1. Chapter 14 – Payroll Accounting, Taxes, & Reports
Accounting I
Chapter 14 – Payroll Accounting, Taxes, & Reports

2. Lesson 14-1
PAYROLL REGISTER
Lesson 14-1, page 332

3. ANALYZING PAYMENT OF PAYROLL
Lesson 14-1, page 333

4. JOURNALIZING PAYMENT OF A PAYROLL
December 15. Paid cash for semimonthly payroll, $ (total payroll, $3,803.75, less deductions: employee income tax, $273.00; social security tax, $247.26; Medicare tax, $57.07; health insurance premiums, $182.40; U.S. Savings Bonds, $35.00; United Way donations, $20.00). Check No. 312.
Accounts Affected
Salary Expense
Employee Income Tax Payable
Social Security Tax Payable
Medicare Tax Payable
Health Insurance Premiums Payable
U.S. Savings Bond Payable
United Way Donations Payable
Cash
Classification
Expense
Liability
Asset
Change
Increased
Decreased
Entered
Debit side
Credit side
Lesson 14-1, page 334

5. JOURNALIZING PAYMENT OF A PAYROLL4 2 5 3 1 6 7
1. Write the date.
2. Write the title of the account debited.
3. Write the check number.
4. Write the amount debited to Salary Expense.
5. Write the amount credited to Cash.
6. Write the titles of the accounts credited.
7. Write the credit amounts.
Lesson 14-1, page 334

6. Work Together &
On Your Own –
Page 335

7. TERMS REVIEW federal unemployment tax state unemployment tax
Lesson 14-2, page 340

8. TERMS REVIEW Federal Unemployment Tax
A federal tax used for state & federal administrative expenses of the unemployment program.
Lesson 14-2, page 338

9. TERMS REVIEW State Unemployment Tax
A state tax used to pay benefits to unemployed workers.
Lesson 14-2, page 338

10. UNEMPLOYMENT TAXABLE EARNINGS
Lesson 14-1
UNEMPLOYMENT TAXABLE EARNINGS 2 1 1 3
1. Enter accumulated earnings and total earnings for each employee.
2. Enter unemployment taxable earnings.
3. Total the unemployment taxable earnings column.
Lesson 14-2, page 337

11.         UNEMPLOYMENT TAXES
Calculate Unemployment Taxes—Federal    
Unemployment Federal Federal
Taxable Unemployment Unemployment
Earnings  Tax Rate = Tax
$  0.8% = $1.47
Calculate Unemployment Taxes—State    
Unemployment State State
Taxable Unemployment Unemployment
Earnings  Tax Rate = Tax
$  5.4% = $9.92
Lesson 14-2, page 338

12. JOURNALIZING EMPLOYER PAYROLL TAXES
December 15. Recorded employer payroll taxes expense, $315.72, for the semimonthly pay period ended Dec. 15. Taxes owed are: social security tax, $247.26; Medicare tax, $57.07; federal unemployment tax, $1.47; state unemployment tax, $9.92. Memorandum No. 63.
Accounts Affected
Payroll Taxes Expense
Soc. Security Tax Pay.
Medicare Tax Payable
Unemp. Tax Pay.—Fed.
Unemp. Tax Pay.—State
Classification
Expense
Liability
Change
Increased
Entered
Debit side
Credit side
Payroll Taxes Expense
Social Security Tax Payable
Medicare Tax Payable
normal balance
normal balance
normal balance 
315.72 
57.07 
247.26
Unemployment Tax Payable—Federal
Unemployment Tax Payable—State
normal balance
normal balance  
1.47
9.92
Lesson 14-2, page 339

13. JOURNALIZING EMPLOYER PAYROLL TAXES2 3 4 1 6 5
1. Write the date.
2. Write the expense account debited.
3. Write the memorandum number.
4. Write the debit amount.
5. Write the titles of the liability accounts credited.
6. Write the credit amounts.
Lesson 14-2, page 339

14. Work Together &
On Your Own –
Page 340

15. EMPLOYER ANNUAL REPORT TO EMPLOYEES OF TAXES WITHHELD
Lesson 14-3, page 341

16. EMPLOYER’S QUARTERLY FEDERAL TAX RETURN
1. Heading
2. Number of Employees 1
3. Total Quarterly Earnings
4. Income Tax Withheld
5. Employee and Employer Social Security and Medicare Taxes 2 3 4
6. Social Security plus Medicare Taxes 5 6
7. Total Taxes 7
8. Total Taxes for Each Month
9. Total Taxes 8 9
Lesson 14-3, page 342

17. PREPARING EMPLOYER’S QUARTERLY FEDERAL TAX RETURN
Calculate Social Security and Medicare Taxes    
Total Earnings  Tax Rate = Tax
Social Security $22,  13% = $2,934.75
Medicare $22, % = $
Calculate Social Security and Medicare Taxes    
Employee Employer
Social Social
Federal Income Security and Security and Federal Tax
Tax Withheld + Medicare Tax + Medicare Tax = Liability
Dec $ $ $ =
Dec $ $ = $873.16
Totals $ = $1,754.82
Lesson 14-3, page 343

18. EMPLOYER ANNUAL REPORTING OF PAYROLL TAXES
Lesson 14-3, page 344

19. Work Together &
On Your Own –
Page 345

20. FORM 8109, FEDERAL DEPOSIT COUPON
Lesson 14-1
FORM 8109, FEDERAL DEPOSIT COUPON
Lesson 14-4, page 347

21. JOURNALIZING PAYMENT OF LIABILITY FOR EMPLOYEE INCOME TAX, SOCIAL SECURITY TAX, AND MEDICARE TAX
January 15. Paid cash for liability for employee income tax, $542.00; social security tax, $985.40; and Medicare tax, $227.42; total, $1, Check No. 330.
Accounts Affected
Employee Inc. Tax Pay.
Social Security Tax Pay.
Medicare Tax Payable
Cash
Classification
Liability
Asset
Change
Decreased
Entered
Debit side
Credit side
Cash
Medicare Tax Payable
Social Security Tax Payable
Employee Inc. Tax Payable
normal balance
normal balance
normal balance 
542.00 
985.40 
227.42
normal balance
1,754.82 
Lesson 14-4 page 348

22. JOURNALIZING PAYMENT OF LIABILITY FOR EMPLOYEE INCOME TAX, SOCIAL SECURITY TAX, AND MEDICARE TAX1 3 5 4 2
1. Write the date.
2. Write the title of the three accounts debited.
3. Write the check number.
4. Write the three debit amounts.
5. Write the amount of the credit to Cash.
Lesson 14-4, page 348

23. PAYING THE LIABILITY FOR FEDERAL UNEMPLOYMENT TAX
Lesson 14-4, page 349

24. JOURNALIZING PAYMENT OF LIABILITY FOR FEDERAL UNEMPLOYMENT TAX
January 31. Paid cash for federal unemployment tax liability for quarter ended December 31, $8.40. Check No. 343.
Accounts Affected
Unemployment Tax Payable—Federal
Cash
Classification
Liability
Asset
Change
Decreased
Entered
Debit side
Credit side
Unemployment Tax Payable—Federal
Cash
normal balance
normal balance
8.40
8.40  
Lesson 14-4, page 350

25. JOURNALIZING PAYMENT OF LIABILITY FOR FEDERAL UNEMPLOYMENT TAX1 2 3 4 5
1. Write the date.
2. Write the title of the account debited.
3. Write the check number.
4. Write the debit amount.
5. Write the amount of the credit to Cash.
Lesson 14-4, page 350

26. JOURNALIZING PAYMENT OF LIABILITY FOR STATE UNEMPLOYMENT TAX1 2 3 4 5
1. Write the date.
2. Write the title of the account debited.
3. Write the check number.
4. Write the debit amount.
5. Write the amount of the credit to Cash.
Lesson 14-4, page 350

27. Work Together &
On Your Own –
Page 351