Preparing Payroll Records Chapter 12 Preparing Payroll Records

12.1 Preparing Payroll Time Cards Salary – money paid for employee services Pay period – period covered by a salary payment Payroll – total amount earned by all employees for a pay period Total earnings – total pay due for a pay period before deductions (gross earnings/pay)

CALCULATING EMPLOYEE HOURS WORKED page 342 1. Calculate the number of regular hours for each day and enter the amounts. 1 2. Calculate the number of overtime hours and enter the amounts. 3. Add Hours Reg and Hours OT columns and enter the totals. 2 4. Add the Hours column. 3 4 LESSON 12-1

CALCULATING EMPLOYEE TOTAL EARNINGS page 343 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. 1 2 4 3 5 LESSON 12-1

12.2 Payroll tax withholdings Payroll taxes – taxes based on the payroll of a business Withholding allowance – a deduction from total earnings for each person legally supported by a taxpayer, including the employee

EMPLOYEE’S WITHHOLDING ALLOWANCE CERTIFICATE page 346 3 2 1 4 5 1. Write the employee’s name and address 2. 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. LESSON 12-2

EMPLOYEE’S INCOME TAX WITHHOLDING – MARRIED PERSONS page 348 1 2 3 1. Select the appropriate table. 2. Locate the employee’s total earnings. 3. Intersection of wages and number of allowances column. LESSON 12-2

Payroll tax withholdings Social security tax – a federal tax paid for old-age, survivors, and disability insurance Medicare tax – a federal tax paid for hospital insurance Tax base – the maximum amount of earnings on which a tax is calculated

12.3 Preparing payroll records Payroll register – a business form used to record payroll information Net pay – total earnings paid to an employee after payroll taxes and other deductions Employee earnings record – a business form used to record details affecting payments made to an employee

PAYROLL REGISTER 1. Pay period date page 351 1 2 11 4 5 6 7 8 9 10 3 13 12 1. Pay period date 8. Health insurance premium deductions 2. Payment date 9. Other employee payroll deductions 3. Employee personal data 10. Total deductions 4. Earnings 11. Net pay 5. Federal income tax withheld 12. Total, prove, and rule 6. Social security tax withheld 13. Check number 7. Medicare tax withheld LESSON 12-3

12.4 EMPLOYEE EARNINGS RECORDS page 353 1. Last day of quarter 4 2. Employee personal data 5 3. Beginning accumulated earnings 1 2 4. Pay period 3 5. Earnings, deductions, net pay 6 6. Updated accumulated earnings 7 7. Total and prove LESSON 12-3

Preparing payroll checks

Preparing payroll checks Direct deposit – done through an EFT (electronic funds transfer) Separate payroll checking account Easily traceable Protects and controls payroll payments Information for payroll checks comes from the payroll register Payroll taxes are classified as liabilities

PAYROLL BANK ACCOUNT 1 2 1. Prepare the check stub. page 356 1 2 1. Prepare the check stub. 2. Prepare the check. LESSON 12-4

EMPLOYEE’S PAYROLL CHECK page 357 1 2 1. Prepare the check stub of each employee’s payroll check. 2. Prepare each employee’s payroll check. LESSON 12-4