Before Lunch After Lunch - Mrs. Fahey's Web

AGENDA: Wednesday, March 8Before LunchComplete: 12-1 WT/OYO 12-1 ApplicationLet me know if you need helpAfter Lunch 12-2: Determining PayrollTax Withholding Instruction, including 12-2Work Together 12-2 On Your Own 12-2 Application Problem1

CHAPTER 12Preparing Payroll Records

A PreviewThe Payroll Process

Paying Employees Salary Money paid for employee services. Pay Period The period covered by a salary payment Every weekEvery two weeksTwice a monthOnce a month Payroll The total amount earned by all employees for a pay period. Total Earnings The total pay due for a pay period before deductions.page 344

Payroll: The Process (Hourly Employees)CalculateWage Due(Hours xRate)Calculate cks

12-1Preparing Payroll Time Cards

Analyzing A Payroll Time Card4 Sections1. Morning2. Afternoon3. Overtime4. Hours1234

Calculating Employee Hours Worked12341. Calculate the numberof regular hours for eachday and enter theamounts.2. Calculate the number ofovertime hours and enterthe amounts.3. Add Hours Reg andHours OT columns andenter the totals.4. Add the Hours column.

Calculating Employee Total Earnings1. Enter the rate for regulartime in the Rate column.2. Calculate the regularearnings. Enter the amount.3. Enter the rate for overtime.4. Calculate the overtimeearnings. Enter the amount.5. Add the Amount column tocalculate total earnings.Enter the amount of totalearnings.12345

TRY IT40 X 9 3605 x ( 9 x 1.5) 67.50 360 45 405 360.00 67.50 500.00 56.25 427.50 556.25 292.50 440.00 0.00 33.00 292.50 473.00

12-2Determining Payroll Tax Withholding

PAYROLL TAXESPayroll TaxesEmployee Income TaxTaxes paid by the businessbased on the employee earnings(business payroll).Taxes paid by the employeethat the business must withholdfrom employee earnings. A business is required to paycertain payroll taxes on employeeearnings. Payroll taxes are a liability for theemployer until payment is madeto the government. Federal State County (sometimes) City (sometimes)12

Employee’s Withholding Allowance Certificate Form W-4 (Employee’s Withholding Allowance Certificate):Information used to determine amount of income tax withheld. Withholding Allowance: A deduction from total earnings for each person legally supported by ataxpayer, including the employee. A married employee will have less withheld than a single employee. The more allowances claimed the less income tax is withheld.

Employee’s Withholding Allowance Certificate1. Write the employee’s name and address2. Write the employee’s social security number.3143. Check the appropriate marital status block.4. Write the total number of withholdingallowances claimed.5. The employee signs and dates the form.25

Employee’s Income Tax Withholding – Married Persons1231. Select the appropriate table (Pg. 347, Single), (Pg. 348, Married).2. Locate the employee’s total earnings.3. Intersection of wages and number of allowances column.

Employee Social Security & Medicare TaxFICA (Federal Insurance Contributions Act)Provides for a federal system of old-age, survivors, disability, and hospital insurance1. Social Security Tax (6.2%) Provides for a federal system of old-age, survivors, disability Calculated based on a Tax Base. The maximum amount of earnings on which a tax is calculated (set by Congress) for 2017 127,200; Surcharge of .9% over 200,0002. Medicare Tax (1.45%) Provides for hospital insurance

Employee Social Security And Medicare Tax(Calculations)Total Earningsx 1,137.00Total Earnings 1,137.00Social Security Rate 6.2%xMedicare Tax Rate1.45%Social Security Tax Deduction 70.49 Medicare Tax Deduction 16.49

TRY IT 50.00 77.00 31.00 79.00 67.58 52.08 63.24 60.76 15.81 12.18 14.79 14.21

AGENDA: Friday, March 10Before LunchAfter LunchComplete:12-3: Instruction, including 12-3 12-1 WT/OYO 12-1 Application 12-2 WT/OYO 12-2ApplicationWork Together 12-3 On Your Own 12-3 Application ProblemLet me know if you need help19

12-3Preparing Payroll Records

Payroll: The Process (Hourly Employees)CalculateWage Due(Hours xRate)Calculate cks

What Are Withholdings andDeductions from Earnings?1. Withholdings Taxesa) Federal Single or Married? Number of Allowances? Look up income on chartb) Social Security (6.2%)c) Medicare (1.45%)2. Deductions Health Insurance “Other” (can be things likegarnishments, 401k contributions)

An ExampleEmployee: Jane HarperMarried, 3 federal allowances Works 40 hours (regular) Works 1.5 hours OT Earns 40 hours vacation time Withholding taxes Federal (from chart) SSI (6.2%) Medicare (1.45%) State Local Deductions 401(k) FSA Commuter Trip

What is a Payroll Register? A business form used to record payroll information Summarizes for one period: (1) Total Earnings; (2) Payroll Withholdings andDeductions; and (3) Net Pay

PAYROLL REGISTER124567891011313121. Pay period date2. Payment date3. Employee personal data4. Earnings5. Federal income tax withheld6. Social security tax withheld7. Medicare tax withheld8. Health insurance premium deductions9. Other employee payroll deductions10. Total deductions11. Net pay12. Total, prove, and rule13. Check number

TRY IT1. Complete the payroll register entries for Judy Hensley and Mike McCune for the semimonthly pay period endedJuly 15, 20--. Use the tax withholding tables shown in Lesson 12-2. Use tax rates of 6.2% for social security taxand 1.45% for Medicare tax. Neither employee has reached the tax base. For each employee, withhold 60.00for health insurance and 15.00 for U.S. Savings bonds, per pay period.2. Total all the amount columns of the payroll register. Prove the payroll register.Jul 15, 20--Jul 15, 20--Totals1 960 0090 751 079 00971 752 050 7548 0095 00143 0066 9060 25127 1515 6514 0929 7460 0060 00120 0015 0015 0030 00205 55244 34449 89873 45727 411 600 86

What is an Employee Earnings Record?Information from Payroll Register is recorded in the Earnings Record for each employee

EMPLOYEE EARNINGS RECORDSpage 3531. Last day ofquarter2. Employeepersonal data3. Beginningaccumulatedearnings4. Pay period 241535. Earnings,deductions,net pay6. Updatedaccumulatedearnings7. Total and prove67

TRY ITPrepare a quarterly earnings record for Ms. Hensley for the quarter ended September 30,20--, and enter the July 15 payroll information. Ms. Hensley’s employee number is 5;rate of pay is 13.00; social security number is 543-69-0123; position is sales clerk.Accumulated earnings at the end of the second quarter are 13,520.00.September 30, 20-5HensleyJudyM 13.002Sales Clerk543-69-012313 520 007/151040 0039 001079 0048 0066 9015 6560 0015 00205 55873 4514 599 00

Records Prepare Payroll Checks. 12-1 Preparing Payroll Time Cards. Analyzing A Payroll Time Card 4 Sections 1. Morning 2. Afternoon 3. Overtime 4. Hours . Preparing Payroll Records. Payroll: The Process (Hourly Employees) Calculate Wage Due (Hours x Rate) Calculate Tax Withholdings Apply Deductions Complete Payroll Register