Chapter 5 Reading Notes (PayR)-Employee Net Pay and Pay Method

docx

School

Emily Griffith Technical College *

*We aren’t endorsed by this school

Course

101

Subject

Accounting

Date

Jul 1, 2024

Type

docx

Pages

57

Uploaded by CommodoreDovePerson1087

Report
Compute Employee Net Pay Bullet Point Notes on Computing Employee Net Pay Introduction ● Focus on computing employee net pay from gross income. ● Net pay is the amount an employee receives after deductions. Key Steps in Pay Computation 1. Start with Gross Pay ○ Initial amount earned before any deductions. 2. Subtract Pre-Tax Deductions ○ Reduces total taxable earnings. 3. Compute Taxes on Taxable Earnings ○ Includes federal income tax, Social Security tax, Medicare tax, etc. 4. Deduct Computed Taxes ○ Reduces the remaining pay. 5. Deduct Other Voluntary or Mandated Deductions ○ Includes union dues, charitable contributions, garnishments, etc. 6. Result is Net Pay ○ Final amount after all deductions. Tax Changes in 2020 ● Tax Cuts and Jobs Act of 2017 introduced a new Form W-4. ● Tax calculations based on filing status, pay frequency, taxable earnings, and spouse's employment. Mandatory Deductions ● Federal Income Tax ● Social Security Tax
● Medicare Tax ● State and Local Taxes ○ Example: Denver's "head tax" and Mountain View's tax due to Google's presence. Example of Net Pay Computation ● Employee: Myle ● Gross Pay: $2,000 (biweekly) ● Deductions: ○ Pre-tax medical insurance: $50 ○ Cafeteria plan: $75 ○ 401(k) contribution: $60 (3% of gross) ● Taxable Earnings: $1,815 ○ *$1,815 has a tax bracket of $83.00 and the $2,000 credit for a dependent under 17 is divided by 26 for a per pay period credit amount of $76.92, leaving $6.08 federal income tax. ● Taxes: ○ Federal income tax: $6.08 ○ Social Security tax: $116.25 ■ 2,000 − 50 − 75 = 1,875 × 0.062 = 116.25 ○ Medicare tax: $27.19 ■ 2,000 − 50 − 75 = 1,875 × 0.0145 = 27.19 ○ West Virginia state income tax: $108.90 ■ 1,815 x 0.06 = 108.90 ● Other Deductions: ○ Charitable contribution: $10 ○ Union dues: $62 ○ Garnishment: $120 ● Net Pay: $1,364.58
Grossed-Up Pay ● Used when an employer wants to give a specific net amount as a bonus. ● Calculate gross pay to cover all taxes and achieve the desired net pay. Example of Grossing Up Pay ● Employee: Sawyer ● Bonus Desired: $150 ● Total Tax Rate for Bonus: 29.65% (22% federal income tax + 6.2% Social Security tax + 1.45% Medicare tax) ● Net Tax Rate: 70.35% (100% - 29.65%) ● Gross Pay Calculation: $150 / 0.7035 = $213.22 Determine Federal Income Tax Withholding Accounts Introduction to Mandatory Deductions
Your preview ends here
Eager to read complete document? Join bartleby learn and gain access to the full version
  • Access to all documents
  • Unlimited textbook solutions
  • 24/7 expert homework help
● Focus on mandatory deductions that must be withheld from employee pay. ● Federal Income Tax: Employee-only tax; no employer contribution required. Federal Income Taxes Overview ● Purpose: Withheld tax serves as an employee’s deposit against annual income taxes. ● Form W-4: Information provided by employees is used to calculate the withheld amount. ● Employer's Role: Acts as a collector and depositor of federal income tax funds. Calculation Methods for Federal Income Tax ● Pre-Tax Deductions: Reduce federal taxable income. ● Manual Calculation Methods: ○ Wage Bracket Method ○ Percentage Method ● IRS Publication 15-T: Issued starting in 2020 for income tax calculations, considering the existence of multiple Form W-4 versions. ● Form W-4 Usage: ○ Employees hired before the law change can retain their older W-4 (2019 or earlier). ○ New employees must use the W-4 for their year of hire. Examples and Impact on Employee Pay ● Tax Tables: Provided in Publication 15-T to match new criteria. ● Impact of Tax Deductions: Examples illustrate how tax deductions affect net pay.
Key Points ● Federal income tax withholding reduces the amount an employee might owe when filing a tax return. ● Consistent reduction for pre-tax items regardless of the method used for tax calculation. Federal Income Pre-Tax Computation Examples Gross Pay Less 401(k) and Insurance Example ● Employee: Brady ● Gross Wages: $950 ● Pre-Tax Deductions: ○ 401(k): 10% of gross pay ○ Health Insurance: $56.90 per pay period ● Calculations: ○ 401(k) deduction: $950 × 10% = $95 ○ Taxable Pay: $950 - $95 - $56.90 = $798.10 Effect of Fixed Amount vs. Percentage Deduction for 401(k) Contribution on Taxable Wages ● Employee: Cain ● Gross Wages: $1,125 ● Fixed Amount Deductions: ○ 401(k): $100 per pay period ○ Health Insurance and AFLAC: $113.80 ● Calculations: ○ Taxable Pay: $1,125 - $100 - $113.80 = $911.20 ● Percentage-Based Deduction: ○ 401(k): 3% of gross pay ○ Health Insurance and AFLAC: $113.80 ● Calculations: ○ 401(k) deduction: $1,125 × 3% = $33.75 ○ Taxable Pay: $1,125 - $33.75 - $113.80 = $977.45
Notes on FICA Taxes ● Taxable Wages for FICA: ○ Gross Pay - Qualified Medical = Taxable wages for Social Security and Medicare ■ Taxable contributions are not exempt from FICA taxes ○ Example: $1,125 - $113.80 = $1,011.20 Form W-4 Changes Starting in 2020 ● Criteria for Federal Income Tax Withholding: ○ Filing status (Single, Married Filing Jointly, Married Filing Separately, Head of Household) ○ Multiple jobs or spouse's employment ○ Dependents under 17 and other dependents ● Prior Method: ○ Based on marital status and number of dependents ○ Often resulted in insufficient tax withholding Example: Manual Payroll Tax Computation Using Form W-4, No Pre-Tax Deductions ● Employee: Tania ● Annual Salary: $48,550 (paid semimonthly) ● Filing Status: Married, filing jointly ● Dependents: Two under 17 years of age ● Spouse's Annual Salary: $42,675 (paid biweekly) ● Form W-4 Details: ○ Box in Step 2(c) checked (easier method) ○ Multiple Jobs Worksheet used
Your preview ends here
Eager to read complete document? Join bartleby learn and gain access to the full version
  • Access to all documents
  • Unlimited textbook solutions
  • 24/7 expert homework help
● Tax Calculation: ○ Withholding per pay period: $3.33 (wage bracket) + $146.67 (extra withholding) = $150.00 (per pay period) Example: Manual Payroll Tax Computation Using Form W-4 and IRS Income Tax Withholding Assistant with Pre-Tax Deductions ● Employee: Bai ● Annual Salary: $75,500 (paid biweekly) ● Spouse's Annual Salary: $54,000 (paid semimonthly) ● Filing Status: Married, multiple jobs ● Dependents: Three under 17, one other dependent ● Pre-Tax Deductions: ○ 401(k): 5% of gross pay ○ Medical Insurance: $250 per pay period ● Form W-4 Details: ○ Box in Step 2(c) checked (easier method) ○ Multiple Jobs Worksheet used
Your preview ends here
Eager to read complete document? Join bartleby learn and gain access to the full version
  • Access to all documents
  • Unlimited textbook solutions
  • 24/7 expert homework help
● Calculations: ○ Period Salary: $75,500 / 26 = $2,903.85 ○ 401(k) deduction: $2,903.85 × 5% = $145.19 ○ Taxable Income: $2,903.85 - $145.19 - $250 = $2,508.66 ○ Federal Tax: $23.00 (per Publication 15-T) ○ Additional Withholding: $241.15 (Box 4(c) checked) ○ Total Federal Income Tax: $23.00 + $241.15 = $264.15 Additional Notes on FICA Taxes ● Taxable Wages for FICA: ○ Gross Pay - Qualified Medical = Taxable wages for Social Security and Medicare ○ Example: $2,903.85 - $250 = $2,653.85 Dependent Deduction Impact ● Dependents: Three under 17 and one other ● Federal Withholding Adjustment:
○ Federal withholding reduced by $250 dependent deduction ○ Example: Resulting federal withholding of $273 reduced by $250 = $23 Wage-Bracket Method for Federal Income Tax Wage-Bracket Method Overview ● Process: Identify marital status, number of exemptions, and taxable income. ● Publication 15-T: Use charts for withholding amounts. ● Manual Calculation: Apply withholding variables before tax calculation. ● Purpose: Estimate year-end federal tax liability. ● Automated Systems: Periodically check for updates, ensure validity. Example: Wage-Bracket Computation for Federal Income Tax, Single, Biweekly ● Employee: Bishop ● Annual Salary: $48,000 ● Pay Frequency: Biweekly ● Situations: ○ No Pre-Tax Deductions: ■ Period pay: $48,000 / 26 = $1,846.15 ■ Taxable income: $1,846.15 ■ Federal income tax: $153.00 ○ Pre-Tax Health Insurance ($75) and Supplemental Health Insurance ($55): ■ Period pay: $1,846.15 ■ Taxable income: $1,846.15 - $75 - $55 = $1,716.15 ■ Federal income tax: $139.00
Your preview ends here
Eager to read complete document? Join bartleby learn and gain access to the full version
  • Access to all documents
  • Unlimited textbook solutions
  • 24/7 expert homework help
○ Pre-Tax Health Insurance ($75), Supplemental Health Insurance ($55), and 401(k) Contribution ($100): ■ Period pay: $1,846.15 ■ Taxable income: $1,846.15 - $75 - $55 - $100 = $1,616.15 ■ Federal income tax: $127.00 ○ Note: Taxable income for Social Security and Medicare tax: $1,846.15 - $75 - $55 = $1,716.15 Example: Wage-Bracket Computation for Federal Income Tax, Married Filing Jointly, Semimonthly ● Employee: Robin ● Annual Salary: $36,000 ● Pay Frequency: Semimonthly ● Situations: ○ No Voluntary Pre-Tax Deductions: ■ Period pay: $36,000 / 24 = $1,500.00 ■ Taxable income: $1,500.00 ■ Federal income tax: $108.00 ○ Pre-Tax Health Insurance Deduction ($150): ■ Period pay: $1,500.00 ■ Taxable income: $1,500.00 - $150 = $1,350.00 ■ Federal income tax: $89.00 ○ Pre-Tax Health Insurance Deduction ($150) and 401(k) Contribution (4%): ■ Period pay: $1,500.00 ■ Taxable income: $1,500.00 - $150 - $60 = $1,290.00 ■ Federal income tax: $79.00 ○ Note: Taxable income for Social Security and Medicare tax: $1,500 - $150 = $1,350 Important Notes ● Range Boundaries: Use next bracket if income matches the top of the range.
● Manual vs. Automated: Manual method uses charts; automated systems require periodic checks. Example Adjustments ● Exact Range Values: Follow guidelines for values that match the range boundaries exactly. ● Additional Adjustments: Ensure calculations consider all relevant pre-tax deductions and variables. Percentage Method for Federal Income Tax Overview ● Purpose: Calculate employee withholding using tiered percentage layers. ● Publication 15-T: Provides tables for accurate withholding amounts. ● 2020 Changes: Introduction of tax credits changed computation to focus on consistency between annual tax filing and per-pay-period withholding. Comparison with Wage-Bracket Method ● Similarity: Both methods yield similar withholding results. ● Flexibility: Percentage method is more flexible for high-wage earners and uncommon pay periods. ● Simplicity: Wage-bracket method is simpler for manual computations. Process for Percentage Method (with Manual System) ● IRS Guidance: Follow tables published in 2022 for current method. ● Step-by-Step Example: Utilize data from Form W-4 and prior year income tax filing. Example: Single Employee, Percentage Method ● Employee: CS
● Marital Status: Single ● Dependents: Two under 17 (reported on Form W-4, 2022) ● Pay Frequency: Semimonthly ● Annual Salary: $51,000 ● Additional Income: None ● Deductions: No itemized or pre-tax deductions ● Form W-4 Step 2 Box: Not checked
Your preview ends here
Eager to read complete document? Join bartleby learn and gain access to the full version
  • Access to all documents
  • Unlimited textbook solutions
  • 24/7 expert homework help
Step-by-Step Example (Figure 5.1)
Your preview ends here
Eager to read complete document? Join bartleby learn and gain access to the full version
  • Access to all documents
  • Unlimited textbook solutions
  • 24/7 expert homework help
Your preview ends here
Eager to read complete document? Join bartleby learn and gain access to the full version
  • Access to all documents
  • Unlimited textbook solutions
  • 24/7 expert homework help
Your preview ends here
Eager to read complete document? Join bartleby learn and gain access to the full version
  • Access to all documents
  • Unlimited textbook solutions
  • 24/7 expert homework help
Comparison: Percentage Method vs. Wage-Bracket Method ● Employee: CS (same details as above) ● Comparison: Tax computation using both methods Step 1: Adjust the employee's wage amount 1a Total taxable wages for the period (Not pre-tax deductions for insurance, etc.) 1b Number of pay periods per year 1c Amount from Step 4(a) of CS's W-4 (oth
Your preview ends here
Eager to read complete document? Join bartleby learn and gain access to the full version
  • Access to all documents
  • Unlimited textbook solutions
  • 24/7 expert homework help
1d Divide amount on lc by the number on 1e Add lines la and Id 1f Enter the amount from Step 4(b) of the 1g Divide line If by the number on line 1b 1h Subtract lg from le. This is the adjusted Step 2: Figure the tentative withholding amount 2a Since Box 2 on CS's Form W-4 was not tables on the Percentage Method Table period. For Caroline, this is row three in Married Filing Separately." Enter the am row 2b Enter the amount of Column C of that r 2c Enter the percentage from Column D o Subtract line 2a from lh 2d 2e Multiply the amount on 2d by the perce 2f Add lines 2b and 2e. This is the tentativ Step 3: Account for tax credits 3a Enter the amount from Step 3 of CS's F dependents under the age of 17, the am 3b Divide the amount on line 3a by the nu
Your preview ends here
Eager to read complete document? Join bartleby learn and gain access to the full version
  • Access to all documents
  • Unlimited textbook solutions
  • 24/7 expert homework help
3C Subtract line 3b from line 2f. If zero or Step 4: Figure the final amount to withhold 4a Enter the additional amount to withhold W-4. CS has entered no additional amo 4b Add lines 3c and 4a. This is the amount employee's wages this pay period ● Wage-Bracket Method Percentage method Wage-Bracket method
Your preview ends here
Eager to read complete document? Join bartleby learn and gain access to the full version
  • Access to all documents
  • Unlimited textbook solutions
  • 24/7 expert homework help
Step 1: Adjusted wage amount $2,125.00 $2,125.00 Step 2: Tentative withholding amount $181.64 $182.00 Step 3: Account for tax credits $166.67 $166.67 Step 4: Figure the final amount to withhold $181.64 - 166.67 = $14.97 $182.00 - 166.67 = $1 Key Points ● Discrepancy: Slight differences due to rounding in the wage- bracket method. ● Manual System: Wage-bracket method is simpler. ● Software Packages: Default to percentage method for more accuracy. Example Summary ● Comparison: Totals from each method show slight variation. ● Recommendation: Use wage-bracket for manual, percentage for automated systems. Compute Social Security and Medicare Tax Withholding Social Security Tax Introduction ● Mandate: Social Security Act of 1935 mandates withholding certain taxes. ● FICA Taxes: Comprise Social Security and Medicare taxes, involving both employer and employee contributions.
Your preview ends here
Eager to read complete document? Join bartleby learn and gain access to the full version
  • Access to all documents
  • Unlimited textbook solutions
  • 24/7 expert homework help
● Deposit Process: Employers deposit federal withholding tax, Social Security, and Medicare amounts simultaneously. ● Reporting: IRS report does not break down tax amounts for individual employees. ● Contact for Queries: Social Security Administration ( www.ssa.gov , 800-772-1213). Social Security Tax Overview ● Purpose: Provides coverage for illness, retirement, disability, and old age. ● Evolution: Now a tax levied on all employees up to an annual income limit. ● Wage Base: Changes annually; $147,000 in 2022. ○ Tax Rate: 6.2% on wages up to the wage base. ○ Eligible Wages: May differ from gross pay due to pre- tax deductions and wage base maximum. Year-to-Date (YTD) Pay Calculation ● Importance: Ensures employees do not overpay as they approach the wage base. ● Automated Calculation: Often handled by payroll software like QuickBooks. ● Manual Computation: Requires period pay, pay frequency, and number of prior pay periods.
Your preview ends here
Eager to read complete document? Join bartleby learn and gain access to the full version
  • Access to all documents
  • Unlimited textbook solutions
  • 24/7 expert homework help
Example Computation for Social Security Taxable Pay Key Situations for Computation ● Highly Paid Employees: Monitor to prevent overpayment. ● Year-End Pay Periods: Ensure accurate tax withholding as employees approach wage base. Examples of Social Security Tax Computations Overview ● Purpose: Ensure accurate computation of Social Security taxes. ● Wage Base Cap: $147,000 for 2022. Only wages up to this cap are taxed at 6.2%. Example Computations
Your preview ends here
Eager to read complete document? Join bartleby learn and gain access to the full version
  • Access to all documents
  • Unlimited textbook solutions
  • 24/7 expert homework help
Key Points ● Employee Earnings Record: Crucial for tracking and computing Social Security taxes to avoid over-deductions. ● Employer and Employee Contributions: Both contribute equally to Social Security tax. ● Annual Wage Base: After reaching the cap, no further Social Security tax is withheld for the rest of the year. Retirement and Social Security Benefits ● Retirement Age: Increased to 67 for those born after 1960. ● Semi-Retired Employees: Monitor earnings as benefits phase out at certain thresholds ($19,560 and $51,960). ● Full Retirement Age: No phase-out on benefits for earnings above the cap. ● Higher-Waged Individuals: Earnings over the cap do not contribute to future benefits but working in retirement may increase benefits. Medicare Tax Overview ● Purpose: Provides basic health coverage for individuals qualified for Medicare benefits. ● Standard Rate: 1.45% on all wages earned, with no maximum wage base. Additional Medicare Tax ● Affordable Care Act of 2010: Introduced an additional 0.9% Medicare tax for highly compensated employees. ● Who Pays: Employee only; no employer match required. ● Wage Base for Additional Tax: ○ $200,000 for single, head of household, qualifying widow(er) with dependent child. ○ $250,000 for married employees filing jointly. ○ $125,000 for married employees filing separately.
Your preview ends here
Eager to read complete document? Join bartleby learn and gain access to the full version
  • Access to all documents
  • Unlimited textbook solutions
  • 24/7 expert homework help
Impact on Payroll ● Complexity: Increases complexity for payroll accountants. ● Employee Earnings Report: Requires high accuracy for tracking and reporting. Key Points ● Medicare Tax Rate: 1.45% on all wages, with no cap. ● Additional 0.9% Tax: Applies to wages above specific thresholds based on marital and tax filing status. ● Thresholds: This text uses $200,000 as a common cap for simplification unless otherwise noted. Examples of Medicare Tax Computations Overview ● Medicare Tax: Levied on both employers and employees to provide basic health coverage. ● Standard Rate: 1.45% on all wages. ● Additional Medicare Tax: 0.9% on wages above certain thresholds, paid by employees only. Example Computations
Your preview ends here
Eager to read complete document? Join bartleby learn and gain access to the full version
  • Access to all documents
  • Unlimited textbook solutions
  • 24/7 expert homework help
Important Notes ● Pre-Tax Deductions: Applicable wages may have pre-tax deductions affecting taxable income. ● FICA Tax Applicability: Social Security and Medicare taxes apply to gross pay unless exempt (e.g., Section 125 plans). Example: Social Security and Medicare Taxes with Pre-Tax Deductions ● Employee: Kris ● Annual Salary: $58,000 (paid biweekly) ● Pre-Tax Deductions: ○ Health insurance: $155 ○ 401(k): 5% of gross pay ● Computation: ○ Gross pay per period: $58,000 / 26 = $2,230.77 ○ Taxable income: $2,230.77 - $155 - $111.54 (5% of $2,230.77) = $1,964.23 ○ Federal income tax: $168.00 ○ Social Security tax: $128.70 (6.2% of $2,075.77) ○ Medicare tax: $30.10 (1.45% of $2,075.77) ○ Net pay: $1,637.43 Example: Net Pay for Highly Compensated Employee ● Employee: Malone (CEO) ● Annual Salary: $320,000 (paid biweekly) ● Pre-Tax Deductions: Health insurance: $250, 401(k): $1,000 ● Key Dates: ○ January 14: ■ Gross pay: $12,307.69 ■ Taxable income: $12,057.69 ■ Federal income tax: $1,940.55 ■ Social Security tax: $747.58 ■ Medicare tax: $174.84 ■ Net pay: $8,194.72
Your preview ends here
Eager to read complete document? Join bartleby learn and gain access to the full version
  • Access to all documents
  • Unlimited textbook solutions
  • 24/7 expert homework help
○ July 1: ■ YTD pay: $144,692.28 ■ Social Security wage base reached; remaining taxable amount: $2,307.69 ■ Federal income tax: $1,940.55 ■ Social Security tax: $143.08 ■ Medicare tax: $174.84 ■ Net pay: $8,799.22 ○ October 21: ■ YTD pay: $241,153.80 ■ Additional Medicare tax applies: 0.9% on wages over $250,000 ■ Federal income tax: $1,940.55 ■ Medicare tax: $203.74 (including additional tax) ■ Net pay: $8,862.68 Record-Keeping ● Accuracy: Maintaining accurate records is crucial for proper FICA tax deductions. ● Systems: Whether manual, automated, or outsourced, companies are responsible for ensuring accurate deductions and records. Calculate State and Local Income Taxes Overview ● State and Local Taxes: Applied in addition to federal income tax, Social Security, and Medicare. ● IRS Report: All but nine states withhold income taxes. States Without Income Tax ● Nine States: ○ Alaska ○ Florida ○ New Hampshire*
Your preview ends here
Eager to read complete document? Join bartleby learn and gain access to the full version
  • Access to all documents
  • Unlimited textbook solutions
  • 24/7 expert homework help
○ Tennessee ○ South Dakota ○ Nevada ○ Texas ○ Washington ○ Wyoming ● *Note: New Hampshire only taxes interest and dividend income. 2022 Changes ● State Income Tax Rates: Many states reduced their rates. ● Standard Deductions: Increases were noted in many states. ● Federal Taxable Income Tie: Most states tie their taxable income to federal taxable income with some exceptions. Effective Dates ● January 1, 2022: Some state reductions went into effect. ● Retroactive to January 1, 2021: Other reductions applied retroactively. ● Future Trigger Events: Some reductions will occur based on future conditions. Increases in 2022 ● Areas with Increased Rates: ○ New York ○ District of Columbia Budget and Pension Liabilities ● Potential for New Taxes: States with budget shortfalls and unfunded pension liabilities may consider implementing or increasing income taxes in the future. State-Specific Taxes Overview
Your preview ends here
Eager to read complete document? Join bartleby learn and gain access to the full version
  • Access to all documents
  • Unlimited textbook solutions
  • 24/7 expert homework help
● State Income Tax: Withheld by all states except nine. ● Other State Taxes: Additional taxes may apply depending on the state. Examples of State-Specific Taxes ● California: ○ State Disability Insurance (SDI): 1.10% of gross pay up to $145,600 in 2022. ○ Personal Income Tax (PIT): Varies by income, pay frequency, and marital status. ○ Calculation Methods: Wage bracket and percentage method. ● Pennsylvania: ○ Flat Rate: 3.07% on all employees. Complexity of Multistate Operations ● Single-State Operations: Simplified tax requirements. ● Multistate Operations: Increased complexity due to different state tax requirements. ● Remote Work Considerations: COVID-19 pandemic led to employees working in different states; proper tax filings needed for work locations. State Income Tax Information ● Availability: Through state revenue departments and computerized payroll software. ● Multiple State Identification Numbers: Necessary if operating in multiple states, even without physical presence. Example: Net Pay with State Income Tax ● Employee: Angel ● Location: Joliet, Illinois ● Marital Status: Married, filing jointly (one dependent under 17) ● Pay Frequency: Weekly
Your preview ends here
Eager to read complete document? Join bartleby learn and gain access to the full version
  • Access to all documents
  • Unlimited textbook solutions
  • 24/7 expert homework help
● Wages: $850 per week ● Pre-Tax Deductions: ○ Insurance: $50 ○ 401(k): $50 ● Taxable Income Calculation: $850 - $50 - $50 = $750.00 ● State Income Tax Calculation: $750 × 4.95% = $37.13 Example Computation Details ● Gross Earnings: $850.00 ● 401(k) Contribution: $50.00 ● Insurance: $50.00 ● Taxable Wages for Federal W/H: $750.00 ● Taxable Wages for FICA: $800.00 ● Social Security Tax: $49.60 ● Medicare Tax: $11.60 ● State W/H Tax: $37.13 ● Charitable Contribution: $0.00 ● Union Dues: $0.00 ● Garnishment: $0.00 ● Net Pay: $651.67
Your preview ends here
Eager to read complete document? Join bartleby learn and gain access to the full version
  • Access to all documents
  • Unlimited textbook solutions
  • 24/7 expert homework help
Additional Notes ● Federal W/H Tax: $0.00 (Assuming due to pre-tax deductions and tax bracket) ● Maintaining Accuracy: Essential to keep accurate records for proper state and federal tax calculations. ● Pre-Tax Deductions Impact: Pre-tax deductions such as 401(k) and insurance reduce taxable income for state and federal taxes. Local Income Taxes Overview ● Local Income Taxes: Levied by certain municipalities and counties. ● Payroll Accountants: Need to be aware of local taxes that apply to their business. ● Information Sources: City and county government websites often provide details. Example of Local Income Tax: Denver, Colorado ● Occupational Privilege Tax (OPT): Also known as the "head tax". ○ Employee Tax: $5.75 per month for employees on wages exceeding $500. ○ Employer Tax: $4 per month for employers with any business activity in Denver. ○ Application: Applied after any pre-tax deductions. Example: Net Pay with Local Income Tax ● Employee: Shale ● Employer: Keiser and Sons, Denver, Colorado ● Annual Salary: $39,000 (paid biweekly) ● Marital Status: Married, filing jointly with no dependents ● Pre-Tax Deductions:
Your preview ends here
Eager to read complete document? Join bartleby learn and gain access to the full version
  • Access to all documents
  • Unlimited textbook solutions
  • 24/7 expert homework help
○ Health insurance: $100 ○ 401(k) contribution: 6% of gross pay ($90) ● Tax Computations: ○ Gross Earnings: $1,500.00 ○ Taxable Wages for Federal W/H: $1,310.00 ○ Taxable Wages for FICA: $1,400.00 ○ Federal W/H Tax: $32.00 ○ Social Security Tax: $86.80 (6.2% of $1,400) ○ Medicare Tax: $20.30 (1.45% of $1,400) ○ State W/H Tax: $59.61 (4.55% of $1,310) ○ Denver OPT: $2.88 ○ Union Dues: Not specified ○ Garnishment: Not specified ○ Net Pay: $1,108.64 Calculation Details ● Gross Earnings: $1,500.00 ● 401(k) Contribution: $90.00 (6% of $1,500) ● Insurance: $100.00 ● Cafeteria Plan: Not specified ● Taxable Wages for Federal W/H: $1,310.00 ● Taxable Wages for FICA: $1,400.00 ● Social Security Tax: $86.80 ● Medicare Tax: $20.30 ● State W/H Tax: $59.61 ● Denver OPT: $2.88 ● Union Dues: Not specified ● Garnishment: Not specified ● Net Pay: $1,108.64
Your preview ends here
Eager to read complete document? Join bartleby learn and gain access to the full version
  • Access to all documents
  • Unlimited textbook solutions
  • 24/7 expert homework help
Importance of Accurate Record-Keeping ● Payroll Accuracy: Ensuring accurate deductions for local, state, and federal taxes. ● Compliance: Adhering to tax regulations for all applicable jurisdictions. Apply Post Tax Deductions Overview ● Post-Tax Deductions: Applied after gross pay, pre-tax deductions, and taxes withheld. ● Listing Deductions: All deductions should be listed on the paycheck attachment in both pay-period and year-to-date amounts. Types of Post-Tax Deductions ● Court-Mandated Deductions: Examples include child support and alimony. ● Governmental Debts: Examples include tax levies and student loans. ● Employee Repayments: Repayments for advances or overpayments.
Your preview ends here
Eager to read complete document? Join bartleby learn and gain access to the full version
  • Access to all documents
  • Unlimited textbook solutions
  • 24/7 expert homework help
Process 1. Determine Gross Pay: Calculate the employee's total earnings before any deductions. 2. Apply Pre-Tax Deductions: Subtract deductions such as health insurance and retirement contributions. 3. Calculate Taxes Withheld: Deduct federal, state, and local taxes. 4. Apply Post-Tax Deductions: Deduct any remaining obligations such as court-mandated or voluntary deductions. Examples of Post-Tax Deductions ● Child Support: Deducted as per court orders. ● Tax Levies: Government-imposed deductions for unpaid taxes. ● Student Loan Repayments: Payments deducted as mandated by the government. ● Repayment of Advances: Deductions for previously given salary advances or overpayments. Importance ● Transparency: Ensures employees understand their deductions. ● Accuracy: Ensures correct net pay computation and compliance with legal obligations. Net Pay Computation ● Final Step: Subtract post-tax deductions from the amount remaining after pre-tax deductions and taxes to determine the net pay. Charitable Contributions Overview ● Charitable Contributions: Employees may choose to contribute part of their pay to charitable organizations.
Your preview ends here
Eager to read complete document? Join bartleby learn and gain access to the full version
  • Access to all documents
  • Unlimited textbook solutions
  • 24/7 expert homework help
● Post-Tax Deduction: Taken after taxes because it may be deducted from gross income on the annual tax return. Example: Charitable Contribution ● Employee: Perry ● Employer: Working Environments, Winchester, New Hampshire ● Annual Salary: $29,000 (paid weekly) ● Marital Status: Single, no dependents ● Pre-Tax Deduction: ○ Health insurance: $25 ● Charitable Contribution: ○ United Way: $10 per pay period Net Pay Computation ● Gross Earnings: $557.69 ● 401(k) Contribution: Not specified ● Insurance: $25.00 ● Cafeteria Plan: Not specified ● Taxable Wages for Federal W/H: $532.69 ● Taxable Wages for FICA: $532.69 ● Federal W/H Tax: $30.00 ● Social Security Tax: $33.03 (6.2% of $532.69) ● Medicare Tax: $7.72 (1.45% of $532.69) ● State W/H Tax: Not specified ● Charitable Contribution: $10.00 ● Union Dues: Not specified ● Garnishment: Not specified ● Net Pay: $451.94
Your preview ends here
Eager to read complete document? Join bartleby learn and gain access to the full version
  • Access to all documents
  • Unlimited textbook solutions
  • 24/7 expert homework help
Importance of Charitable Contributions ● Employee Choice: Allows employees to support charitable causes automatically. ● Tax Deduction: Can be deducted from gross income on the annual tax return, providing potential tax benefits. Garnishments Overview ● Garnishments: Court-mandated deductions such as child support obligations, liens, and consumer credit repayment. ● Title III of the CCPA: Limits the amount or percentage of pay deductions for garnishments. ● Post-Tax Basis: Deductions taken after taxes because they are viewed as obligations that must be paid out of post-tax income.
Your preview ends here
Eager to read complete document? Join bartleby learn and gain access to the full version
  • Access to all documents
  • Unlimited textbook solutions
  • 24/7 expert homework help
Maximum Garnishments Based on Pay Frequency (Table 5-1) Maximum Percentage by Garnishment Type (Table 5-2) Example: Child Support Garnishment ● Employee: Ash ● Employer: Kennesaw Mills ● Annual Salary: $49,500 (paid semimonthly) ● Marital Status: Single, one dependent under 17 ● Pre-Tax Deductions: ○ Health insurance: $100 ○ 401(k): 3% of gross pay ● State Income Tax Rate: 6% ● Court-Ordered Garnishment: $300 per pay period for child support ● Gross Pay: $2,062.50
Your preview ends here
Eager to read complete document? Join bartleby learn and gain access to the full version
  • Access to all documents
  • Unlimited textbook solutions
  • 24/7 expert homework help
Net Pay Computation Disposable Income Calculation for Garnishment ● Gross Pay: $2,062.50 ● Less: ○ Federal income tax: $71.38
Your preview ends here
Eager to read complete document? Join bartleby learn and gain access to the full version
  • Access to all documents
  • Unlimited textbook solutions
  • 24/7 expert homework help
○ State income tax: $114.04 ○ Social Security tax: $121.68 ○ Medicare tax: $28.46 ● Total Disposable Income: $1,726.93 ● Percent of Garnishment to Disposable Income: 17.4% Importance of Compliance ● Accuracy: Ensuring garnishments do not exceed legal maximums. ● Record-Keeping: Maintaining accurate records for compliance with court orders and legal requirements. Consumer Credit Garnishment Overview ● Consumer Credit Garnishment: Like student loans, considered an obligation paid out of after-tax earnings. ● Maximum Garnishment Rule: 25% of disposable income. Example: Consumer Credit Garnishment ● Employee: Monad ● Employer: Level Two Gallery, Ogden, Utah ● Annual Salary: $38,500 (paid biweekly) ● Marital Status: Single, no dependents ● State Income Tax Rate: 4.95% ● Pre-Tax Deductions: ○ Health insurance: $50 ○ 401(k) plan: $30 ● Post-Tax Deductions: ○ Charitable contribution (United Way): $15 ○ Consumer credit garnishment: $100 per pay period
Your preview ends here
Eager to read complete document? Join bartleby learn and gain access to the full version
  • Access to all documents
  • Unlimited textbook solutions
  • 24/7 expert homework help
Net Pay Computation Disposable Income Calculation ● Gross Pay: $1,480.77 ● Less: ○ Federal income tax: $100.43
Your preview ends here
Eager to read complete document? Join bartleby learn and gain access to the full version
  • Access to all documents
  • Unlimited textbook solutions
  • 24/7 expert homework help
○ State income tax: $69.34 ○ Social Security tax: $88.71 ○ Medicare tax: $20.75 ● Total Disposable Income: $1,201.54 ● Percent of Garnishment to Disposable Income: 8.3% Lump-Sum Distributions Subject to Garnishment ● General Guideline: If the distribution was for services rendered by the employee, it may be garnished. ● Examples: ○ Sign-on bonuses ○ Performance or productivity bonuses ○ Commissions ○ Holiday pay ○ Retroactive pay ○ Termination pay ○ Any other bonuses or incentive payments Union Dues Overview ● Union Dues: Employees in a collective bargaining unit usually pay dues for representation. ● CCPA Disposable Income Limits: Do not pertain to union dues as they are not court-mandated. ● Voluntary Deduction: Union dues are a voluntary deduction by the employee. Example: Union Dues ● Employee: Foster ● Employer: Pacific High School, Washington State ● Annual Salary: $67,500 (paid biweekly) ● Marital Status: Married, filing jointly with 2 dependents under 17
Your preview ends here
Eager to read complete document? Join bartleby learn and gain access to the full version
  • Access to all documents
  • Unlimited textbook solutions
  • 24/7 expert homework help
● Union Dues: $50 per pay period ● Pre-Tax Deductions: ○ 401(k) plan: $150 ○ Section 125 cafeteria plan: $100 ● Net Pay Computation: ○ Gross Earnings: $2,596.15 ○ 401(k) Contribution: $150.00 ○ Section 125 Plan: $100.00 ○ Taxable Wages for Federal W/H: $2,346.15 ○ Taxable Wages for FICA: $2,496.15 ○ Federal W/H Tax: $0 (adjusted for dependents) ○ Social Security Tax: $154.76 ○ Medicare W/H Tax: $36.19 ○ State W/H Tax: Not specified ○ Charitable Contribution: Not specified ○ Union Dues: $50.00 ○ Net Pay: $2,105.20 Employee Advances and Overpayments: ○ Advances: Money given in anticipation of pay, repaid as a post-tax deduction.
Your preview ends here
Eager to read complete document? Join bartleby learn and gain access to the full version
  • Access to all documents
  • Unlimited textbook solutions
  • 24/7 expert homework help
○ Overpayments: Due to errors, treated as post-tax deductions when corrected. ○ Example: Maricopa County Community College payroll system upgrade caused discrepancies, requiring collaboration to address under- and overpayments. ● COVID-19 Pandemic: ○ Hazard Pay Omission: Essential workers often did not receive hazard pay for working in hazardous conditions during the pandemic. Importance ● Compliance: Ensuring correct deduction and repayment of advances and overpayments. ● Record-Keeping: Maintaining accurate records for deductions and addressing discrepancies promptly. Discuss Employee Pay Methods Overview ● Net Pay: After computing net pay, the next step is to give employees access to their money. ● Common Payment Methods: Cash, check, direct deposit, and paycard. ● Each Method: Has its own advantages and disadvantages. Cash ● Oldest Form: One of the oldest methods but not widely used in contemporary payroll. ● Common Uses: Day laborers, temporary helpers, odd jobs. ● Management Challenges: ○ Difficult to track and control. ○ Requires written receipt signed by the employee. ○ Must have cash on hand, increasing theft risk. ○ Payroll taxes must be withheld, requiring preparation.
Your preview ends here
Eager to read complete document? Join bartleby learn and gain access to the full version
  • Access to all documents
  • Unlimited textbook solutions
  • 24/7 expert homework help
● Employee Convenience: Provides inherent liquidity. ● Security Challenges: ○ Ensuring employees receive and acknowledge the correct payment. ○ A signed and dated receipt with gross pay, deductions, and net pay details is crucial. ○ Prevents future disputes regarding timely compensation. Importance of Cash Receipts ● Employee Receipt: ○ Must contain information about gross pay, deductions, and net pay. ○ Employee must sign and date the receipt. ○ Helps prevent future compensation disputes. ● Employer Responsibility: ○ Ensures accurate payment acknowledgment. ○ Maintains record of payment and receipt for security and tracking purposes. Check Payments Overview ● Paper Checks: Common method for employee compensation. Advantages: ● Traceability and Simplicity: Offers accounting record traceability. ● Security: Reduces vulnerability of maintaining large amounts of cash. ● Programs: QuickBooks and Sage100 Cloud allow printing paychecks on preprinted forms. ● Legal Security: Issued to a specific employee, only they can legally convert it to cash.
Your preview ends here
Eager to read complete document? Join bartleby learn and gain access to the full version
  • Access to all documents
  • Unlimited textbook solutions
  • 24/7 expert homework help
Disadvantages ● Bank Account Reconciliation: Complications if employees delay depositing checks. ● Potential Issues: Lost or destroyed checks require voiding and reissuing. ● Unbanked Employees: Challenges and costs for employees without bank accounts. ● Declining Use: Other payment methods are becoming more popular. Best Practices 1. Payroll-Only Checking Account: Prevents issues with the main business account. 2. Handling Payroll Checks: ○ Maintain Records: Note use of each check, especially voided, lost, or never cashed checks. ○ Unclaimed Property Account: For uncashed payroll checks. ○ Escheatment Compliance: Comply with state laws for unclaimed payroll checks. Escheatment Policy ● State Comptroller of New York: Uncashed payroll checks are escheated on predetermined dates. ● 2022 Statistics: Over $17 billion in escheated funds in state custody. Check Fraud Indicators ● Red Flags: ○ Changes in font type between address and employee name. ○ Low check numbers (1,001–1,500). ○ Evidence of typewriter use. ○ Stains or discolorations.
Your preview ends here
Eager to read complete document? Join bartleby learn and gain access to the full version
  • Access to all documents
  • Unlimited textbook solutions
  • 24/7 expert homework help
○ "Payroll" or "load" notations in memo line. ○ Handwritten additions (e.g., recipient's phone number). ○ Absence of bank’s or recipient’s address. ○ Missing or identical check numbers on multiple checks. Vulnerability and Transition ● Vulnerability: Paper checks are more vulnerable to fraud than electronic transfers. ● Transition: Many employers are moving to direct deposits or paycards to protect assets. Check Writing Requirements ● Numerical and Written Amount: Must match for bank acceptance. Direct Deposit Overview ● Direct Deposit: Employee compensation deposited directly into the individual’s bank account. ● Advantages for Employers:
Your preview ends here
Eager to read complete document? Join bartleby learn and gain access to the full version
  • Access to all documents
  • Unlimited textbook solutions
  • 24/7 expert homework help
○ Traceability: Similar to checks, traceable through the employer’s bank and optional paper pay advice. ○ Paper Waste Reduction: Promotes “green” business practices. ○ Cost Savings: Approximately $5.91 savings per employee per pay period (Association for Financial Professionals). ○ Efficiency: Reduces payroll processing time, freeing payroll accountants for other tasks. Advantages for Employees ● Immediate Access: Pay is immediately available in their bank account. ● Convenience: Eliminates the need to travel to the bank to deposit a paper check. ● Requirement: Employees must have a bank account to receive direct deposit. Best Practices ● Online Portal Access: ○ Secure Viewing: Employees can securely view their pay advice and pay history online. ○ Self-Maintenance: Allows employees to manage payroll records linked with human resources data. ● Security Measures: ○ Data Encryption: Protects against hacking. ○ Identity Verification: Ensures secure access. ○ Site Security: Prevents unauthorized access. Federal Communications Commission (FCC) Guidelines ● Employer Data Security Procedures: ○ Selecting Data: Guidelines on what data to include on employee-accessible websites.
Your preview ends here
Eager to read complete document? Join bartleby learn and gain access to the full version
  • Access to all documents
  • Unlimited textbook solutions
  • 24/7 expert homework help
○ Password Strength: Recommendations for strong passwords. ○ Update Intervals: Regular updates to maintain security. ○ Data Archiving: Proper storage and archiving of data to ensure safety and compliance. Paycards Overview ● Paycards: Debit cards onto which employers electronically transmit employee pay. ● History: ○ Started in the 1990s, popularized by Comerica for over- the-road truck drivers. ○ Accepted nearly everywhere, similar to conventional MasterCard. Advantages ● No Bank Account Required: Employees do not need a bank account to access their pay. ● Flexibility: Can be used as a debit card for purchases, online transactions, and avoiding check-cashing fees. ● Financial Accessibility: Beneficial for the 13 million unbanked households in the U.S. ● Convenience: Provides financial freedom and ease of use for employees. Disadvantages ● Security Risks: Paycards can be lost or stolen. ● Transaction Limits: Challenges such as withdrawal limits or cash back at POS purchases. ● State Escheatment Laws: Subject to laws governing unclaimed funds.
Your preview ends here
Eager to read complete document? Join bartleby learn and gain access to the full version
  • Access to all documents
  • Unlimited textbook solutions
  • 24/7 expert homework help
Regulation and Protection ● Regulation E: ○ Initially protected consumers’ bank deposits. ○ Extended to cover payroll funds transferred to paycards in 2006 (12 CFR Part 205). ○ Ensures protection from loss of funds in the event of bank issues. Security Measures ● Employer Responsibilities: ○ Secure storage of paycard numbers. ○ Use of encryption software like QuickBooks for employee files. ● Card Issuer Responsibilities: ○ Compliance with Regulation E regarding card loss or theft. ● Technology Enhancements: ○ Visa Advanced Authorization technology for real-time fraud detection. ○ Predictive analytics to detect unusual card usage, improving security and reliability. Popularity and Usage ● Growth in Popularity: Due to flexibility and convenience for both employers and employees. ● Implementation: Requires accurate tracking of hours and compensation based on marital status and withholdings. ● Future Outlook: Continues to be a viable option with advancements in security and fraud prevention technology. Key Points ● Financial Inclusion: Provides a payment method for employees without bank accounts.
Your preview ends here
Eager to read complete document? Join bartleby learn and gain access to the full version
  • Access to all documents
  • Unlimited textbook solutions
  • 24/7 expert homework help
● Cost Savings: Avoids check-cashing fees and reduces administrative costs. ● Security: Enhanced measures to prevent fraud and ensure safe transactions. Cryptocurrency Overview ● Cryptocurrency: Uses Internet technology for secure money transmission from one wallet/account to another. ● Not Physical Currency: Exists only in electronic form. ● Blockchain Technology: Provides security by transmitting data packets through many computers, making transactions difficult to isolate. Advantages ● No International Exchange Rates: Not subject to fluctuations. ● Instantaneous Transfer: Transactions are nearly instant. Disadvantages ● Volatility: No centralized authority oversees the value, leading to potential underpayment if the currency value drops. ● Lack of Regulation: Limited governmental guidance, leading to potential compliance issues. ● Not Recommended by FLSB: Cryptocurrencies are not considered "cash or a negotiable instrument at par." Recordkeeping Requirements ● Equivalency: Ensure the cryptocurrency value paid is equivalent to the cash amount. ● Additional Documentation: Required for compliance and validation of payments.
Your preview ends here
Eager to read complete document? Join bartleby learn and gain access to the full version
  • Access to all documents
  • Unlimited textbook solutions
  • 24/7 expert homework help
Examples and Adoption ● BitPay: Started offering payroll via cryptocurrency in 2020, allowing employers to pay employees without a Bitcoin account. Charges a 1% fee for the service. ● Legal Viability: Only payment of bonuses is currently allowed by the Fair Labor Standards Board, with added recordkeeping. Trends to Watch ● Taxes and Payment Methods: Employee net pay changes annually due to legal developments. ● Developments Since 2019: ○ Affordable Care Act health insurance requirements. ○ State and local changes to sick-leave compensation. ○ Tax-deferred pension plan contributions. ○ Public awareness of cost-of-living pay raises. ○ Expanded regulatory guidance on data privacy and security (e.g., GDPR). Future Trends ● Digital Payroll Disbursement: Increasing demand for quick payroll access. ● Separation of Payroll Functions: Access payroll amounts via a single platform. ● On-Demand Pay: Employees can access earned payroll amounts at their discretion. ● Increasing Regulation: In response to online security and accessibility needs. ● Pandemic Alterations: Changes to working hours, location, and COVID-19 precautions.
Your preview ends here
Eager to read complete document? Join bartleby learn and gain access to the full version
  • Access to all documents
  • Unlimited textbook solutions
  • 24/7 expert homework help
Your preview ends here
Eager to read complete document? Join bartleby learn and gain access to the full version
  • Access to all documents
  • Unlimited textbook solutions
  • 24/7 expert homework help

Related Documents

ACCT 406 Wk2 Q5.pdf
Question 1 - Chp 4 Homework 14th Ed_.pdf
ACCT 406 Wk2 Q7.pdf
impoetancia de.docx
ACCT Exam 4 Sample Study Questions + Answers.pdf
Question 1 of 3 - Chp 4 Homework 14th Ed_.pdf
Financial Statement Analysis Module 6.docx
ACC 630 10-1 Journal.docx
5. IRS Form 1040 Worksheet - Spring 2024.pdf
ACC 640 1-2 Memo.docx
Analysis5.docx
Screenshot 2024-06-30 213722.png
Related Questions
The account that should be credited for the total income tax withheld from employee's earnings is ○ a. FICA Tax Expense. ○ b. Employee Income Tax Expense. ○ . FICA Tax Payable ○ d. Employee Income Tax Payable.
The total amount og deduction from an employee's gross pay is solve this question
Use (a) the percentage method and (b) the wage-bracket method to compute the federal income taxes to withhold from the wages or salaries of each employee.
Wage and tax statement data on employer FICA tax Ehrlich Co. began business on January 2. Salaries were paid to employees on the last day of each month, and social security tax, Medicare tax, and federal income tax were withheld in the required amounts. An employee who is hired in the middle of the month receives half the monthly salary for that month. All required payroll tax reports were filed, and the correct amount of payroll taxes was remitted by the company for the calendar year. Early in the following year, before the Wage and Tax Statements (Form W-2) could be prepared for distribution to employees and for filing with the Social Security Administration, the employees' earnings records were inadvertently destroyed. None of the employees resigned or were discharged during the year, and there were no changes in salary rates. The social security tax was withheld at the rate of 6.0% and Medicare tax at the rate of 1.5% on salary. Data on dates of employment, salary rates, and…
Subject - account  Please help me.  Thankyou.
Use (a) the percentage method and (b) the wage-bracket method to compute the federal income taxes to withhold from the wages or salaries of each employee. Amount to Be Withheld Percentage Method Employee Ruiz, S. Flume, X. Farley, H. Comey, P. Hanks, R.. Marital Status SSMMM No. of Withholding Allowances 2 1 6 Gross Wage or Salary $1,040 weekly 2,190 weekly 1,890 biweekly 2,315 semimonthly. 3,200 monthly Wage-Bracket Method
Identify all correct statements concerning payrolls andrelated payroll costs.a. Both employers and employees pay Social Security andMedicare taxes.b. Workers’ compensation premiums are withheld fromemployees’ wages.c. An employer’s total payroll costs usually exceed totalwages expense by about 71⁄2 percent.d. Under current law, employers are required to pay SocialSecurity taxes on employees’ earnings, but they are notrequired to pay for health insurance.
Gross pay is:   Deductions withheld by an employer   Salaries after taxes are deducted   Total compensation earned by an employee before any deductions   The amount of the paycheck
Take home pay or net pay means: a. gross pay less all deductions b. gross pay plus the amount paid for you by your employer for SSS premiums and Medicare Contributions c. amount earned per hour times number of hours worked d. gross pay less income tax withheld
can you help with C & D? thanks :)
1-Compute and record the employee’s SUTA Contributions.(employees pay 0.06% on total gross pay). 2-Compute and record the Kipley Company’s SUTA and FUTA contributions
Computing Federal Income Tax Using the table (Refer to Figure 8-4 in the text.), determine the amount of federal income tax an employer should withhold weekly for employees with the following marital status, earnings, and withholding allowances: Marital Status Total Weekly Earnings Number of Allowances Amount of Withholding (a) S $364.80 2 (b) S 445.80 1 (c) M 493.40 3 (d) S 493.60 0 (e) M 702.70 5
1. In a journal entry for employee payroll, what type of account is credited to record each of the amounts withheld from employee earnings? Answer:   A.    Asset     B.    Liability     C.    Revenue     D.    Expense 2. Match the taxes or act to the year it was established. Social Security tax Employee Retirement Income Security Act Patient Protection and Affordable Care Act       2010 1974 1937 3. A _____ sets aside funds to be used for health-care expenses. Answer:   A.    flexible spending account     B.    Payroll Deduction IRA     C.    SIMPLE IRA plan     D.    403(b) plan
SEE MORE QUESTIONS
Recommended textbooks for you
Text book image
Century 21 Accounting Multicolumn Journal
Accounting
ISBN:9781337679503
Author:Gilbertson
Publisher:Cengage
Text book image
Century 21 Accounting General Journal
Accounting
ISBN:9781337680059
Author:Gilbertson
Publisher:Cengage
Text book image
College Accounting, Chapters 1-27
Accounting
ISBN:9781337794756
Author:HEINTZ, James A.
Publisher:Cengage Learning,
Text book image
College Accounting (Book Only): A Career Approach
Accounting
ISBN:9781337280570
Author:Scott, Cathy J.
Publisher:South-Western College Pub
Text book image
Cornerstones of Financial Accounting
Accounting
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Cengage Learning
SEE MORE TEXTBOOKS
Related Questions
SEE MORE QUESTIONS
Recommended textbooks for you
Text book image
Century 21 Accounting Multicolumn Journal
Accounting
ISBN:9781337679503
Author:Gilbertson
Publisher:Cengage
Text book image
Century 21 Accounting General Journal
Accounting
ISBN:9781337680059
Author:Gilbertson
Publisher:Cengage
Text book image
College Accounting, Chapters 1-27
Accounting
ISBN:9781337794756
Author:HEINTZ, James A.
Publisher:Cengage Learning,
Text book image
College Accounting (Book Only): A Career Approach
Accounting
ISBN:9781337280570
Author:Scott, Cathy J.
Publisher:South-Western College Pub
Text book image
Cornerstones of Financial Accounting
Accounting
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Cengage Learning
SEE MORE TEXTBOOKS