. 51. Federal Income Taxes Withheld
  52. 52. State & Local Income Taxes Withheld
  53. 53. State Disability Insurance
  54. 54. Other Voluntary Deductions</li></ul>After a visit to the beach, it's hard to believe that we live in a material world.<br />~Pam Shaw<br />
  55. 55. Federal Income Taxes….cont’d<br /><ul><li> Based on 3 factors:</li></ul>Earnings for the pay period<br />Marital status<br />Number of exemptions claimed by taxpayer<br /><ul><li> Progressive (more money earned, higher percentage of income paid in taxes)
  56. 56. Single people have less expenses than married people, so amount withheld from single person will be somewhat greater than married people
  57. 57. More dependents taxpayer claims as exemption, less withheld  lower tax liability
  58. 58. Social Security Tax (FICA)
  59. 59. Medicare Tax
  60. 60. Federal Income Taxes Withheld
  61. 61. State & Local Income Taxes Withheld
  62. 62. State Disability Insurance
  63. 63. Other Voluntary Deductions</li></ul>The real measure of your wealth is how much you'd be worth if you lost all your money.<br />~Author Unknown<br />
  64. 64. State and Local Taxes<br /><ul><li> Businesses may also be liable for state and local income taxes, depending on location
  65. 65. Taxing authorities publish withholding tax tables
  66. 66. Social Security Tax (FICA)
  67. 67. Medicare Tax
  68. 68. Federal Income Taxes Withheld
  69. 69. State & Local Income Taxes Withheld
  70. 70. State Disability Insurance
  71. 71. Other Voluntary Deductions</li></ul>I'd like to live as a poor man with lots of money.<br />~Pablo Picasso<br />
  72. 72. Disability Insurance Taxes<br /><ul><li> Many states have this program that requires employees to contribute a nominal sum each week to fund to program
  73. 73. Money collected is usually turned over to the state on a quarterly basis
  74. 74. Social Security Tax (FICA)
  75. 75. Medicare Tax
  76. 76. Federal Income Taxes Withheld
  77. 77. State & Local Income Taxes Withheld
  78. 78. State Disability Insurance
  79. 79. Other Voluntary Deductions</li></ul>When it is a question of money, everybody is of the same religion.<br />~Voltaire<br />
  80. 80. Voluntary Deductions<br /><ul><li> All the previous deductions were made by the employer, but the voluntary deduction is authorized by the employee
  81. 81. Examples: union dues, insurance premiums, payroll savings plans, charitable contributions, and supplementary pension plans
  82. 82. Social Security Tax (FICA)
  83. 83. Medicare Tax
  84. 84. Federal Income Taxes Withheld
  85. 85. State & Local Income Taxes Withheld
  86. 86. State Disability Insurance
  87. 87. Other Voluntary Deductions</li></ul>A big part of financial freedom is having your heart and mind free from worry about the what-ifs of life.<br />~SuzeOrman<br />
  88. 88. Calculating Employee Earnings<br /><ul><li>Employee: individuals who work directly for a business organization
  89. 89. Hourly rate basis (specific dollar amount per hour worked)
  90. 90. Commission basis (certain percentage given for the sale of a product or service)
  91. 91. Annual salary basis (fixed amount broken down into weekly, semimonthly, or monthly payments)
  92. 92. Independent contractor: an individual or a business not directly employed, but used by business only to do specific activities (a fee is usually paid and does not have the various deductions)</li></ul>To Do<br /><ul><li>Calculating Employee Earnings
  93. 93. Overtime Earnings
  94. 94. The W-2 Form</li></ul>A second reason why science cannot replace judgement is the behavior of financial markets.<br />~Martin Feldstein<br />
  95. 95. Overtime Earnings<br /><ul><li> Normal five-day workweek usually consists of 40 hours (six-day workweek consists of 48 hours)
  96. 96. Overtime = any hours worked in excess of employee’s normal workweek
  97. 97. Calculated at 1.5 times the regular rate of pay for each hour worked beyond normal workweek
  98. 98. e.g., Normal workweek is 40 hours per week. Employee worked total of 43 hours and is paid $6 per hour:</li></ul>To Do<br /><ul><li>Calculating Employee Earnings
  99. 99. Overtime Earnings
  100. 100. The W-2 Form</li></ul>Time is more valuable than money. You can get more money, but you cannot get more time.<br />~Jim Rohn<br />
  101. 101. The W-2 Form<br /><ul><li> At the end of the calendar year  report of the individual’s total earnings for the year
  102. 102. Document must be submitted along with income tax return</li></ul>To Do<br /><ul><li> Calculating Employee Earnings
  103. 103. Overtime Earnings
  104. 104. The W-2 Form</li></ul>You can only become truly accomplished at something you love. Don't make money your goal. Instead, pursue the things you love doing, and then do them so well that people can't take their eyes off you.<br />~Maya Angelou<br />
  105. 105. Now wasn’t this fun?<br />Uhh…<br />Accounting for Payroll<br />

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