1. Payroll Management
12-3

2. Goals Describe the components of a business’ payroll system
Identify information included in payroll records and paychecks.

3. Payroll Systems
Payroll – the financial record of employee compensation, deductions, and net pay.
Includes the following
Salary/Wages
Additional Pay (commissions, & bonuses)
Benefits (insurance, vacation, leave time, retirement plans, educational assistance)
Payroll taxes

4. Payroll Taxes
Income Taxes – based on the amount of wages and income and the number of employee dependents
Social Security and Medicare – gov. requires employers to w/h and deposit these contributions form employees’ paychecks
Employer has a make a matching contribution
AKA: FICA (Federal Insurance Contributions Act)

5. Payroll Taxes (cont.)
Unemployment Taxes – Federal Unemployment Tax (FUTA)
Based on the business’ total employee wages.
Employers and employees pay into this tax

6. Preparing A Payroll Payroll records holds the employee’s name SS#
Address
Individual tax info.
Benefits
Earnings

7. Preparing Paychecks
Earnings Report – allow an employee to see how his/her pay was calculated.
Direct Deposit – allows the employer to transfer the employee’s net pay into his/her bank account.