Post on 30-Dec-2015
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LESSON 12-1
Preparing Payroll Time Cards
Did you know…Payroll is one of the largest
expenses to a business?
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New Vocabulary Salary: The money paid for employee
services Pay period: The period covered by a
salary payment Payroll: The total amount earned by all
employees for a pay period
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ANALYZING A PAYROLL TIME CARD
page 341
3 main sections: Morning, Afternoon and Overtime
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4. Add the Hours column.
CALCULATING EMPLOYEE HOURS WORKED
page 342
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3. Add Hours Reg and Hours OT columns and enter the totals.
2. Calculate the number of overtime hours and enter the amounts.
1. Calculate the number of regular hours for each day and enter the amounts.
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CALCULATING EMPLOYEE TOTAL EARNINGS page 343
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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.
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Audit Your UnderstandingWhat is a payroll? The total amount earned by all
employees for a period. AKA Salary Expense
How many hours were worked by a Hobby Shack employee who arrived at 8:12 and departed 12:02?
3.75 hours
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Audit Your Understanding
How does Hobby Shack calculate overtime earnings?
Overtime hours x overtime rate
What are the total earnings of a Hobby Shack employee who worked 44 hours in a week and earns $10 per hour?
$460 (40 x $10.00 + 4 x $15.00)
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Work Together
In book
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12-2 Determining Payroll Tax Withholding New Vocabulary
Payroll taxes: Taxes based on the payroll of a business Withholding allowance: A deduction from full earnings for
each person legally supported by a taxpayer, including the employee
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 (Tax base for this textbook: $87,000.00, Actual 2004 tax base set by Congress: $87,900.00. UPDATE: In 2009 it was moved up to $106,500.00)
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EMPLOYEE’S WITHHOLDING ALLOWANCE CERTIFICATE
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page 346
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EMPLOYEE’S INCOME TAX WITHHOLDING – MARRIED PERSONSpage 348
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22 331. Select the appropriate table.2. Locate the employee’s total earnings.3. Intersection of wages and number of allowances
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Audit Your UnderstandingWhere does the employer get the information used to determine
the amount of federal income tax to withhold from employees’ earning?
Form W-4, Employee’s Withholding Allowance Certificate
Employee federal income tax withholdings are based on what two factors?
Employee marital status and number of withholding allowances
Does the employer or employee pay Social Security tax and Medicare tax?
Both the employee and the employer
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Work Together In book
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12-3 Preparing Payroll Records New Vocabulary
Payroll register: A business form used to record payroll information
Employee earnings record: A business form used record details affecting payments made to an employee
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PAYROLL REGISTER77 88 99 1010 1111
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page 351
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EMPLOYEE EARNINGS RECORDSpage 353
7. Total and prove
5. Earnings, deductions, net pay
2. Employee personal data
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1. Last day of quarter
4. Pay period
3. Beginning accumulated earnings
6. Updated accumulated earnings
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Audit Your Understanding
What does the payroll register summarize? It summarizes the payroll for one pay period, and shows total
earnings, payroll withholdings, and net pay for all employees
How is net pay calculated? By subtracting total deductions from total earnings
Why do companies complete employee earning records? Because a business must send a quarterly report to federal
and state governments showing employee taxable earnings and taxes withheld from employee earnings.
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Work Together
In book
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LESSON 12-4Preparing Payroll Checks
1. Most companies pay their employees with checks written on a special payroll checking account.
2. A check for the total net pay is written on the general checking account to the payroll checking account.
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PAYROLL BANK ACCOUNT
1. Prepare the check stub.
page 356
2. Prepare the check.
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EMPLOYEE’S PAYROLL CHECK
page 357
1. Prepare the check stub of each employee’s payroll check.
2. Prepare each employee’s payroll check.
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Audit Your UnderstandingWhy does Hobby Shack have a separate checking
account for payroll checks? To help protect and control payroll payments
What is the source of the information that is recorded on each employee’s payroll check stub?
The payroll register
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Work Together
In book
Julian Beever’s Sidewalk Art
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The End