Practical Math Applications © Cengage Learning/South-Western Practical Math Applications © 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Payroll 5.3 Payroll Deductions 5.4 Employee’s Earnings Record and Payroll Register Slide 1 5

Practical Math Applications © Cengage Learning/South-Western Practical Math Applications © 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 5.3 Payroll Deductions 1. Identify terms used for payroll deductions. 2. Calculate Social Security and Medicare withholding. 3. Find the federal income tax withholding using the wage bracket method. Slide 2 OBJECTIVES

Practical Math Applications © Cengage Learning/South-Western Practical Math Applications © 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 5.3 Payroll Deductions 4. Find the federal income tax withholding using the percentage method. 5. Find the state income tax withholding. 6. Find the amount paid to the Internal Revenue Service (IRS) each payroll tax period. Slide 3 OBJECTIVES

Practical Math Applications © 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. accumulated earnings employee’s earnings record employee’s withholding allowance certificate federal income tax (FIT) Federal Insurance Contributions Act (FICA) Social Security Medicare Slide 4 Key Terms net pay payroll register percentage method pre-tax deductions state and local income tax withholding taxable earnings wage bracket method

Practical Math Applications © 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. The steps for computing Social Security and Medicare are shown below. STEPS 1. For Social Security tax, multiply gross earnings per pay period times 6.2% on the first $106,800 earned. 2. For Medicare tax, multiply gross earnings per pay period times 1.45%. 3. Social Security tax plus Medicare tax equals total FICA withheld. Slide 5 Objective 2 Write a percent as a decimal. O BJECTIVE 2 Calculate Social Security and Medicare withholding. Example

Practical Math Applications © 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Assume Paula Russell’s gross earnings are $ per week, she is married and has claimed one withholding allowance. Find the federal income tax table withholding. STEPS Use a withholding table. Slide 6 Objective 2 Write a percent as a decimal. O BJECTIVE 3 Find the federal income tax withholding using the wage bracket method. Example

Practical Math Applications © 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Frank is married, claims four withholding allowances, and has weekly gross earnings of $1,230. Find the federal income tax table withholding. Slide 7 Objective 2 Write a percent as a decimal. O BJECTIVE 4 Find the federal income tax withholding using the percentage method. Example

Practical Math Applications © 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. STEPS Slide 8 Objective 2 Write a percent as a decimal. O BJECTIVE 4 Find the federal income tax withholding using the percentage method. Example

Practical Math Applications © 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Terri Adams has gross earnings for the month of $3,100. If her state has a 4.5% income tax rate, find the state withholding tax. STEPS Multiply the amount of gross earnings by the state income tax withholding rate. $3,100 × = $ Slide 9 Objective 2 Write a percent as a decimal. O BJECTIVE 5 Find the state income tax withholding. Example

Practical Math Applications © Cengage Learning/South-Western Practical Math Applications © 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 5.4 Employee’s Earnings Record and Payroll Register 1. Create an employee’s earnings record. 2. Create a payroll register. Slide 10 OBJECTIVES

Practical Math Applications © 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. footing Slide 11 Key Terms

Practical Math Applications © 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Below is an example of an Employee’s Earnings Record. Compute straight time: 40 × $15 = $600 Slide 12 Objective 2 Write a percent as a decimal. O BJECTIVE 1 Create an employee’s earnings record. Example

Practical Math Applications © 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Below is an example of an Employee’s Earnings Record. Compute overtime: $15 × 1.5 = $22.50 × 8 = $180 Slide 13 Objective 2 Write a percent as a decimal. O BJECTIVE 1 Create an employee’s earnings record. Example

Practical Math Applications © 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Below is an example of an Employee’s Earnings Record. Compute total earnings: $600 + $180 = $780 Slide 14 Objective 2 Write a percent as a decimal. O BJECTIVE 1 Create an employee’s earnings record. Example

Practical Math Applications © 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Below is an example of an Employee’s Earnings Record. Compute Social Security: $780 × 6.2% = $48.36 Slide 15 Objective 2 Write a percent as a decimal. O BJECTIVE 1 Create an employee’s earnings record. Example

Practical Math Applications © 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Below is an example of an Employee’s Earnings Record. Compute Medicare: $780 × 1.45% = $11.31 Slide 16 Objective 2 Write a percent as a decimal. O BJECTIVE 1 Create an employee’s earnings record. Example

Practical Math Applications © 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Below is an example of an Employee’s Earnings Record. Use wage or percentage method to determine federal withholding: $54 Slide 17 Objective 2 Write a percent as a decimal. O BJECTIVE 1 Create an employee’s earnings record. Example

Practical Math Applications © 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Below is an example of an Employee’s Earnings Record. Add deductions: $ $ $ $17.50 = $ Slide 18 Objective 2 Write a percent as a decimal. O BJECTIVE 1 Create an employee’s earnings record. Example

Practical Math Applications © 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Below is an example of an Employee’s Earnings Record. Compute net pay: $780 – $ = $ Slide 19 Objective 2 Write a percent as a decimal. O BJECTIVE 1 Create an employee’s earnings record. Example

Practical Math Applications © 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Below is an example of a payroll register. Slide 20 Objective 2 Write a percent as a decimal. O BJECTIVE 2 Create a payroll register. Example

Practical Math Applications © 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. To the right is an example of a payroll check. Slide 21 Objective 2 Write a percent as a decimal. O BJECTIVE 2 Create a payroll register. Example