LESSON 12-1 Preparing Payroll Time Cards Payroll, What is it? Think about a business and how they may handle how they pay employees. From an accounting.

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LESSON 12-1 Preparing Payroll Time Cards

© 2014 Cengage Learning. All Rights Reserved.

© 2014 Cengage Learning. All Rights Reserved.

© 2014 Cengage Learning. All Rights Reserved.

LESSON 12-1 Preparing Payroll Time Cards

ANALYZING A PAYROLL TIME CARD

LESSON 12-1 Preparing Payroll Time Cards

Preparing Payroll Records

LESSON 12-1 Preparing Payroll Time Cards

LESSON 12-1 Preparing Payroll Time Cards

LESSON 12-1 Preparing Payroll Time Cards

ANALYZING A PAYROLL TIME CARD

Presentation transcript:

LESSON 12-1 Preparing Payroll Time Cards

Payroll, What is it? Think about a business and how they may handle how they pay employees. From an accounting perspective, what are at least 3 things you think a business does to pay their employees. Student Contributions:

Payroll, What is it? What do businesses do for payroll? A

Agenda What do business do for payroll? Prepare Time Cards Determine Tax amount to Withhold from paychecks Prepare Payroll Records Issue Payroll Checks Journalize Payroll Transactions (Chap 13) Pay Taxes for employees to the Government (Chap 13)

STEP 1: PREPARING TIME CARDS

TERMS Salary: the amount an employee is paid for the year Hourly: the amount an employee is paid by the hour Pay period: the period covered by a salary payment Payroll: the total amount earned by all employees for a pay period Four Payment period options (how often you get paid) Monthly= Semi-monthly = Bi-weekly (Every two weeks) = Weekly =

TERMS Pay period: the period covered by a salary payment Hobby Shack: Pays on the 15th and the last day of the month What pay period method does Hobby Shack use? Semi-monthly How many pay checks per year will be issued? 24

TERMS Payroll: the total amount earned by all employees for a pay period Reduced by state and federal taxes, health insurance etc. What is the difference between a salaried and hourly employee? Salaried Employee set yearly wage - $35,000 per year Hourly Employee set hourly wage - $9.25 per hour

PAYROLL SYSTEM Accurate record of employee time = a must Hourly wages are based on? Based on employee arrival and departure time on time card What is a normal work week for hours? 40 hours per week Two main types of wages paid: Regular time = 8 hours for a day or 40 hours in a week Overtime = > 40 hours in a week, > 80 every two weeks Only Hourly employees get paid overtime What is the overtime rate of pay? Paid 1.5 times or time and ½ of your hourly wage

PAYROLL SYSTEM Example: as an hourly employee you are paid $9.25 an hour, paid weekly and you worked 44 hours: What is the Regular Wage Earned? 9.25 X 40 regular hours What is the overtime wage Earned? Determine Overtime Rate: Multiply hourly wage X 1.5 or 9.25 X 1.5 Do not round the hourly rate to two decimal places if more than two decimals Multiply overtime rate by overtime hours Round final number to 2 decimal places What is the total wage for one week? Regular wage of 9.25 X 40 Plus Overtime Wage Total Weekly Wage

ANALYZING A PAYROLL TIME CARD A time card is used to collect employee payroll hours Morning hours = hours before lunch Afternoon hours = hours after lunch (lunch is unpaid) Time rounded to the nearest quarter hour Example: 7:58 = 12:02 = 12:59 = 5:06= Convert hours to.25,.50,.75 to calculate pay 15 minutes = minutes = minutes =.75 8:00 5:00 12:00 1:00 5:36 9:20

4.Calculate Regular Wage CALCULATING EMPLOYEE HOURS WORKED 3.Add Regular Hours and Hours OT columns and enter the totals. 2.Calculate overtime hours for each day. 1.Calculate regular hours for each day at $8.50 per hr Employee No 3 Name Richard Steidler Pay Period Ended March 06, 2010 MorningAfternoonOvertimeHours InOutInOutInOutRegOT 1 2 8:0012:001:005:00 3 7:5612:0212:595:03 4 7:5011:4912:585:067:019:30 5 7:5712:031:115:10 6 8:0312:0612:494:505:007:00 7 HoursRateAmount Regular Overtime Total Hours Total Earnings 5.Calculate Overtime Wage 6.Total Hours and Earnings Total Earnings: total pay due for a pay period before deductions (known as Gross Wage to employee)

CALCULATING EMPLOYEE HOURS WORKED Employee No 3 Name Richard Steidler Pay Period Ended March 06, 2010 MorningAfternoonOvertimeHours InOutInOutInOutRegOT 1 2 8:0012:001:002: :5612:0212:595: :5011:4912:585:067:019: :5712:031:115: :0312:0612:494: HoursRateAmount Regular Overtime Total Hours Total Earnings Employee No 3 Name Richard Steidler Pay Period Ended March 20, 2010 MorningAfternoonOvertimeHours InOutInOutInOutRegOT 1 2 7:309:301:034:58 3 8:0012:0412:565:00 4 7:1511:1512:585:077:019:30 5 7:5712:031:115:16 6 7:4811:5012:494:506:007:00 7 HoursRateAmount Regular Overtime Total Hours Total Earnings Work Together: Wage 9.59 On Your Own: 9.59

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