1. Preparing Payroll Records
Chapter 13

2. Paying Employees p. 304 Salary – the money paid for employee service
Pay period – the period covered by a salary payment
Payroll – The total amount earned by all employees for a pay period
Must be reduced by state and federal taxes and other deductions
Payroll records used to:
Record payroll
Provide annual records to employees

3. Preparing Payroll Time Cards
Lesson 13-1
Page 304

4. Analyzing Time Cards
Time cards used as basic source of information to prepare payroll
Omni uses a time clock to record daily arrival and departure times
Look at Rick E. Selby’s time card
Three sections: Morning, Afternoon, Overtime
Arrival, lunch, left for the day

5. Calculating EE Hours Worked
Calculate regular hours
Departure Time Arrival Time = Hours Worked
12: :55 =
12: :00 = :00
*ROUND TO THE NEAREST QUARTER HOUR
Calculate overtime hours
Total regular hours, Total overtime hours

6. Calculating EE Total Earnings
Total Earnings – total pay due for a pay period before deductions
Enter regular rate
Calculate the regular earnings
Regular Hours x Regular Rate = Regular Earnings
x $ = $1,056.00
Enter overtime rate (1.5 times regular rate)
Regular Rate x = Overtime Rate
$ x = $18.00
Calculate overtime
Add the amount column to calculate total earnings

7. Complete 13-1 WT & OYO
Page 307

8. Determining Payroll Tax Withholding
Lesson 13-2
Page 308

9. Payroll Taxes Payroll Taxes – taxes based on the payroll of a business
Based on employee total earnings
Penalty for failure to pay correct taxes when due
LIABILITY for employer until payment is made to the government
Employee Income Tax
Business must withhold federal income tax
Forwarded periodically to the federal government
State and city income tax can also be withheld

10. How many of you have a job?
Form W-4
Determines the amount of tax to withhold

11. EE’s Withholding Allowance
Withholding Allowance – a deduction from total earnings for each person legally supported by a taxpayer, including the employee
Married employee has less withheld than single
The more allowances the less tax withheld
EXEMPT – low-income and part-time employees
Fill out a federal W-4 and CT W-4 form

12. EE Income Tax Withholding
Withholding table on page 310 and 311
Different table for various payroll periods
Monthly, semimonthly, biweekly, weekly, and daily
Revised each year
Current tax table (
Determine Rick E. Selby’s tax withholding using the table on page 311 then using the website above.

13. EE Social Security and Medicare Tax
Social Security tax – federal tax paid for old-age, survivors, and disability insurance
Medicare tax – federal tax paid for hospital insurance
Tax base – max amount of earnings that can be taxed (current tax base

14. Calculating Social Security tax
Total SS Tax SS Tax
Earnings x Rate = Deduction
$1, x 6.5% = $73.91
*Amounts taken from Rick E. Selby’s time card on page 306 and page 312

15. Calculating Medicare tax
Total Medicare Medicare Tax
Earnings x Tax Rate = Deduction
$1, x 1.5% = $17.06
*Amounts taken from Rick E. Selby’s time card on page 306 and page 312

16. Complete 13-2 WT & OYO
Page 313

17. Preparing Payroll Records
Lesson 13-3
Page 314

18. Payroll Register
Payroll Register – a business form used to record payroll information
Summarizes the payroll for one pay period and shows:
total earnings
payroll withholdings
Net pay

19. Preparing a Payroll Register
Date (last date of semimonthly payroll) at top, left of Register
Date of payment at top, right of Register
Employee information
Number
Name
Marital Status
Number of Allowances
Look at Rick E. Selby on line 5

20. Preparing a Payroll Register (con’t)
Enter earnings from time card
Regular
Overtime
Total
Enter Deductions: Fed Income Tax
Enter Deductions: SS Tax
Enter Deductions: Medicare Tax
Enter Deductions: Health Insurance Premiums
Enter Deductions: Other Deductions (United Way for RES)
Look at Rick E. Selby on line 5

21. Preparing a Payroll Register (con’t)
Add deductions in column 9
FIT SS Tax Medi Tax Health Ins Other = Total
Determine Net Pay (total earnings paid after payroll taxes and other deductions)
Total earnings Total Deductions = Net pay
Total, prove, and rule the payroll register
Payroll Checks are written after calculations are verified and a partner approves the payroll. Write the check number in the appropriate column of the register.

22. Employee Earnings Record
Quarterly Reports sent to federal and state government showing EE taxable earnings and taxes withheld from EE earnings
Called EE Earnings Record
Earnings and deductions for each pay period are summarized on one line of the EE earnings record
Look at Rick E. Selby’s earnings record on page 316

23. Preparing an EE Earnings Record
Date of last day of quarter on top, right
Enter EE:
Number
Name
Marital Status
Withholding Allowances
Hourly Rate
SS Number
Position
Fiscal year accumulated earnings

24. Preparing an EE Earnings Record (con’t)
Last day of pay period being recorded
Enter EE:
Earnings
Deductions
Net Pay
Calculate Accumulated Earnings:
Accum Earnings Total Earnings Accum Earnings
as of 12/1 + for Pay Per. End = as of 12/15
12/15
Total and prove the earnings for each EE
Total Earnings - Total Deductions = Net Pay

25. Other Notes
Net pay calculated in step 7 is compared to the total of the Net Pay column
Total earnings (not net pay) are added to the previous accumulated earnings amount on the earnings record.

26. Complete 13-3 WT & OYO
Page 318

27. Preparing Payroll Checks
Lesson 13-4
Page 319

28. Payroll Bank Account Entirely separate bank account
Protects & controls payroll payments
General bank account check written for exact payroll amount each pay period & deposited into payroll bank account

29. Preparing a check for total net pay
Check stub FIRST
Date of check
Amount from PR Register
Payable to Payroll Account
For: pay period
Prepare check and sign
Deposited into payroll checking account

30. EE’s Payroll Check Information taken from payroll register
Similar procedure for preparing personal checks
EE keeps stub for their record