Payroll Accounting, Taxes, and Reports by K4X04V74


									Payroll Accounting,
Taxes, and Reports

       Chapter 13
      Accounting 1
      Mrs. Mason
Recording Payroll
 Payroll register column totals are the source
  of information needed to prepare a journal
  entry for payroll.
 Total earnings column of the payroll register
  is the debit amount for salary expense. This is
  the amount of money the employees actually
  earned, before deductions are subtracted.
 Net pay column is the credit amount for cash.
  This is the amount of cash that was actually
  paid to the employees.
Journalizing payment of payroll
 All other columns provide the other credit
  parts of the entry. These credits become
  liabilities, so add “payable” to the end of each
  column heading and you have your liability
Recording Employer Payroll Taxes
 Employer’s payroll taxes are business
  expenses --a payroll expense in addition to
  salaries paid.
 Employers must pay four separate payroll
     1. SS tax
     2. Medicare tax
     Federal unemployment tax
     State unemployment tax
Unemployment Taxable Earnings
 Total earnings subject to unemployment tax
  is referred to as unemployment taxable
 This is calculated by subtracting accumulated
  earnings from $7000 (the unemployment tax
 Calculating the unemployment taxable
  earnings is found on the employee earnings
  record and the current payroll register.
Unemployment Taxes
 The effective tax rate in most states is 0.8%
  for federal unemployment and 5.4% for state
 Tax is applied only to the unemployment
  taxable earnings, not total earnings.

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