Income Tax Withholding Section 6.4. Employee’s Withholding Allowance Certificate (IRS W-4 form) Form on which employee states marital status and number.

Slides:

Advertisements

Similar presentations

Advertisements

Determining Payroll Deductions

Chapter 9 Payroll McGraw-Hill/Irwin

Imperative Payroll Calculations David Diaz 6/19/2014.

Chapter Seven PAYROLL AND INCOME TAX Copyright © 2014 by The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin.

10.1 Gross Pay Find the gross pay per paycheck based on salary.

Payroll Deductions CONT 110. Terms you will use Accumulated Earnings Employee’s Earnings Record Employee’s Withholding Allowance Certificate Federal Income.

Chapter 2 Net Income.

Payroll Accounting Chapter 12.

Prepared by Charlie Cook The University of West Alabama © 2009 South-Western, a part of Cengage Learning Payroll Records: Assignments Chapter 10.

LESSON 12-2 Determining Payroll Tax Withholding

NEXT Death and Taxes NET PAY NOTES What things are certain in life?

Warm up Joe’s employer pays 60% of his annual medical insurance premiums. The total annual cost per employee is $5,000. Joe is paid bi-weekly. What dollar.

Business Math Assignment Press F5 to begin to playing this slide show.

Understanding Timecards, Taxes and Paychecks Why do we need to keep a record of hours worked? To be paid for hours worked Employers keep detailed records.

 5.1 Taxes and Your Paycheck.  Payroll Tax  Income Tax  Federal Insurance Contribution Act (FICA)  Withholding  Gross Income  Net Income  Form.

Copyright © 2011 by The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin Chapter 9 Employee Earnings, Deductions, and Payroll.

McGraw-Hill/Irwin ©2008 The McGraw-Hill Companies, All Rights Reserved Chapter 9 Payroll.

1 Business Math Chapter 10: Payroll. Cleaves/Hobbs: Business Math, 7e Copyright 2005 by Pearson Education, Inc. Upper Saddle River, NJ All Rights.

Consumer Taxation. Learning Objectives  Identify the major types of consumer taxation.  Compute gross and net pay.  Complete personal income tax forms.

Business Accounting Chapter 12. Importance of Payroll Records Required by law – keep accurate payroll records – report employee earnings – pay payroll.

LESSON 12-2 Determining Payroll Tax Withholding

Preparing Payroll Records

Preparing Payroll Records

Copyright © 2015, 2011, and 2007 Pearson Education, Inc. 1 Chapter 6 Payroll Section 4 Income Tax Withholding.

Copyright © by The McGraw-Hill Companies, Inc. All rights reserved.Glencoe Accounting Gross earnings is the total amount an employee earns in a pay period.

Home. Copyright © by The McGraw-Hill Companies, Inc. All rights reserved. What it is Standard: 6.0 The student will prepare payroll records, taxes, and.

Payroll ©2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or.

2.1 Deductions from the Gross Pay

TAXES AND SPENDING Obj. 4.01: Explain taxes on income.

Sales and Income Tax. Sales tax – a tax that is added to the cost of goods or services based on the percentage of the cost. Income tax – A tax that is.

Copyright © by The McGraw-Hill Companies, Inc. All rights reserved.Glencoe Accounting Computing Gross Pay Calculating Gross Earnings Section 12.1 gross.

Section 2Payroll Deductions What You’ll Learn  Why deductions are calculated and reported.  How to calculate deductions required by the federal government.

Payroll Accounting Making Accounting Relevant Businesses issue payroll checks to their employees to compensate them for work performed. Making Accounting.

 5.1 Taxes and Your Paycheck.  Payroll Tax  Income Tax  Federal Insurance Contribution Act (FICA)  Withholding  Gross Income  Net Income  Form.

DETERMINING PAYROLL TAX WITHHOLDING. PAYROLL TAXES  Based on employee’s total earnings  Employee Income Tax  FICA Taxes  Social Security Tax  Medicare.

GOALS BUSINESS MATH© Thomson/South-WesternLesson 2.1Slide 1 2.1Deductions from Gross Pay Find federal withholding tax deductions Calculate social security.

Chapter 9 Payroll McGraw-Hill/Irwin

LESSON 12-1 Preparing Payroll Time Cards

LESSON 12-1 Preparing Payroll Time Cards

CENTURY 21 ACCOUNTING © Thomson/South-Western LESSON 12-2 Determining Payroll Tax Withholding Required by Law to withhold taxes Payroll taxes represent.

Preparing Payroll Records

The Taxes You Pay. 1. Payroll Taxes -taxes based on the payroll of a business upon employee total earnings Paid to the govt. by you and your employer.

G1 © Family Economics & Financial Education – Revised March 2008 – Paychecks and Taxes Unit – Understanding Your Paycheck Funded by a grant from.

Copyright © by The McGraw-Hill Companies, Inc. All rights reserved.Glencoe Accounting Gross earnings is the total amount an employee earns in a pay period.

BUS250 Business Mathematics Seminar 5. Try these examples Find the gross earnings for: Carolyn, who earns $15,000 a year and is paid weekly. $ Martha,

CENTURY 21 ACCOUNTING © Thomson/South-Western LESSON 12-2 Determining Payroll Tax Withholding Original created by M.C. McLaughlin, Thomson/South-Western.

Chapter 6 Payroll.

Payroll Accounting Making Accounting Relevant Businesses issue payroll checks to their employees to compensate them for work performed. Making Accounting.

Unit 43 Paycheck Calculation. Basic Principles of Paycheck Calculation Two main terms are used regarding payroll: gross pay and net pay. –Gross pay is.

Chapter 12 Payroll Accounting

What items must be included in your notebook ? What items must be included in your notebook ? When is the notebook due? When is the notebook due? When.

0 Glencoe Accounting Unit 3 Chapter 12 Copyright © by The McGraw-Hill Companies, Inc. All rights reserved. Unit 3 Accounting for a Payroll System Chapter.

Gross Income the total amount of money one earns Ex. $6.15 an hour Multiplied by 40 hrs. per week_______________ Multiplied by 52 weeks per year________________.

Payroll Liabilities and Tax Records Making Accounting Relevant Federal, state, and local governments pass tax laws in order to generate revenue for government.

Basic Goals of Payroll System  Prepare and issue payroll checks  Produce records for accounting purposes and reporting to government and management.

Budget Notes Gross Income: the total amount of money one earns Ex. $7.25 an hour Multiplied by 40 hrs. per week______________ Multiplied by 52 weeks per.

PAYROLL ACCOUNTING Chapter 12. Using a Payroll System  Payroll – list of the employees and the payments due to each for a pay period  Pay Period – the.

Payroll Unit Terms Write down as many payroll terms or payroll taxes that you can think of in 2 minutes. Ready, Set, Go!

Taxes and Your Paycheck Career and Financial Management 2.

Prepared by Johnny Howard © 2015 South-Western, a part of Cengage Learning.

GETTING PAID WHERE DOES MY MONEY GO?. PAY CHECK DEDUCTIONS Deductions Video What is the difference between gross and net income? What are state taxes.

Paycheck Tax Deductions Lesson 3-1. What is the Definition of Tax? Compulsory charges imposed on citizens by local, state, and federal government.

Chapter 2 Net Income (page 114)

Determining Payroll Tax Withholding Lesson Payroll Taxes Payroll Taxes: taxes based on the payroll of a business Payroll Taxes: taxes based on the.

2.1 F EDERAL I NCOME T AX FIT: (Federal Income Tax) is money withheld by employers. Required by law Amount is dependent on how much is made Taxes are used.

Sales and Income Tax. Sales tax – a tax that is added to the cost of goods or services based on the percentage of the cost. Income – wages earned from.

Practical Math Applications © Cengage Learning/South-Western Practical Math Applications © 2011 Cengage Learning. All rights reserved. May not be scanned,

Journal You can choose whether you want to be paid $50,000 salary for the whole year of $20 an hour for however long you work. You will get time and a.

Personal Financial Literacy

Presentation transcript:

Income Tax Withholding Section 6.4

Employee’s Withholding Allowance Certificate (IRS W-4 form) Form on which employee states marital status and number of withholding allowances being claimed. This information is used to determine the amount of federal withholding tax. This is done using one of two methods…

1. The Wage Bracket Method Uses the tables found on p Look at the correct table: Weekly or Monthly earnings? Married or Single? Find the correct wage range along the left columns. Cross-match to the correct # of allowances along the top.

Examples: Wage Bracket Method Rachel Leach is single and claims 2 withholding allowances. Use the wage bracket method to find her withholding tax if her weekly gross earnings are $ Bob has monthly earnings of $2, He is married and claims 4 withholding allowances. Find his withholding tax using the wage bracket method.

2. The Percentage Method Uses the table on p 245. Find the correct table. Weekly, Biweekly, Semimonthly, or Monthly? Married or Single? Find the withholding allowance for one person. Multiply by the # of allowances being claimed. Subtract that value from the gross earnings. Find the range (Married or Single?) that includes that value. Subtract the ‘of excess over’ amount before you multiply by the %, then add.

Percentage Method Examples Sadie is married and claims 3 withholding allowances. Use the percentage method to find her withholding tax in a week when she has earnings of $1263. Howard has earnings of $5735 for the month. He is married and claims 4 withholding allowances. Use the percentage method to find his tax.

Another Example! Carol has weekly earnings of $2175, is single, and claims 2 withholding allowances. Use the percentage method to find her withholding tax.

State Withholding Tax Uses the state’s tax rate… varies by state! Tax = state’s percent rate x gross earnings EX: An employee has gross earnings of $3786 for the month. If her state has a 6.15% income tax rate, find the state withholding tax.

NET PAY… after all the taxes! To find net pay, first find all the taxes: FICA Medicare Federal Withholding State Withholding Any others (like SDI) Then subtract ALL the taxes from the gross earnings.

Net pay example Al has monthly gross earning of $8762, is married, and claims 3 withholding allowance. His state withholding is 3% and his union dues are $58. Find his net pay using the percentage method for federal withholding.

Quarterly amount owed to IRS Remember: employee’s contributions for Medicare and FICA are matched by the employer. Usually paid quarterly… Payless Dry Cleaners withheld $ in FICA and $ in Medicare Tax from employees. How much must the employer send to the IRS? In one quarter, City Electronics has collected $ in FICA, $ in Medicare Tax, and $ in Federal Withholding tax from its employees. Find the total amount due to the government by the employer.