1. Preparing Payroll Records
Chapter 12
Preparing Payroll Records

2. 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)

3. 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

4. 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

5. 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

6. 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

7. 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

8. 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

9. 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

10. 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

11. 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

12. Preparing payroll checks

13. 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

14. 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

15. 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