century 21 accounting © thomson/south-western lesson 13-1 preparing payroll time cards

CENTURY 21 ACCOUNTING © Thomson/South-Western

LESSON 13-1LESSON 13-1

Preparing Payroll Time Cards


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LESSON

TERMS REVIEWTERMS REVIEW

salary pay period payroll total earnings


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LESSON 13

ANALYZING A PAYROLL TIME CARDANALYZING A PAYROLL TIME CARD


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LESSON 13

4. Add the Hours column.

CALCULATING EMPLOYEE HOURS CALCULATING EMPLOYEE HOURS WORKEDWORKED

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3. 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.


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LESSON 13

CALCULATING EMPLOYEE TOTAL CALCULATING EMPLOYEE TOTAL EARNINGSEARNINGS

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4455

1. 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.


Audit UnderstandingAudit Understanding

1. What is a payroll?1.

2. How many hours were worked by an employee who arrived at 8:29 and departed at 12:02?1.

3. How does Omni calculate overtime earning?1.

4. What are the total earnings of an employee who worked 40 hours and earned $11.00 per hour?1.

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LESSON 12-1



Determining Payroll Tax Withholding


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LESSON 13


payroll taxes withholding allowance social security tax Medicare tax tax base



Payroll Taxes – Taxes based on the payroll of a business.Required by law to withhold certain payroll taxesPayroll taxes withheld are a liability for the company until payment is made to the government



Employee Income Tax – A business must withhold federal income taxes from employee total earningsFederal Income taxes withheld must be sent to the federal government periodicallyMost states withhold state income taxSome states withhold city or country income taxes as well


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LESSON 13

EMPLOYEE’S WITHHOLDING ALLOWANCE EMPLOYEE’S WITHHOLDING ALLOWANCE CERTIFICATECERTIFICATE

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1. Write the employee’s name and address2. Write the employee’s social security number.3. Check the appropriate marital status block.4. Write the total number of withholding allowances claimed.5. The employee signs and dates the form.


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LESSON 13

EMPLOYEE’S INCOME TAX WITHHOLDING EMPLOYEE’S INCOME TAX WITHHOLDING – MARRIED PERSONS– MARRIED PERSONS

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1. Select the appropriate table.

2. Locate the employee’s total earnings.

3. Intersection of wages and number of allowances column.


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LESSON 13

Employee SS and MD TaxEmployee SS and MD Tax

Social Security & Medicare taxFICA – Federal Insurance Contributions Act provides for a federal system of old-age, survivors, disability, and hospital insurance.

Social Security (SS) – For old age, survivors and disabilityMedicare (MD) – for hospital insuranceFICA taxes are paid by EMPLOYEES and EMPLOYERSSS is calculated on employee earnings up to a maximum paid in calendar year. The Maximum amount is called the TAX BASE.

The rate used for SS is 6.2% or the factor of .062.Medicare has no tax base (No maximum earnings)The rate used for MD is 1.45% or the factor of .0145


Audit Your UnderstandingAudit Your Understanding

1. Where does an employer get the information used to determine the amount of federal income tax to withhold from employees’ earning?1.

2. Employee federal income tax withholdings are based on what two factors?1.

3. Does the employer or employee pay social security tax and Medicare tax?1.

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LESSON 12-1



Preparing Payroll Records


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LESSON 12-1


payroll register net pay employee earnings record

page 355



Payroll Register – A business form used to record and summarize payroll information.Gross Pay – Total Earnings with no deductionsDeductions – Amount withheld from pay for taxes, insurance or investment.Net Pay – Total earnings paid to an employee AFTER all deductions have been subtracted.


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LESSON 13

PAYROLL REGISTERPAYROLL REGISTER

77 88 99 1010 1111

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8. Health insurance premium deductions2. Payment date

3. Employee personal data9. Other employee payroll deductions

4. Earnings10. Total deductions

5. Federal income tax withheld11. Net pay

6. Social security tax withheld12. Total, prove, and rule

7. Medicare tax withheld13. Check number

1. Pay period date



Employee Earnings Record – A business form used to record details affecting make to an employee.


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LESSON 12-1

EMPLOYEE EARNINGS RECORDSEMPLOYEE EARNINGS RECORDS page 353

7. Total and prove

5. Earnings, deductions, net pay

2. Employee personal data

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1. Last day of quarter

4. Pay period

3. Beginning accumulated earnings

6. Updated accumulated earnings

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1. What does the payroll register summarize?1.

2. How is net pay calculated?1.

3. Why do companies complete employee earnings records?1.

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LESSON 12-1



Preparing Payroll Checks



Payroll Bank AccountA check for total net pay is written on Company’s general checking Account to the Company’s Payroll checking account


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LESSON 13

PAYROLL BANK ACCOUNTPAYROLL BANK ACCOUNT

1. Prepare the check stub.2. Prepare the check.

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Employee’s Payroll CheckInformation for check is taken from the payroll register. The check will have a detachable “stub” with detailed information on employee earnings and amounts deducted.


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LESSON 13

EMPLOYEE’S PAYROLL CHECKEMPLOYEE’S PAYROLL CHECK

1. Prepare the check stub of each employee’s payroll check.

2. Prepare each employee’s payroll check.

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Electronic Funds Transfer (EFT)Computerized cash payments system that transfers funds without the use of checks, currency or other paper documentsThe business deposits the net earnings into the employee’s bank account electronically. The employee receives a statement of earnings and deductions similar to a check “stub”.



1. Why does Omni Import have a separate checking account for payroll checks?1.

2. What is the source of the information that is recorded on each employee’s payroll check stub?1.

3. How do payroll procedures differ for an employee who requests that her pay be deposited through electronic funds transfer?1.

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LESSON 12-1

century 21 accounting © thomson/south-western lesson 13-1 preparing payroll time cards

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