Accounting 1Chapter 12Preparing Payroll RecordsPaying
EmployeesPayroll time cards (p. 341)Employee number and NamePay
Period EndingMorning and AfternoonOvertimeTotal Hours Regular and
OT
Calculating Hours WorkedTime clocked OUT am -Time clocked IN am
= Hours Worked amTime clocked OUT pm Time clocked in pm = Hours
Worked pmHours worked am + Hours worked pm = Total Regular Hours
for that day (usually 8)Anything after 40 hours is usually
OTCalculating EarningsRegular hours * Regular Rate = Regular
Earnings
Overtime: Regular Rate * 1.5 = Overtime Earnings
Regular earnings + OT earnings = Total EarningsDetermining
Payroll Tax WithholdingEmployers are required to withhold employee
payroll tax from each employees paycheck.Payroll tax is a
percentage of an employees gross pay.Many states require that
employers withhold state, city, and/or county income tax as well as
federal income taxes.The amount withheld from an employees gross
pay is determined by the employees martial status and number of
dependents.Each employee is required to complete a W-4 form.
(Employees withholding allowance certificate) which provides the
employer with the information need to deduct income tax.Employee
income tax withholding tables (pg. 348)Tables are made for single
and married persons for various pay periods (weekly, biweekly,
semimonthly, monthly and daily misc.)1. select appropriate table2.
locate total earnings3. Follow across to the number of withholding
allowances claimed.
Employee Social Security and Medicare TaxSocial Security Tax is
for old-age, survivors, and disability insurance. (6.2%)Medicare
Tax is for hospital insurance for individuals over 65 years old.
(1.45%)Social Security and Medicare tax is calculated as a
percentage of gross payThe max amount paid out is called a tax base
and is adjusted each year.
