CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning LESSON 12-1 Preparing Payroll Time Cards

CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning PAYING EMPLOYEES Employees record the time they work each day The money paid for employee services is called a SALARY The period covered by a salary payment is called a PAY PERIOD Employee pay periods may be: Weekly Bi-Weekly Twice a month Once a month 2 LESSON 12-1

CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning PAYING EMPLOYEES The total amount earned by all employees for a pay period is called a PAYROLL Reduced by state and federal taxes, and other deductions Health insurance FYI: Salaries are usually a fixed amount. Salaried workers do not usually receive overtime Money paid to employees on an hourly basis is usually referred to as wages Wages/Salary are often used interchangeably 3 LESSON 12-1

CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning ANALYZING A PAYROLL TIME CARD A payroll system must include an accurate record of the time each employee has worked Time cards are a frequently used method of recording hours worked Basic source of information to prepare a payroll Some time cards require employees to record only the total hours worked each day Some time cards require the employees to record their arrival and departure times FYI: Some systems are digitized, requiring employees to scan an identification card. At the end of the pay period, the system prints a report similar to a time card. 4 LESSON 12-1

CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 5 LESSON 12-1 ANALYZING A PAYROLL TIME CARD page 341

CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 6 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 CALCULATING EMPLOYEE TOTAL EARNINGS Once total regular and overtime hours are determined, employee earnings can be calculated TOTAL EARNINGS is the total pay due for a pay period before deductions 7 LESSON 12-1

CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 8 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 9 LESSON 12-1 TERMS REVIEW salary pay period payroll total earnings page 344

CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning REVIEW Complete the Work Together online Complete the On Your Own 12-1 online Complete Audit Your Understanding 1.What is a payroll? 2.How many hours were worked by a Hobby Shack employee who arrived at 8:39 and departed at 12:02? 3.How does Hobby Shack calculate overtime earnings? 4.What are the total earnings of a Hobby Shack employee who worked 44 hours in a week and earns $11.00/hour? **See book for more details 10 LESSON 12-1