Payroll Chapter #13. Terms Salary – The $ paid to employees for the work they do. Pay Period – The period of time for which an employee is paid –Weekly.

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Presentation transcript:

Payroll Chapter #13

Terms Salary – The $ paid to employees for the work they do. Pay Period – The period of time for which an employee is paid –Weekly –Bi-weekly –Twice a month –Monthly

Section #1 – Preparing Payroll Time Cards 1.Calculate Hours Worked a.Calculate the # of hours in the morning to the nearest quarter hour b.Calculate the # of hours in the afternoon (to the nearest quarter hour c.Calculate the # of “overtime” hours worked d.Add the regular and overtime hours together to obtain the total hours worked.

2.Calculate Total Earnings Per Employee – the total pay before deductions are taken out. a.Multiply the regular hours worked by the regular rate. b.Multiply the overtime hours worked by the overtime rate c.Add the two together

Sample Time Card

Section #2 – Figuring Payroll Tax Withholding Payroll Tax – taxes based on the business’s payroll and how much $ is earned. –Federal Tax – Collected from each employee and period- –State Tax --ically sent to the government

Withholding Allowance A withholding allowance is a deduction from an employee’s total earnings for each person legally supported by the taxpayer…inclu ding themselves.

Withholding Charts (p )

Additional Taxes Calculating Social Security Tax (FICA) – provides for old age, survivors, disability. –Total earnings x 6.5% or.065 Calculating Medicare Tax – federal tax paid for hospital insurance –Total earnings x 1.5% or.015

Section #3 – Preparing a Payroll Register

Preparing a Payroll Register 1.Enter the date of the last day in the payroll period (left) 2.Enter the date of the payroll payment (right) 3.Write each employees name, employee number, marital status, and number of withholding allowances.

4.Enter earnings for regular hours, overtime hours and total hours. 5.Find the federal income tax withheld by using the tables on pages 318 and 319 in the text. 6.Calculate social security tax withheld (FICA = 6.5% or.065) 7.Calculate Medicare tax withheld (1.5% or.015)

9.Enter amount(s) for other payroll deduction(s) a.United Way b.Savings Bonds c.Credit Union 10.Add all of your deductions together. This is your “total deductions”. 11.Subtract the “total deductions” from the “total earnings”. This is your net pay.

12.Prove the register (total, prove, rule) 13.Write the payroll check number in the check number column after you write the payroll check…section #4

Individual Employee Earnings Record

An Individual Employee Earnings Record is a form used to record detailed information that affects payments. One form is used per individual employee. Follow the steps below to prepare a register: 1.Enter the last day of the quarter 2.Across the top enter the employees number, name, rate of pay, marital status, withholding allowances, social security number and position within the company.

3.Enter the accumulated earnings for the beginning of the quarter (taken from the total of the previous quarter). *Exception: if this is the beginning of a new fiscal year, your accumulated totals will be the same as your current pay period totals! 4.Enter the last day of the pay period being recorded. 5.Enter the information of the current pay period (regular pay, overtime pay, etc.

6.Add the current pay periods totals to the (+) previous periods earnings. 7.At the quarter’s end, total all columns except for the final column (accumulated earnings).

Section #4 – Preparing Payroll Checks 1.Prepare the payroll check and stub transferring $ from the general account to the payroll account. a.Prepare the check stub 1.Date 2.Record all earnings and deductions 3.Net pay (amount of check) b.Prepare the payroll check 1.Date 2.Person (employee’s name) 3.Amount in figures 4.Amount in words 5.Signature

Sample Check

Prepare Individual Employee’s Checks 1.Prepare the check stub for each employee a.Write in the paycheck’s period ending date b.Write the total earnings, regular pay and overtime pay c.Write the total deductions d.Break down the individual deductions into income tax, FICA tax, health insurance, etc. e.Calculate the net pay by subtracting the deductions from the total earnings/using the payroll register

2.Prepare the payroll check for the net amount earned. a.Write the check payment date b.Write the formal name of the employee (pay to the order of…) c.Write the check amount in numbers d.Write the check amount in words e.Sign the check