0. Unit 3 Accounting for a Payroll System
Chapter 12 Payroll Accounting
Chapter 13 Payroll Liabilities and Tax Records
Glencoe Accounting Unit 3 Chapter 13 Copyright © by The McGraw-Hill Companies, Inc. All rights reserved.

1. Journalizing and Posting the Payroll
SECTION 13.1
Analyzing and Journalizing the Payroll
Each type of payroll liability is recorded in a separate account.
Type of Deduction
Ledger Account
Federal Income Tax
Social Security Tax
Medicare Tax
Hospital Insurance Premiums
Glencoe Accounting Unit 3 Chapter 13 Copyright © by The McGraw-Hill Companies, Inc. All rights reserved.

2. Journalizing and Posting the Payroll
SECTION 13.1
Type of Deduction
Ledger Account
Federal Income Tax
Employee’s Federal Income Tax Payable
Social Security Tax
Medicare Tax
Hospital Insurance Premiums
Glencoe Accounting Unit 3 Chapter 13 Copyright © by The McGraw-Hill Companies, Inc. All rights reserved.

3. Journalizing and Posting the Payroll
SECTION 13.1
Type of Deduction
Ledger Account
Federal Income Tax
Employee’s Federal Income Tax Payable
Social Security Tax
Social Security Tax Payable
Medicare Tax
Hospital Insurance Premiums
Glencoe Accounting Unit 3 Chapter 13 Copyright © by The McGraw-Hill Companies, Inc. All rights reserved.

4. Journalizing and Posting the Payroll
SECTION 13.1
Type of Deduction
Ledger Account
Federal Income Tax
Employee’s Federal Income Tax Payable
Social Security Tax
Social Security Tax Payable
Medicare Tax
Medicare Tax Payable
Hospital Insurance Premiums
Glencoe Accounting Unit 3 Chapter 13 Copyright © by The McGraw-Hill Companies, Inc. All rights reserved.

5. Journalizing and Posting the Payroll
SECTION 13.1
Type of Deduction
Ledger Account
Federal Income Tax
Employee’s Federal Income Tax Payable
Social Security Tax
Social Security Tax Payable
Medicare Tax
Medicare Tax Payable
Hospital Insurance Premiums
Hospital Insurance Premiums Payable
Glencoe Accounting Unit 3 Chapter 13 Copyright © by The McGraw-Hill Companies, Inc. All rights reserved.

6. Journalizing and Posting the Payroll
SECTION 13.1
Posting the Payroll Entry
An example follows of the general journal entry and the individual ledger accounts after posting.
Glencoe Accounting Unit 3 Chapter 13 Copyright © by The McGraw-Hill Companies, Inc. All rights reserved.

7. Journalizing and Posting the Payroll
SECTION 13.1
Journalizing and Posting the Payroll
Glencoe Accounting Unit 3 Chapter 13 Copyright © by The McGraw-Hill Companies, Inc. All rights reserved.

8. Journalizing and Posting the Payroll
SECTION 13.1
Journalizing and Posting the Payroll
Glencoe Accounting Unit 3 Chapter 13 Copyright © by The McGraw-Hill Companies, Inc. All rights reserved.

9. Journalizing and Posting the Payroll
SECTION 13.1
Journalizing and Posting the Payroll
Glencoe Accounting Unit 3 Chapter 13 Copyright © by The McGraw-Hill Companies, Inc. All rights reserved.

10. Chapter 13, Section 2 Employer’s Payroll Taxes
What Do You Think?
Who shares the earnings tax burden with employees?
Glencoe Accounting Unit 3 Chapter 13 Copyright © by The McGraw-Hill Companies, Inc. All rights reserved.

11. Employer’s Payroll Taxes
SECTION 13.2
Key Terms
Federal Unemployment Tax Act (FUTA)
State Unemployment Tax Act (SUTA)
unemployment taxes
Payroll Tax Expense
Glencoe Accounting Unit 3 Chapter 13 Copyright © by The McGraw-Hill Companies, Inc. All rights reserved.

12. Employer’s Payroll Taxes
SECTION 13.2
Computing Payroll Tax Expenses
An employer must pay taxes on employees’ wages. These taxes include:
the employer’s FICA taxes
the federal unemployment tax
the state unemployment tax
Glencoe Accounting Unit 3 Chapter 13 Copyright © by The McGraw-Hill Companies, Inc. All rights reserved.

13. Employer’s Payroll Taxes
SECTION 13.2
Demo prob 13-2 & 13-3
Glencoe Accounting Unit 3 Chapter 13 Copyright © by The McGraw-Hill Companies, Inc. All rights reserved.

14. Tax Liability Payments and Tax Reports
SECTION 13.3
Key Terms
Form 8109
Electronic Federal Tax Payment System (EFTPS)
Form W-2
Form W-3
Form 941
Form 940
Glencoe Accounting Unit 3 Chapter 13 Copyright © by The McGraw-Hill Companies, Inc. All rights reserved.

15. Tax Liability Payments and Tax Reports
SECTION 13.3
FICA and Federal Income Taxes
A business makes a payment combining social security and Medicare taxes and employees’ federal taxes withheld. Form 8109 is sent with the payment to an authorized financial institution or Federal Reserve Bank.
The Electronic Federal Tax Payment System (EFTPS) is used by larger businesses to make deposits.
Glencoe Accounting Unit 3 Chapter 13 Copyright © by The McGraw-Hill Companies, Inc. All rights reserved.

16. Tax Liability Payments and Tax Reports
SECTION 13.3
FICA and Federal Income Taxes
Businesses pay FICA and federal income taxes withheld at regular intervals.
Glencoe Accounting Unit 3 Chapter 13 Copyright © by The McGraw-Hill Companies, Inc. All rights reserved.

17. Tax Liability Payments and Tax Reports
SECTION 13.3
FICA and Federal Income Taxes
Businesses pay FICA and federal income taxes withheld at regular intervals.
Glencoe Accounting Unit 3 Chapter 13 Copyright © by The McGraw-Hill Companies, Inc. All rights reserved.

18. Tax Liability Payments and Tax Reports
SECTION 13.3
FICA and Federal Income Taxes
Glencoe Accounting Unit 3 Chapter 13 Copyright © by The McGraw-Hill Companies, Inc. All rights reserved.

19. Tax Liability Payments and Tax Reports
SECTION 13.3
FICA and Federal Income Taxes
Glencoe Accounting Unit 3 Chapter 13 Copyright © by The McGraw-Hill Companies, Inc. All rights reserved.

20. Tax Liability Payments and Tax Reports
SECTION 13.3
State and Local Income Taxes
Businesses pay state and local income taxes withheld at regular intervals.
Glencoe Accounting Unit 3 Chapter 13 Copyright © by The McGraw-Hill Companies, Inc. All rights reserved.

21. Tax Liability Payments and Tax Reports
SECTION 13.3
State and Local Income Taxes
Businesses pay state and local income taxes withheld at regular intervals.
Glencoe Accounting Unit 3 Chapter 13 Copyright © by The McGraw-Hill Companies, Inc. All rights reserved.

22. Tax Liability Payments and Tax Reports
SECTION 13.3
State and Local Income Taxes
Businesses pay state and local income taxes withheld at regular intervals.
Glencoe Accounting Unit 3 Chapter 13 Copyright © by The McGraw-Hill Companies, Inc. All rights reserved.

23. Tax Liability Payments and Tax Reports
SECTION 13.3
State and Local Income Taxes
Businesses pay state and local income taxes withheld at regular intervals.
Glencoe Accounting Unit 3 Chapter 13 Copyright © by The McGraw-Hill Companies, Inc. All rights reserved.

24. Tax Liability Payments and Tax Reports
SECTION 13.3
Federal Unemployment Taxes
Most businesses pay the FUTA tax quarterly, unless it is less then $100 and only an annual payment is needed.
Glencoe Accounting Unit 3 Chapter 13 Copyright © by The McGraw-Hill Companies, Inc. All rights reserved.

25. Tax Liability Payments and Tax Reports
SECTION 13.3
Federal Unemployment Taxes
Most businesses pay the FUTA tax quarterly, unless it is less then $100 and only an annual payment is needed.
Glencoe Accounting Unit 3 Chapter 13 Copyright © by The McGraw-Hill Companies, Inc. All rights reserved.

26. Tax Liability Payments and Tax Reports
SECTION 13.3
Federal Unemployment Taxes
Most businesses pay the FUTA tax quarterly, unless it is less then $100 and only an annual payment is needed.
Glencoe Accounting Unit 3 Chapter 13 Copyright © by The McGraw-Hill Companies, Inc. All rights reserved.

27. Tax Liability Payments and Tax Reports
SECTION 13.3
Federal Unemployment Taxes
Most businesses pay the FUTA tax quarterly, unless it is less then $100 and only an annual payment is needed.
Glencoe Accounting Unit 3 Chapter 13 Copyright © by The McGraw-Hill Companies, Inc. All rights reserved.

28. Tax Liability Payments and Tax Reports
SECTION 13.3
State Unemployment Taxes
State unemployment taxes are usually paid quarterly.
Glencoe Accounting Unit 3 Chapter 13 Copyright © by The McGraw-Hill Companies, Inc. All rights reserved.

29. Tax Liability Payments and Tax Reports
SECTION 13.3
State Unemployment Taxes
State unemployment taxes are usually paid quarterly.
Glencoe Accounting Unit 3 Chapter 13 Copyright © by The McGraw-Hill Companies, Inc. All rights reserved.

30. Tax Liability Payments and Tax Reports
SECTION 13.3
State Unemployment Taxes
State unemployment taxes are usually paid quarterly.
Glencoe Accounting Unit 3 Chapter 13 Copyright © by The McGraw-Hill Companies, Inc. All rights reserved.

31. Tax Liability Payments and Tax Reports
SECTION 13.3
State Unemployment Taxes
State unemployment taxes are usually paid quarterly.
Glencoe Accounting Unit 3 Chapter 13 Copyright © by The McGraw-Hill Companies, Inc. All rights reserved.

32. Tax Liability Payments and Tax Reports
SECTION 13.3
Other Payroll Liabilities
Payments for voluntary deductions are also made.
Glencoe Accounting Unit 3 Chapter 13 Copyright © by The McGraw-Hill Companies, Inc. All rights reserved.

33. Tax Liability Payments and Tax Reports
SECTION 13.3
Other Payroll Liabilities
Payments for voluntary deductions are also made.
Glencoe Accounting Unit 3 Chapter 13 Copyright © by The McGraw-Hill Companies, Inc. All rights reserved.

34. Tax Liability Payments and Tax Reports
SECTION 13.3
Other Payroll Liabilities
Payments for voluntary deductions are also made.
Glencoe Accounting Unit 3 Chapter 13 Copyright © by The McGraw-Hill Companies, Inc. All rights reserved.

35. Tax Liability Payments and Tax Reports
SECTION 13.3
Other Payroll Liabilities
Payments for voluntary deductions are also made.
Glencoe Accounting Unit 3 Chapter 13 Copyright © by The McGraw-Hill Companies, Inc. All rights reserved.

36. Tax Liability Payments and Tax Reports
SECTION 13.3
Posting the Payment of Payroll Liabilities
This is an example of the individual ledger accounts after posting.
Glencoe Accounting Unit 3 Chapter 13 Copyright © by The McGraw-Hill Companies, Inc. All rights reserved.

37. Tax Liability Payments and Tax Reports
SECTION 13.3
Glencoe Accounting Unit 3 Chapter 13 Copyright © by The McGraw-Hill Companies, Inc. All rights reserved.

38. Tax Liability Payments and Tax Reports
SECTION 13.3
Glencoe Accounting Unit 3 Chapter 13 Copyright © by The McGraw-Hill Companies, Inc. All rights reserved.

39. Tax Liability Payments and Tax Reports
SECTION 13.3
Preparing Payroll Tax Forms
Employers complete a variety of payroll-related tax forms.
Glencoe Accounting Unit 3 Chapter 13 Copyright © by The McGraw-Hill Companies, Inc. All rights reserved.

40. Tax Liability Payments and Tax Reports
SECTION 13.3
Forms W-2 and W-3
Form W-2 is the Wage and Tax Statement and summarizes an employee’s earnings and withholdings for the calendar year. Form W-3 is the Transmittal of Wage and Tax Statements and summarizes the information from Forms W-2.
Glencoe Accounting Unit 3 Chapter 13 Copyright © by The McGraw-Hill Companies, Inc. All rights reserved.

41. Tax Liability Payments and Tax Reports
SECTION 13.3
Form W-2
Glencoe Accounting Unit 3 Chapter 13 Copyright © by The McGraw-Hill Companies, Inc. All rights reserved.

42. Tax Liability Payments and Tax Reports
SECTION 13.3
Form W-3
Glencoe Accounting Unit 3 Chapter 13 Copyright © by The McGraw-Hill Companies, Inc. All rights reserved.

43. Tax Liability Payments and Tax Reports
SECTION 13.3
Forms 941 and 940
Form 941 is the employer’s quarterly federal tax return and reports accumulated amounts of FICA and federal income taxes withheld from employees’ earnings and FICA taxes owed by the employer.
Form 940 is used to report the employer’s federal unemployment tax.
Glencoe Accounting Unit 3 Chapter 13 Copyright © by The McGraw-Hill Companies, Inc. All rights reserved.

44. Tax Liability Payments and Tax Reports
SECTION 13.3
Key Terms Review
Form 8109
Federal Deposit Tax Coupon; form sent with payment for FICA and federal income taxes or federal unemployment taxes.
Electronic Federal Tax Payment System (EFTPS)
System used by large businesses to deposit tax payments by electronic funds transfer.
Form W-2
Wage and Tax Statement; form that summarizes an employee’s earnings and amounts withheld for federal, state, and local taxes.
Glencoe Accounting Unit 3 Chapter 13 Copyright © by The McGraw-Hill Companies, Inc. All rights reserved.

45. Tax Liability Payments and Tax Reports
SECTION 13.3
Key Terms Review
Form W-3
Transmittal of Wage and Tax Statements; summarizes the information contained on the employees’ Forms W-2 and accompanies the Forms W-2 sent to the federal government.
Form 941
Employer’s Quarterly Federal Tax Return; form used to report accumulated amounts of FICA and federal income tax withheld from employees’ earnings for the quarter, as well as FICA tax owed by the employer.
Glencoe Accounting Unit 3 Chapter 13 Copyright © by The McGraw-Hill Companies, Inc. All rights reserved.

46. Tax Liability Payments and Tax Reports
SECTION 13.3
Key Terms Review
Form 940
Form that reports the employer’s federal unemployment taxes.
Glencoe Accounting Unit 3 Chapter 13 Copyright © by The McGraw-Hill Companies, Inc. All rights reserved.