CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning Thursday, May 3, 2012 Good morning Moment of silence/Pledge/Announcements Bell Ringer Chapter 12: Preparing Payroll Records Define the twelve terms from Chapter 12 in your notebooks

CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning LESSON 12-1and LESSON 12-2 Preparing Payroll Time Cards  Calculate Employee Total Earnings Determining Payroll Tax Withholding  Calculate Federal, Social Security, and Medicare Tax

CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning PAYING EMPLOYESS Pay employees weekly, biweekly, semimonthly, monthly Money paid hourly to employees referred to as wages Fixed amount paid per period is referred to as Salary 3 LESSON 12-1

CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 4 LESSON 12-1 ANALYZING A PAYROLL TIME CARD page 341

CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 5 LESSON Add the Hours column. CALCULATING EMPLOYEE HOURS WORKED page Add Hours Reg and Hours OT columns and enter the totals. 2.Calculate the number of overtime hours and enter the amounts. 1.Calculate the number of regular hours for each day and enter the amounts.

CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 6 LESSON 12-1 CALCULATING EMPLOYEE TOTAL EARNINGS page Enter the rate for regular time in the Rate column. 2.Calculate the regular earnings. Enter the amount. 3.Enter the rate for overtime. 4.Calculate the overtime earnings. Enter the amount. 5.Add the Amount column to calculate total earnings. Enter the amount of total earnings.

CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning Worksheet Calculate Employees Total Earnings Employee # 1 Regular Earnings $ Overtime Earnings $ Total Earnings

CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 8 LESSON 12-1 TERMS REVIEW salary pay period payroll total earnings page 344

CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning LESSON 12-2  Businesses are required by law to withhold payroll taxes.  Accurate and Detailed records must be maintained.  Payroll taxes are a liability for the employer until they are paid. Determining Payroll Tax Withholding

CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning LESSON 12-2  Federal Income Tax withheld must be paid periodically to the federal government  Employers in many states are also required to withhold state, city, and/or county income taxes from employees earnings. Determining Payroll Tax Withholding

CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 11 LESSON 12-2 EMPLOYEE’S WITHHOLDING ALLOWANCE CERTIFICATE page Write the employee’s name and address 2.Write the employee’s social security number. 3.Check the appropriate marital status block. 4.Write the total number of withholding allowances claimed. 5.The employee signs and dates the form.

CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 12 LESSON 12-2 EMPLOYEE’S INCOME TAX WITHHOLDING – MARRIED PERSONS page Select the appropriate table. 2.Locate the employee’s total earnings. 3.Intersection of wages and number of allowances column.

CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning Other Federal Taxes Social Security TaxMedicare Tax 13 LESSON 12-1 A federal tax paid for old- age, survivors, and disability insurance A federal tax for hospital insurance Paid by both Employer and Employee

CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning Other Federal Taxes Medicare TaxSocial Security Tax 14 LESSON 12-1 A federal tax paid for old-age, survivors, and disability insurance A federal tax for hospital insurance Employers are required to withhold and deposit the Employees part of the taxes and pay a matching amount.

CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning SOCIAL SECURITY TAX 15 LESSON 12-1  Social Security Tax is calculated on employee earnings up to a maximum paid in a calendar year.  The maximum amount on which a tax is paid is called a tax base  Social Security has a tax base, Medicare does not have a tax base

CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning SOCIAL SECURITY TAX Calculate Social Security Tax 2012 Tax Rate 16 LESSON 12-1 Total Earnings Social Security Rate Social Security Tax Deduction

CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning MEDICARE TAX Calculate Medicare Tax 17 LESSON 12-1 Total Earnings Medicare Tax Rate Medicare Tax Deduction

CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 18 LESSON 12-2 TERMS REVIEW payroll taxes withholding allowance social security tax Medicare tax tax base page 350

CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning ASSIGNMENT WORKSHEET: Drill 12-D2 Extra Credit: APLIA APPLICATION PROBLEM 12-2 (maximum 12 points) 19 LESSON 12-1