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LESSON 12-3

LESSON 12-3. Preparing Payroll Records. DEDUCTIONS:. Three types of Deductions from Gross wage Required: Federal Income, Social Security, and Medicare Health Insurance Premiums: varies by company Premiums based on marital status: individual or family

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LESSON 12-3

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  1. LESSON 12-3 Preparing Payroll Records

  2. DEDUCTIONS: Three types of Deductions from Gross wage • Required: • Federal Income, Social Security, and Medicare • Health Insurance Premiums: varies by company • Premiums based on marital status: individual or family • Voluntary: Other deductions requested by employee • B = buying US savings Bonds • UW = United Way contributions Total Earnings – Total deductions = Net Pay • Net Pay: total earnings paid to an employee after payroll taxes and deductions

  3. Terms: • Payroll Register: business form used to record payroll information (for the business) • Summarizes payroll for one pay period • Shows the following on all employee’s • total earnings • Payroll deductions • Net pay of each employees and total for all employees • Hobby Shack payroll is semi-monthly – one register per payroll (so 2 per month)

  4. PAYROLL REGISTER 1 4 5 3 1. Pay period date – last day of payroll period. 2. Payment date = same as pay period date 3. Employee personal data 4. Earnings: Reg + OT = Total Earnings 5. Taxes: Federal, Soc Sec, and Medicare

  5. PROVE PAYROLL REGISTER 11 9 6 7 8 6. Health insurance premium deductions 7. Other employee payroll deductions (bonds & united way) 8. Total deductions (sum of all deductions) 9. Net pay = Total Earnings – Total Deductions 10. Total columns, Rule and Prove • Prove = Total Earnings – Total Deductions = Net Pay 11. Check Number: checks written after payroll is verified and manager approves

  6. Jan 31, Jane Smith, employee #2, is Married, with 2 allowances with total earnings of $1137.00. 15 dollars to United Way each period and $20 in bonds purchased.

  7. REPORTING PAYROLL TO GOVERNMENT • Employee earnings record: business form used to record details affecting payments made to an employee – sent to government • One record per employee • All pay periods for the quarter - one line per pay period (6) • One employee earning record per quarter • Quarterly Report sent to State & Federal Government • Reports Employee’s taxable earnings • Reports Taxes withheld • Reported on the Employee Earnings Record

  8. Quarter: • January 1 – March 31 • April 1 – June 30 • July 1 – September 30 • October 1 – December 31

  9. 4 5 2 EMPLOYEE EARNINGS RECORDS Data transferred from Payroll register to Employee Earnings Record after each pay period. 1. Last day of quarter 2. Employee personal data 1 3. Beginning accumulated earnings 3 4. Pay period 5. Earnings, deductions, net pay 6 7 6. Accumulated earnings = Total Earnings + Previous Accumulated Earnings 7. Enter Dec 31 earnings same way 8. Total and prove at end of quarter / Prove = Ttl Earnings – Ttl Deductions = Net Pay

  10. TERMS REVIEW • Payroll register: business form used to record payroll information (for the business) • Net pay: take home pay/pay after deductions/check amount • Employee earnings record: business form used to record details affecting payments made toanemployee (sent to government)

  11. REVIEW • WTG 12-3

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