Payroll Records & Procedures

TITTLE
CONTENTS
UNIT ONE Payroll Laws and Regulations
	Payroll Laws and Regulations
	Federal Income Tax Laws
	State and Local Income Tax Laws
	Social Security Laws
	Required Payroll Records
	Federal Unemployment Tax Act and State Unemployment Tax Acts
	The Fair Labor Standards Act
	State Minimum Wage Laws
	Other Laws Affecting Wages
	Workers’ Compensation Insurance
	State Disability Benefit Laws
	Fair Employment Laws
	Pension Security Laws
	The Immigration Reform Act
	New Hire Reporting
	Summary
	Study Questions
	Discussion Questions
	Learning Through Practice Exercises
	Alternate Learning Through Practice Exercises
UNIT TWO New Employee
	New Employee Records
	Ingram Heating and Cooling
	A New Employee Joins the Company
	The Personnel File
	The Social Security Number
	Employment Eligibility Verification
	The Withholding Allowance Certificate
	New Hire Reporting to the States
	The Employee Earnings Record
	Confidentiality
	Summary
	Study Questions
	Discussion Questions
	Review Exercises
	Learning Through Practice Exercises
	Alternate Learning Through Practice Exercises
UNIT THREE  Time and Work
	Payroll Periods
	The Need for Time Records
	Timekeeping Devices and Systems
		Time Clocks and Time Cards
	Computing Time Worked
		Time Sheets
	Filing Time Records
	Dealing with Lateness to Work
		Finding a Solution
		Work-at-Home Arrangements
		Flextime Systems
	Work Records
		Production Records
		Sales Records
		Labor Distribution
	Other Kinds of Workers
		Temporary Workers
		Contract Workers
	Summary
	Study Questions
	Review Exercises
	Learning Through Practice Exercises
	Alternate Learning Through Practice Exercises
UNIT FOUR Determining Gross Earnings
	Determining Gross Earnings
	Computing Gross Earnings
	The Hourly Rate Plan
	Handling Overtime Payments
	Night Bonus
	Meal Break
	The Salary Plan
		Adjusting the Pay of Salaried Employees
		Biweekly, Semimonthly, and Monthly Salaries
	The Piece-Rate Plan
	Meeting FLSA Minimum Wage Requirements
	The Commission Plan
	The Salary-Plus-Commission Plan
	Bonuses and Profit-Sharing Payments
		Bonuses
		Profit-Sharing Payments
	Tips
	Accuracy in Payroll Work
	Summary
	Study Questions
	Review Exercises
	Problems
	Learning Through Practice Exercises
	Alternate Learning Through Practice Exercises
UNIT FIVE Determining Payroll Deductions
	Determining Payroll Deductions
	Determining Federal Income Tax
		The Wage-Bracket Method
		Other Systems for Determining Withholding Tax
	Reading the Wage-Bracket Tables Properly
		The Zero Allowance Column
		The Wage-Bracket Lines
		Using a Guide to Read the Wage-Bracket Lines
	Determining Social Security Tax
		Computing Social Security Tax
		Maximum Social Security Tax
	Determining Medicare Tax
	Earnings Not Subject to Social Security and Medicare Taxes
	State and Local Income Taxes
		Computing State Withholding Tax
		State Disability Insurance Tax
		State Unemployment Compensation Tax
		Garnishments
	Treatment of Tips for Federal Withholding Taxes
	Deductions Required by Union Contracts
	Voluntary Deductions
		Insurance
		Pension Plans
		Savings Plans
		Charitable Contributions
	Computing Net Pay
	Summary
	Study Questions
	Review Exercises
	Problems
	Learning Through Practice Exercises
	Alternate Learning Through Practice Exercises
UNIT SIX The Payroll Register
	The Payroll Register
	Using the Percentage Method with the Wage-Bracket Tables
	Computing California Income Tax when Earnings Exceed the Wage Brackets
	Format of the Payroll Register
		Making Entries in the Payroll Register
		Recording Hours Worked
		Entering Employee Earnings
		Dealing With Different Payroll Needs
		Payroll Deductions
		Computing and Recording Net Pay
		Totaling and Proving the Payroll Register
		Proving the Payroll Register
		Checking Payroll Computations for Accuracy
	Reading the Payroll Register
	Using the Payroll Register
	Summary
	Study Questions
	Review Exercises
	Problems
	Learning Through Practice Exercises
	Alternate Learning Through Practice Exercises
UNIT SEVEN Employee Earnings
	Employee Earnings Records
	The Format of the Employee Earnings Record
	Making Entries in the Employee Earnings Records
	Nearing Maximum Taxes
	Care in Making Entries
	Totaling the Employee Earnings Records
	Using Employee Earnings Records
	Internal Control of Payroll Records
	Retention of Payroll Records
	Summary
	Study Questions
	Discussion Questions
	Review Exercises
	Problems
	Learning Through Practice Exercises
	Alternate Learning Through Practice Exercises
UNIT EIGHT Paying Employees
	Paying Employees
	Paying in Cash
		Employee Receipts
		The Risks of Paying in Cash
	Paying by Check
		The Use of a Special Payroll Account
	Preparing Payroll Checks
		Writing Checks by Hand
		Typing Checks
		Voiding Checks
		Verifying the Accuracy of Checks
	Paying by Direct Deposit in Employee Checking Accounts
		Employee Pay Statements
	Payroll Processing by Service Bureaus
		A Service Bureau Client
	Computerized Payroll Procedures
	A Computerized Payroll System in a Small Business
	Computerized Payroll Accounting
	Internal Control
	Summary
	Study Questions
	Discussion Questions
	Review Exercises
	Problems
	Learning Through Practice Exercises
	Alternate Learning Through Practice Exercises
UNIT NINE Federal Payroll Taxes and Tax Returns
	Federal Payroll Taxes and Tax Returns
	The Employer’s Share of Social Security and Medicare Taxes
		Computing the Tax
		Social Security and Medicare Taxes on Tips
	Depositing Social Security and Medicare Taxes and Federal Income Taxes
		When to Deposit
		The Lookback Period
	Monthly Deposit Example
	Semiweekly Deposit Examples
	Deposits Made by Electronic Funds Transfer and by Check
	IRS Ruling Reduces Number of Deposits by Small Businesses
	Reporting Social Security, Medicare, and Federal Income Taxes
		Schedule B of Form 941, Employer’s Record of Federal Tax Liability
		Form 941, Employer’s Quarterly Federal Tax Return
		Form 941-V, Payment Voucher
		Form 8109, Federal Tax Deposit Coupon
		Completing Form 8109
	Deposit Exceptions
		Deposits on Banking Days
	Authorized Depositaries
	Forms W-2 and W-3
		Form W-2, Wage and Tax Statement
		Form W-3, Transmittal of Wage and Tax Statements
	Federal Unemployment Compensation Tax
		The Unemployment Insurance System
		Computing the FUTA Tax
		Depositing the FUTA Tax
		Reporting the FUTA Tax
		Completing Form 940-EZ, Employer’s Annual Federal Unemployment (FUTA) Tax Return
	Summary
	Study Questions
	Review Exercises
	Problems
	Learning Through Practice Exercises
	Alternate Learning Through Practice Exercises
UNIT TEN  State Payroll Taxes and Tax Reports
	State Payroll Taxes and Tax Reports
	Reporting Newly Hired Employees
	State Unemployment Compensation Tax
		Computing the SUTA Tax
		Responding to Unemployment Benefit Claims
		State Disability Insurance Tax
	Workers’ Compensation Insurance
		An Example of Workers’ Compensation Insurance
	Special State Payroll Taxes
	State Income Tax
		Obtaining Information About State Income Tax
		Depositing and Reporting State Withholding and Payroll Taxes
		Due Dates for Depositing State Withholding and Payroll Taxes
	Quarterly Wage and Withholding Report
	Annual Reconciliation Statement
	Wage and Tax Statements
	Local Income Tax
	Setting Up a Payroll Calendar
	Summary
	Study Questions
	Discussion Questions
	Review Exercises
	Problems
	Learning Through Practice Exercises
	Alternate Learning Through Practice Exercises
UNIT ELEVEN Accounting for Payroll
	Accounting for Payroll
	The Subsidiary Payroll Module Within the Accounting System
	Accounting Records for Payroll
	Double-Entry Accounting
	Chart of Accounts
	Understanding the Ledger Accounts
		Salaries and Wages
		Amounts Withheld from Salaries and Wages
		The Employer’s Payroll Taxes
	Journalizing and Posting Entries for Payroll
		Recording Employee Earnings and Deductions
		Computing the Employer’s Payroll Taxes
		Social Security and Medicare Taxes
		Federal and State Unemployment Taxes
		Other Employer Taxes
		Recording the Employer’s Payroll Taxes
	Journalizing and Posting Payment of the Payroll
	Journalizing and Posting Deposits of Payroll Taxes
		Frequency of Tax Deposits
		Remitting Federal Withholding Taxes
		Remitting State Withholding Taxes
		Remitting Federal Unemployment Tax
		Remitting State Unemployment Tax and ETT Tax
	Journalizing and Posting Payment of Amounts Withheld for Voluntary Deductions
	Accounting for Employee Bonus Payments
	Summary
	Study Questions
	Review Exercises
	Problems
	Learning Through Practice Exercises
	Alternate Learning Through Practice Exercises
APPENDIX
Glossary of Payroll Terms
INDEX