LESSON 12-1LESSON 12-1

Preparing Payroll Time Cards

Payroll, What is it?Payroll, What is it?

Think about a business and how they may handle how they pay employees. From an accounting perspective, what are at least 3 things you think a business does to pay their employees.

Student Contributions:

Payroll, What is it?Payroll, What is it?

What do businesses do for payroll?

A

AgendaAgenda

What do business do for payroll? Prepare Time Cards Determine Tax amount to Withhold from paychecks Prepare Payroll Records Issue Payroll Checks Journalize Payroll Transactions (Chap 13) Pay Taxes for employees to the Government (Chap 13)

STEP 1:STEP 1:PREPARING TIME CARDSPREPARING TIME CARDS

TERMSTERMS

Salary: the amount an employee is paid for the year Hourly: the amount an employee is paid by the hour Pay period: the period covered by a salary payment Payroll: the total amount earned by all employees for

a pay period Four Payment period options (how often you get paid)

Monthly= Semi-monthly = Bi-weekly (Every two weeks) = Weekly =

TERMSTERMS

Pay period: the period covered by a salary payment Hobby Shack: Pays on the 15th and the last day of the month What pay period method does Hobby Shack use?

Semi-monthly

How many pay checks per year will be issued? 24

TERMSTERMS

Payroll: the total amount earned by all employees for a pay period Reduced by state and federal taxes, health insurance etc.

What is the difference between a salaried and hourly employee? Salaried Employee

set yearly wage - $35,000 per year

Hourly Employee set hourly wage - $9.25 per hour

PAYROLLPAYROLL SYSTEMSYSTEM

Accurate record of employee time = a must Hourly wages are based on?

Based on employee arrival and departure time on time card

What is a normal work week for hours? 40 hours per week

Two main types of wages paid: Regular time = 8 hours for a day or 40 hours in a week Overtime = > 40 hours in a week, > 80 every two weeks

Only Hourly employees get paid overtime

What is the overtime rate of pay? Paid 1.5 times or time and ½ of your hourly wage

PAYROLLPAYROLL SYSTEMSYSTEM

Example: as an hourly employee you are paid $9.25 an hour, paid weekly and you worked 44 hours:

What is the Regular Wage Earned? 9.25 X 40 regular hours

What is the overtime wage Earned? Determine Overtime Rate:

Multiply hourly wage X 1.5 or 9.25 X 1.5 Do not round the hourly rate to two decimal places

if more than two decimals

Multiply overtime rate by overtime hours Round final number to 2 decimal places

What is the total wage for one week? Regular wage of 9.25 X 40 Plus Overtime Wage Total Weekly Wage

ANALYZINGANALYZING AA PAYROLLPAYROLL TIMETIME

CARDCARDA time card is used to collect employee payroll hours Morning hours = hours before lunch Afternoon hours = hours after lunch (lunch is unpaid)

Time rounded to the nearest quarter hour Example: 7:58 = 12:02 =

12:59 = 5:06= Convert hours to .25, .50, .75 to calculate pay

15 minutes = .25 30 minutes = .50 45 minutes =.75

8:005:00

12:00

1:00

5:36 9:20

4. Calculate Regular Wage

CALCULATING EMPLOYEE HOURS CALCULATING EMPLOYEE HOURS WORKEDWORKED

3. Add Regular Hours and Hours OT columns and enter the totals.

2. Calculate overtime hours for each day.

1. Calculate regular hours for each day at $8.50 per hr

                 

Employee No 3          

Name     Richard Steidler      

Pay Period Ended  March 06, 2010      

                 

Morning Afternoon Overtime Hours  In Out In Out In Out Reg OT

1                

2 8:00 12:00 1:00 5:00       

3 7:56 12:02 12:59 5:03       

4 7:50 11:49 12:58 5:06 7:01 9:30    

5 7:57 12:03 1:11 5:10       

6 8:03 12:06 12:49 4:50 5:00 7:00    

7                

    Hours Rate Amount  

Regular      

Overtime      

Total Hours  Total

Earnings  

5. Calculate Overtime Wage

6. Total Hours and Earnings

Total Earnings: total pay due for a pay period before deductions (known as Gross Wage to employee)

CALCULATING EMPLOYEE HOURS CALCULATING EMPLOYEE HOURS WORKEDWORKED

                 

Employee No 3          

Name     Richard Steidler      

Pay Period Ended  March 06, 2010      

                 

Morning Afternoon Overtime Hours  In Out In Out In Out Reg OT

1                

2 8:00 12:00 1:00 2:00     5  

3 7:56 12:02 12:59 5:03     8  

4 7:50 11:49 12:58 5:06 7:01 9:30 8  2.5

5 7:57 12:03 1:11 5:10     8  

6 8:03 12:06 12:49 4:50  8  

7                    Hours Rate Amount  

Regular      

Overtime      

Total Hours  Total

Earnings  

                 

Employee No   3          

Name       Richard Steidler        

Pay Period Ended  March 20, 2010        

                 

Morning Afternoon Overtime Hours

  In Out In Out In Out Reg OT

1                

2 7:30 9:30 1:03 4:58   

3 8:00 12:04 12:56 5:00   

4 7:15 11:15 12:58 5:07 7:01 9:30

5 7:57 12:03 1:11 5:16   

6 7:48 11:50 12:49 4:50 6:00 7:00

7            

    Hours Rate Amount  

Regular      

Overtime      

Total Hours  Total

Earnings  

Work Together: Wage 9.59 On Your Own: 9.59

REVIEWREVIEW

WTG 12-1