Chapter Nine
Employer Taxes,
Payments, and
Reports
Performance Objectives
1. Calculate the amount of payroll tax expense
and journalize the related entry
2. Journalize the entry for the deposit of
employees’ federal income taxes withheld
and FICA taxes (both employees’ withheld
and employer’s matching share) and
prepare the deposit coupon
3. Journalize the entries for the payment of
employer’s state and federal unemployment
taxes
4. Journalize the entry for the deposit of
employees’ state income taxes withheld
Copyright © Houghton Mifflin Company. All rights reserved.
9-2
Performance Objectives
5. Complete Employer’s Quarterly Federal Tax
Return, Form 941
6. Prepare W-2 and W-3 forms and Form 940
7. Calculate the premium for workers’
compensation insurance, and prepare the
entry for payment in advance
8. Determine the amount of the end-of-the-year
adjustments for (a) workers’ compensation
insurance and (b) accrued salaries and
wages, and record the adjustments
Copyright © Houghton Mifflin Company. All rights reserved.
9-3
Chapters 8 and 9: Overview
• Chapter 8
– Withhold employees’ taxes
– Create liabilities (payables)
• Chapter 9
– Pay off those liabilities
– Calculate and pay employer taxes
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9-4
Employer Identification Number
• The number assigned
each employer by the
Internal Revenue
Service
• Used to submit reports
and payments for FICA
taxes and federal
income tax withheld
• Listed on all deposit
slips
Copyright © Houghton Mifflin Company. All rights reserved.
• Individuals have Social
Security numbers
• Employers have
employer identification
number
• IRS uses both numbers
to track taxes
9-5
Employer’s Payroll Tax Expense
• A general expense account used for
recording:
– FICA tax (employer’s share)
– State unemployment tax (varies by state)
– Federal unemployment tax
• Paid by employer on behalf of employees
Copyright © Houghton Mifflin Company. All rights reserved.
9-6
Performance Objective 1
Calculate the amount of payroll tax
expense and journalize the related entry
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9-7
Payroll Tax Components
• FICA tax (employer’s share)
– Calculate Social Security amount (using 6.2%, $84,9000
ceiling)
– Calculate Medicare amount (using 1.45%)
• State unemployment tax (SUTA)
– Levied only on the employer in most states
– Rate varies by state (book assumes 5.4%, $7,000 ceiling)
– Pays subsistence benefits to unemployed workers
• Federal unemployment tax (FUTA)
– Levied only on the employer
– Rate varies (book assumes 0.80%, $7,000 ceiling)
– Used to administer federal unemployment fund
Copyright © Houghton Mifflin Company. All rights reserved.
9-8
Calculate Payroll Tax Expense
• Take taxable amounts directly from
payroll register
• FICA tax (employer’s share)
• State unemployment tax (varies by state)
• Federal unemployment tax
Name
Asino, Matte E.
Boritsky, Olga
Dray, Greg G.
Foulkes, Bob L.
Groyer, Milli K.
Kramer, Ada A.
Minkowitz, John L.
Orleons, Janet C.
Pinkovich, Mark S.
Romero, Sheila J.
Tivoli, Jake T.
Wilson, Sharlet D.
Totals
Total
Hours
46
45
49
40
40
40
55
40
44
45
40
52
Beginning
Cumulative
32,890.00
6,192.00
6,846.00
38,637.00
68,000.00
68,100.00
36,840.00
45,783.00
46,970.00
54,978.00
42,078.00
84,600.00
531,914.00
Regular
913.60
619.20
684.60
1,073.25
1,888.89
1,891.67
1,023.33
1,271.75
1,304.72
1,527.17
1,168.83
1,990.56
15,357.57
Earnings
Overtime
205.56
116.10
231.05
0.00
0.00
0.00
575.63
0.00
195.71
286.34
0.00
895.68
2,506.07
Copyright © Houghton Mifflin Company. All rights reserved.
Ending
Taxable Earnings
Total
Cumulative Unemployment
Social
Medicare
1,119.16
34,009.16
0.00
1,119.16
1,119.16
735.30
6,927.30
735.30
735.30
735.30
915.65
7,761.65
154.00
915.65
915.65
1,073.25
39,710.25
0.00
1,073.25
1,073.25
1,888.89
69,888.89
0.00
1,888.89
1,888.89
1,891.67
69,991.67
0.00
1,891.67
1,891.67
1,598.96
38,438.96
0.00
1,598.96
1,598.96
1,271.75
47,054.75
0.00
1,271.75
1,271.75
1,500.43
48,470.43
0.00
1,500.43
1,500.43
1,813.51
56,791.51
0.00
1,813.51
1,813.51
1,168.83
43,246.83
0.00
1,168.83
1,168.83
2,886.24
87,486.24
0.00
300.00
2,886.24
17,863.64
549,777.64
889.30 15,277.40
17,863.64
9-9
Calculate Payroll Tax Expense
Name
Asino, Matte E.
Boritsky, Olga
Dray, Greg G.
Foulkes, Bob L.
Groyer, Milli K.
Kramer, Ada A.
Minkowitz, John L.
Orleons, Janet C.
Pinkovich, Mark S.
Romero, Sheila J.
Tivoli, Jake T.
Wilson, Sharlet D.
Totals
Total
Hours
46
45
49
40
40
40
55
40
44
45
40
52
Beginning
Cumulative
Earnings
32,890.00
6,192.00
6,846.00
38,637.00
68,000.00
68,100.00
36,840.00
45,783.00
46,970.00
54,978.00
42,078.00
84,600.00
531,914.00
Do not use calculated
amounts from
employee’s deductions.
You must take totals
and recalculate
amounts. (As a result
there may be rounding
differences.)
Earnings
Regular
913.60
619.20
684.60
1,073.25
1,888.89
1,891.67
1,023.33
1,271.75
1,304.72
1,527.17
1,168.83
1,990.56
15,357.57
Overtime
205.56
116.10
231.05
0.00
0.00
0.00
575.63
0.00
195.71
286.34
0.00
895.68
2,506.07
Total
1,119.16
735.30
915.65
1,073.25
1,888.89
1,891.67
1,598.96
1,271.75
1,500.43
1,813.51
1,168.83
2,886.24
17,863.64
Payroll
Taxes
FICA Tax (Employer’s Share)
Social Security Tax
Medicare Tax
FICA Tax (Employer’s Share)
State Unemployment Tax
(Rates Vary)
Federal Unemployment Tax
(Rates Vary)
Copyright © Houghton Mifflin Company. All rights reserved.
Ending
Taxable Earnings
Cumulative
Social
Earnings
Unemployment Security
Medicare
34,009.16
0.00
1,119.16
1,119.16
6,927.30
735.30
735.30
735.30
7,761.65
154.00
915.65
915.65
39,710.25
0.00
1,073.25
1,073.25
69,888.89
0.00
1,888.89
1,888.89
69,991.67
0.00
1,891.67
1,891.67
38,438.96
0.00
1,598.96
1,598.96
47,054.75
0.00
1,271.75
1,271.75
48,470.43
0.00
1,500.43
1,500.43
56,791.51
0.00
1,813.51
1,813.51
43,246.83
0.00
1,168.83
1,168.83
87,486.24
0.00
300.00
2,886.24
549,777.64
889.30 15,277.40
17,863.64
Taxable
Amount x %
= Tax
15,277.40 x 6.20% = $947.20
17,863.64 x 1.45% = $259.02
$1,206.22
889.30 x 5.40% =
$48.02
889.30 x 0.80% =
$7.11
9 - 10
Journalize Payroll Tax Expense Entry
• Payroll taxes are an expense of doing
business
• Debit Payroll Tax Expense
• Credit associated payable account
General Journal
Date
2005
Oct.
Description
7 Payroll Tax Expense
FICA Tax Payable
State Unemployment Tax Payable
Federal Unemployment Tax Payable
To record employer's share of FICA tax and
employer's state and federal unemployment taxes.
Copyright © Houghton Mifflin Company. All rights reserved.
Page 9
Post.
Ref.
Debit
Credit
1,261.35
1,206.22
48.02
7.11
9 - 11
T-Accounts: Beginning Balance
Payroll Tax Expense
DR
CR
+
-
FICA Tax Payable
DR
CR
-
+
1,206.24
State Unemployment Tax Payable
DR
CR
-
Balance from
employees’
deductions
Copyright © Houghton Mifflin Company. All rights reserved.
+
Federal Unemployment Tax Payable
DR
CR
-
+
9 - 12
T-Accounts: Employer’s FICA
Payroll Tax Expense
DR
CR
+
-
FICA Tax Payable
DR
CR
-
1,206.22
+
1,206.24
1,206.22
State Unemployment Tax Payable
DR
CR
-
+
Federal Unemployment Tax Payable
DR
CR
-
Copyright © Houghton Mifflin Company. All rights reserved.
+
9 - 13
T-Accounts: Employer’s SUTA
Payroll Tax Expense
DR
CR
+
-
FICA Tax Payable
DR
CR
-
1,206.22
48.02
+
1,206.24
1,206.22
State Unemployment Tax Payable
DR
CR
-
+
48.02
Federal Unemployment Tax Payable
DR
CR
-
Copyright © Houghton Mifflin Company. All rights reserved.
+
9 - 14
T-Accounts: Employer’s FUTA
Payroll Tax Expense
DR
CR
+
-
FICA Tax Payable
DR
CR
-
1,206.22
48.02
7.11
+
1,206.24
1,206.22
State Unemployment Tax Payable
DR
CR
-
+
48.02
Federal Unemployment Tax Payable
DR
CR
-
+
7.11
Copyright © Houghton Mifflin Company. All rights reserved.
9 - 15
T-Accounts: Total Payroll Tax Expense
Payroll Tax Expense
DR
CR
+
-
FICA Tax Payable
DR
CR
-
1,206.22
48.02
7.11
1,261.35
+
1,206.24
1,206.22
State Unemployment Tax Payable
DR
CR
-
+
48.02
Total Payroll Tax
Expense, journalized
and posted
Federal Unemployment Tax Payable
DR
CR
-
+
7.11
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9 - 16
To Summarize
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9 - 17
1. Record Current Period Payroll in
Payroll Register
Name
Asino, Matte E.
Boritsky, Olga
Dray, Greg G.
Foulkes, Bob L.
Groyer, Milli K.
Kramer, Ada A.
Minkowitz, John L.
Orleons, Janet C.
Pinkovich, Mark S.
Romero, Sheila J.
Tivoli, Jake T.
Wilson, Sharlet D.
Totals
Total
Hours
46
45
49
40
40
40
55
40
44
45
40
52
Beginning
Cumulative
Earnings
32,890.00
6,192.00
6,846.00
38,637.00
68,000.00
68,100.00
36,840.00
45,783.00
46,970.00
54,978.00
42,078.00
84,600.00
531,914.00
Earnings
Regular
913.60
619.20
684.60
1,073.25
1,888.89
1,891.67
1,023.33
1,271.75
1,304.72
1,527.17
1,168.83
1,990.56
15,357.57
Overtime
205.56
116.10
231.05
0.00
0.00
0.00
575.63
0.00
195.71
286.34
0.00
895.68
2,506.07
Total
1,119.16
735.30
915.65
1,073.25
1,888.89
1,891.67
1,598.96
1,271.75
1,500.43
1,813.51
1,168.83
2,886.24
17,863.64
Ending
Taxable Earnings
Cumulative
Social
Earnings
Unemployment Security
Medicare
34,009.16
0.00
1,119.16
1,119.16
6,927.30
735.30
735.30
735.30
7,761.65
154.00
915.65
915.65
39,710.25
0.00
1,073.25
1,073.25
69,888.89
0.00
1,888.89
1,888.89
69,991.67
0.00
1,891.67
1,891.67
38,438.96
0.00
1,598.96
1,598.96
47,054.75
0.00
1,271.75
1,271.75
48,470.43
0.00
1,500.43
1,500.43
56,791.51
0.00
1,813.51
1,813.51
43,246.83
0.00
1,168.83
1,168.83
87,486.24
0.00
300.00
2,886.24
549,777.64
889.30 15,277.40
17,863.64
Deductions
Federal
Income Tax
150.00
80.00
107.00
123.00
394.00
395.00
312.00
193.00
284.00
372.00
164.00
665.00
3,239.00
State
Income Tax
30.00
16.00
21.40
24.60
78.80
79.00
62.40
38.60
56.80
74.40
32.80
133.00
647.80
Social
Security Tax
69.39
45.59
56.77
66.54
117.11
117.28
99.14
78.85
93.03
112.44
72.47
18.60
947.21
Medicare Tax
16.23
10.66
13.28
15.56
27.39
27.43
23.18
18.44
21.76
26.30
16.95
41.85
259.03
Copyright © Houghton Mifflin Company. All rights reserved.
Medical
Insurance
11.19
11.03
13.73
16.10
28.33
28.38
23.98
19.08
22.51
27.20
17.53
41.44
260.50
Other
UW
UW
12.00
15.00
UW
UW
UW
10.00
12.00
20.00
AR
UW
UW
50.00
25.00
30.00
174.00
Total
Deductions
276.81
175.28
227.18
245.80
645.63
657.09
532.70
367.97
478.10
662.34
328.75
929.89
5,527.54
Payments
Net
Ck.
Amount
No.
842.35
931
560.02
932
688.47
933
827.45
934
1,243.26
935
1,234.58
936
1,066.26
937
903.78
938
1,022.33
939
1,151.17
940
840.08
941
1,956.35
942
12,336.10
9 - 18
2. Based on Payroll Register, Make Journal Entry for
Employee Salary/Wages Expense
General Journal
Date
2005
Oct.
Description
7 Sales Wages Expense
Office Wages Expense
Employees' Federal Income Tax Payable
FICA Tax Payable
Employees' State Income Tax Payable
Employees' Medical Insurance Payable
Employees' United Way Payable
Accounts Receivable
Wages Payable
Page 9
Post.
Ref.
Debit
Credit
13,626.97
4,236.67
3,239.00
1,206.24
647.80
260.50
124.00
50.00
12,336.10
Payroll Register, page 68, for week ended October 7.
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9 - 19
3. From Taxable Earnings Columns of Payroll Register,
Calculate and Journalize Payroll Tax Expense
Taxable Earnings
Social
Unemployment
Security
0.00
1,119.16
735.30
735.30
154.00
915.65
0.00
1,073.25
0.00
1,888.89
0.00
1,891.67
0.00
1,598.96
0.00
1,271.75
0.00
1,500.43
0.00
1,813.51
0.00
1,168.83
0.00
300.00
889.30
15,277.40
Medicare
1,119.16
735.30
915.65
1,073.25
1,888.89
1,891.67
1,598.96
1,271.75
1,500.43
1,813.51
1,168.83
2,886.24
17,863.64
Payroll
Taxes
FICA Tax (Employer’s Share)
Social Security Tax
Medicare Tax
FICA Tax (Employer’s Share)
State Unemployment Tax
(Rates Vary)
Federal Unemployment Tax
(Rates Vary)
Taxable
Amount x %
= Tax
15,277.40 x 6.20% = $947.20
17,863.64 x 1.45% = $259.02
$1,206.22
889.30 x 5.40% =
$48.02
889.30 x 0.80% =
$7.11
General Journal
Date
2005
Oct.
Description
7 Payroll Tax Expense
FICA Tax Payable
State Unemployment Tax Payable
Federal Unemployment Tax Payable
To record employer's share of FICA tax and
employer's state and federal unemployment taxes.
Copyright © Houghton Mifflin Company. All rights reserved.
Page 9
Post.
Ref.
Debit
Credit
1,261.35
1,206.22
48.02
7.11
9 - 20
4. Journalize Cash Payments to Employees
General Journal
Date
2005
Oct.
Description
8 Wages Payable
Cash—Payroll Bank Account
Paid wages for week ended October 7.
Copyright © Houghton Mifflin Company. All rights reserved.
Page 11
Post.
Ref.
Debit
Credit
12,336.10
12,336.10
9 - 21
Performance Objective 2
Journalize the entry for the deposit of
employees’ federal income taxes
withheld and FICA taxes (both
employees’ withheld and employer’s
matching share) and prepare the
deposit coupon
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9 - 22
Federal Tax Deposits
• Include combined total of:
– Employees’ federal income taxes withheld
– Employees’ FICA taxes withheld
– Employer’s share of FICA taxes
• Made to authorized commercial or
Federal Reserve banks and forwarded
to U.S. Treasury
• Timing depends on amounts owed (the
more you owe, the more often you pay)
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9 - 23
Prepare the Deposit Coupon
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9 - 24
Journal Entry for Payments of FICA and
Federal Income Tax Withholdings
• Reduces payables
(liabilities)
• Reduces Cash
• Leaves payable accounts
with zero balances after
posting
FICA Tax Payable
DR
-
CR
+
4,824.96
4,824.96
0.00
Employees' Federal Income Tax Payable
DR
-
CR
+
6,478.00
6,478.00
0.00
General Journal
Date
Description
2005
Nov
15 Employees' Federal Income Tax Payable
FICA Tax Payable
Cash
Issued Ck. No. 4693 for federal tax deposit, Bangor Bank.
Copyright © Houghton Mifflin Company. All rights reserved.
Page 3
Post.
Ref.
Debit
Credit
6,478.00
4,824.96
11,302.96
9 - 25
Performance Objective 3
Journalize the entries for the payment of
employer’s state and federal
unemployment taxes
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9 - 26
Payments of State Unemployment Tax
(SUTA)
• Usually paid quarterly
• Due by the end of the month
following the end of the quarter
(same as Form 941)
• After posting, the payable
account has a zero balance
• Journal entry looks like this:
State Unemployment Tax Payable
DR
CR
+
3,263.54
3,263.54
0.00
General Journal
Date
Description
2005
April
30 State Unemployment Tax Payable
Cash
Issued Ck. No. 4311 for payment of state unemployment
tax.
Copyright © Houghton Mifflin Company. All rights reserved.
Page 17
Post.
Ref.
Debit
Credit
3,263.54
3,263.54
9 - 27
Payments of Federal Unemployment Tax
(FUTA)
• Calculated quarterly (due dates
same as form 941)
– If liability > $100, funds are
submitted with deposit card
• After posting, the payable
account has a zero balance
• Journal entry looks like this:
Federal Unemployment Tax Payable
DR
CR
+
483.49
483.49
0.00
General Journal
Date
Description
2005
April
30 Federal Unemployment Tax Payable
Cash
Issued Ck. No. 4312 for deposit offederal unemployment
tax.
Copyright © Houghton Mifflin Company. All rights reserved.
Page 17
Post.
Ref.
Debit
Credit
483.49
483.49
9 - 28
Performance Objective 4
Journalize the entry for the deposit of
employees’ state income taxes withheld
Copyright © Houghton Mifflin Company. All rights reserved.
9 - 29
Deposits of Employees’ State Income Tax
Withholding
• Deposited quarterly (due
dates same as SUTA)
• After posting, the payable
account has a zero balance
• Journal entry looks like this:
State Income Tax Payable
DR
CR
+
1,526.08
1,526.08
0.00
General Journal
Date
Description
2005
April
30 State Income Tax Payable
Cash
Issued Ck. No. 4313 for state income tax deposit.
Copyright © Houghton Mifflin Company. All rights reserved.
Page 17
Post.
Ref.
Debit
Credit
1,526.08
1,526.08
9 - 30
Performance Objective 5
Complete Employer’s Quarterly Federal
Tax Return, Form 941
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9 - 31
Form 941 (Employer’s Quarterly Federal
Tax Return)
• A quarterly report showing the tax
liability for withholdings of employees’
federal income tax and FICA taxes and
the employer’s share of FICA taxes;
total tax deposits made in the quarter
are also listed on Form 941
• Due April 30, July 31, October 31,
January 31
• See textbook for example
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9 - 32
Quarters
• Three consecutive months
– Also referred to as calendar quarters
•
•
•
•
Jan-Mar (1st Quarter)
Apr-Jun (2nd Quarter)
Jul-Sep (3rd Quarter)
Oct-Dec (4th Quarter)
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9 - 33
Performance Objective 6
Prepare W-2 and W-3 forms and Form
940
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9 - 34
Form W-2 (Wage and Tax Statement)
• Form containing information about employee earnings and tax
deductions for the year
• After last day of calendar year, employer must complete and
furnish employee with at least two copies (before January 31)
• One copy to the Social Security Administration
• One copy to state (if appropriate)
• Two or more copies to employee for:
– Employee’s records
– Employee to send to IRS
– Employee to send to state and local tax agencies if those
taxes withheld
• One copy for employer’s records
Copyright © Houghton Mifflin Company. All rights reserved.
9 - 35
Copyright © Houghton Mifflin Company. All rights reserved.
9 - 36
Form W-3 (Transmittal of Wage and Tax
Statements)
• Annual report (due Feb. 28) sent to
Social Security Administration listing:
– Total wages and tips
– Total federal income taxes withheld
– Total Social Security and Medicare taxable
wages and taxes withheld
• Must attach Copy A of employees’ W-2
forms
• Total amounts must match grand total of
W-2 and four quarterly 941 forms
Copyright © Houghton Mifflin Company. All rights reserved.
9 - 37
Copyright © Houghton Mifflin Company. All rights reserved.
9 - 38
Form 940 (Employer’s Annual Federal
Unemployment Tax Return)
• Due Jan. 31, or Feb. 10 if payments
made in full
• Lists:
– Total wages paid to employees
– Total wages subject to federal
unemployment tax
– Total federal unemployment tax
– Other information
Copyright © Houghton Mifflin Company. All rights reserved.
9 - 39
Copyright © Houghton Mifflin Company. All rights reserved.
9 - 40
Performance Objective 7
Calculate the premium for workers’
compensation insurance, and prepare
the entry for payment in advance
Copyright © Houghton Mifflin Company. All rights reserved.
9 - 41
Workers’ Compensation Insurance
• Provides benefits for employees injured or
killed on the job
• Rates vary according to the degree of risk
inherent in the job
• Plans may be sponsored by states or by
private firms
• Employer pays premium in advance, based
on estimated payroll for the year
• Rates are adjusted after exact payroll is
known
Copyright © Houghton Mifflin Company. All rights reserved.
9 - 42
Calculate the Premium in Advance
Copyright © Houghton Mifflin Company. All rights reserved.
9 - 43
Prepare the Entry for Payment in Advance
Copyright © Houghton Mifflin Company. All rights reserved.
9 - 44
Calculate Exact Premium at End of Year
Copyright © Houghton Mifflin Company. All rights reserved.
9 - 45
Performance Objective 8a
Determine the amount of the end-of-theyear adjustment for worker’s
compensation insurance, and record the
adjustment
Copyright © Houghton Mifflin Company. All rights reserved.
9 - 46
Calculate Unpaid Premium and Make
Adjusting Entry
$3,653.00 Total exact premium
$3,595.50 Less total estimated premium paid
$57.50 Additional premium owed
Copyright © Houghton Mifflin Company. All rights reserved.
9 - 47
Performance Objective 8b
Determine the amount of the end-of-theyear adjustment for accrued salaries
and wages, and record the adjustment
Copyright © Houghton Mifflin Company. All rights reserved.
9 - 48
Year-end Adjustments for Accrued Salaries
and Wages
• Are there adjusting entries for wages
expense and wages payable?
– Yes, salaries and wages accrue between
the last payday and the end of the year
• Are there adjusting entries for FICA,
federal income tax withholdings, or
payroll taxes?
– No
– These taxes are not legal obligations until
employees are paid
Copyright © Houghton Mifflin Company. All rights reserved.
9 - 49
Demonstration Problem
Payroll Problem
Payroll Register for Week Ended Oct. 14, 2005—page 72
Names
Smith, J. C.
Pham, H. L.
Ho, Dennis
Girvin, M. A.
Chin, Sue
Chueng, Vicky
Beg. Cum. Earn. Week's Earnings
6,750.00
550.00
5,255.00
650.00
43,690.00
700.00
56,900.00
680.00
84,500.00
1,430.00
86,000.00
2,050.00
Copyright © Houghton Mifflin Company. All rights reserved.
Unemployment
UE Max
$7,000.00
Fed Rate
0.008
State Rate
0.054
FICA
SS Max
$84,900.00
SS Rate
6.20%
0
0
FICA
Medicare Max
M Rate
1.45%
0
0
9 - 50
Look to Beginning Earnings to Determine If
There Are Taxable Earnings
Name
Smith, J. C.
Pham, H. L.
Ho, Dennis
Girvin, M. A.
Chin, Sue
Chueng, Vicky
Totals
Beginning
Cumulative
Earnings
6,750.00
5,255.00
43,690.00
56,900.00
84,500.00
86,000.00
283,095.00
Payroll Register for Week Ended Oct. 14, 2005—page 72
Ending
Taxable Earnings
Cumulative
Social
Total
Earnings
Unemployment
Security
550.00
650.00
700.00
680.00
1,430.00
2,050.00
6,060.00
0.00
0.00
0.00
Copyright © Houghton Mifflin Company. All rights reserved.
Medicare
0.00
9 - 51
Calculate Ending Cumulative Earnings
Name
Smith, J. C.
Pham, H. L.
Ho, Dennis
Girvin, M. A.
Chin, Sue
Chueng, Vicky
Totals
Beginning
Cumulative
Earnings
6,750.00
5,255.00
43,690.00
56,900.00
84,500.00
86,000.00
283,095.00
Payroll Register for Week Ended Oct. 14, 2005—page 72
Ending
Taxable Earnings
Cumulative
Social
Total
Earnings
Unemployment
Security
550.00
7,300.00
650.00
5,905.00
700.00
44,390.00
680.00
57,580.00
1,430.00
85,930.00
2,050.00
88,050.00
6,060.00
289,155.00
0.00
0.00
Copyright © Houghton Mifflin Company. All rights reserved.
Medicare
0.00
9 - 52
Calculate Taxable Earnings
Name
Smith, J. C.
Pham, H. L.
Ho, Dennis
Girvin, M. A.
Chin, Sue
Chueng, Vicky
Totals
Beginning
Cumulative
Earnings
6,750.00
5,255.00
43,690.00
56,900.00
84,500.00
86,000.00
283,095.00
Payroll Register for Week Ended Oct. 14, 2005—page 72
Ending
Taxable Earnings
Cumulative
Social
Total
Earnings
Unemployment
Security
550.00
7,300.00
250.00
550.00
650.00
5,905.00
650.00
650.00
700.00
44,390.00
0.00
700.00
680.00
57,580.00
0.00
680.00
1,430.00
85,930.00
0.00
400.00
2,050.00
88,050.00
0.00
0.00
6,060.00
289,155.00
900.00
2,980.00
Copyright © Houghton Mifflin Company. All rights reserved.
Medicare
550.00
650.00
700.00
680.00
1,430.00
2,050.00
6,060.00
9 - 53
Calculate Deductions
Name
Smith, J. C.
Pham, H. L.
Ho, Dennis
Girvin, M. A.
Chin, Sue
Chueng, Vicky
Totals
Federal
Income Tax
46.00
45.00
85.00
55.00
238.00
64.00
533.00
Beginning
Cumulative
Earnings
6,750.00
5,255.00
43,690.00
56,900.00
84,500.00
86,000.00
283,095.00
State
Income Tax
5.52
5.40
10.20
6.60
28.56
7.68
63.96
Payroll Register for Week Ended Oct. 14, 2005—page 72
Ending
Taxable Earnings
Cumulative
Social
Total
Earnings
Unemployment
Security
550.00
7,300.00
250.00
550.00
650.00
5,905.00
650.00
650.00
700.00
44,390.00
0.00
700.00
680.00
57,580.00
0.00
680.00
1,430.00
85,930.00
0.00
400.00
2,050.00
88,050.00
0.00
0.00
6,060.00
289,155.00
900.00
2,980.00
Payroll Register for Week Ended Oct. 14, 2005—page 72
Deductions
Payments
Social
Total
Net
Ck.
Security Tax
Medicare Tax
Deductions
Amount
No.
34.10
7.98
93.60
40.30
9.43
100.13
43.40
10.15
148.75
42.16
9.86
113.62
24.80
20.74
312.10
0.00
29.73
101.41
184.76
87.89
869.61
0.00
Copyright © Houghton Mifflin Company. All rights reserved.
Medicare
550.00
650.00
700.00
680.00
1,430.00
2,050.00
6,060.00
Salary Expense
Salary Expense
0.00
9 - 54
Calculate Payments and Expense
Name
Smith, J. C.
Pham, H. L.
Ho, Dennis
Girvin, M. A.
Chin, Sue
Chueng, Vicky
Totals
Federal
Income Tax
46.00
45.00
85.00
55.00
238.00
64.00
533.00
Beginning
Cumulative
Earnings
6,750.00
5,255.00
43,690.00
56,900.00
84,500.00
86,000.00
283,095.00
State
Income Tax
5.52
5.40
10.20
6.60
28.56
7.68
63.96
Payroll Register for Week Ended Oct. 14, 2005—page 72
Ending
Taxable Earnings
Cumulative
Social
Total
Earnings
Unemployment
Security
550.00
7,300.00
250.00
550.00
650.00
5,905.00
650.00
650.00
700.00
44,390.00
0.00
700.00
680.00
57,580.00
0.00
680.00
1,430.00
85,930.00
0.00
400.00
2,050.00
88,050.00
0.00
0.00
6,060.00
289,155.00
900.00
2,980.00
Payroll Register for Week Ended Oct. 14, 2005—page 72
Deductions
Payments
Social
Total
Net
Ck.
Security Tax
Medicare Tax
Deductions
Amount
No.
34.10
7.98
93.60
456.40
714
40.30
9.43
100.13
549.87
715
43.40
10.15
148.75
551.25
716
42.16
9.86
113.62
566.38
717
24.80
20.74
312.10
1,117.90
718
0.00
29.73
101.41
1,948.59
719
184.76
87.89
869.61
5,190.39
Copyright © Houghton Mifflin Company. All rights reserved.
Medicare
550.00
650.00
700.00
680.00
1,430.00
2,050.00
6,060.00
Salary Expense
Salary Expense
550.00
650.00
700.00
680.00
1,430.00
2,050.00
6,060.00
9 - 55
Make Journal Entry from Register
Name
Smith, J. C.
Pham, H. L.
Ho, Dennis
Girvin, M. A.
Chin, Sue
Chueng, Vicky
Totals
Federal
Income Tax
46.00
45.00
85.00
55.00
238.00
64.00
533.00
Beginning
Cumulative
Earnings
6,750.00
5,255.00
43,690.00
56,900.00
84,500.00
86,000.00
283,095.00
State
Income Tax
5.52
5.40
10.20
6.60
28.56
7.68
63.96
Payroll Register for Week Ended Oct. 14, 2005—page 72
Ending
Taxable Earnings
Cumulative
Social
Total
Earnings
Unemployment
Security
550.00
7,300.00
250.00
550.00
650.00
5,905.00
650.00
650.00
700.00
44,390.00
0.00
700.00
680.00
57,580.00
0.00
680.00
1,430.00
85,930.00
0.00
400.00
2,050.00
88,050.00
0.00
0.00
6,060.00
289,155.00
900.00
2,980.00
Payroll Register for Week Ended Oct. 14, 2005—page 72
Deductions
Payments
Social
Total
Net
Ck.
Security Tax
Medicare Tax
Deductions
Amount
No.
34.10
7.98
93.60
456.40
714
40.30
9.43
100.13
549.87
715
43.40
10.15
148.75
551.25
716
42.16
9.86
113.62
566.38
717
24.80
20.74
312.10
1,117.90
718
0.00
29.73
101.41
1,948.59
719
184.76
87.89
869.61
5,190.39
Payables
Copyright © Houghton Mifflin Company. All rights reserved.
Medicare
550.00
650.00
700.00
680.00
1,430.00
2,050.00
6,060.00
Salary Expense
Salary Expense
550.00
650.00
700.00
680.00
1,430.00
2,050.00
6,060.00
Expense
9 - 56
Record Salary Expense
General Journal
Date Description
2005
Oct. 14 Salary Expense
Copyright © Houghton Mifflin Company. All rights reserved.
Page 17
Post.
Ref. Debit
Credit
6,060.00
9 - 57
Record Payables to Make DR = CR
General Journal
Date Description
2005
Oct. 14 Salary Expense
Employees' Federal Income Tax Payable
Employees' State Income Tax Payable
FICA Tax Payable
Salaries Payable
Payroll register, page 72, for week ended October 14.
Copyright © Houghton Mifflin Company. All rights reserved.
Page 17
Post.
Ref. Debit
Credit
6,060.00
533.00
63.96
272.65
5,190.39
9 - 58
Calculate Payroll Taxes
Payroll
Taxes
FICA Tax (Employer’s Share)
Social Security Tax
Medicare Tax
FICA Tax (Employer’s Share)
State Unemployment Tax
(Rates Vary)
Federal Unemployment Tax
(Rates Vary)
Taxable
Amount x
%
= Tax
2,980.00 x 6.20% = $184.76
6,060.00 x 1.45% = $87.87
Copyright © Houghton Mifflin Company. All rights reserved.
$272.63
900.00 x 5.40% =
$48.60
900.00 x 0.80% =
$7.20
9 - 59
Record Payroll Expense
General Journal
Date Description
2005
Oct. 14 Salary Expense
Employees' Federal Income Tax Payable
Employees' State Income Tax Payable
FICA Tax Payable
Salaries Payable
Payroll register, page 72, for week ended October 14.
14 Payroll Tax Expense
FICA Tax Payable
SUTA Payable
FUTA Payable
To record employer's share of FICA tax and employer's state and
federal unemployment taxes.
Copyright © Houghton Mifflin Company. All rights reserved.
Page 17
Post.
Ref. Debit
Credit
6,060.00
533.00
63.96
272.65
5,190.39
328.43
272.63
48.60
7.20
9 - 60
Journalize Cash Payments to Employees
General Journal
Date Description
2005
Oct. 14 Salary Expense
Employees' Federal Income Tax Payable
Employees' State Income Tax Payable
FICA Tax Payable
Salaries Payable
Payroll register, page 72, for week ended October 14.
14 Payroll Tax Expense
FICA Tax Payable
SUTA Payable
FUTA Payable
To record employer's share of FICA tax and employer's state and
federal unemployment taxes.
14 Salaries Payable
Cash—Payroll Bank Account
Paid wages for week ended Oct. 14, 2005.
Copyright © Houghton Mifflin Company. All rights reserved.
Page 17
Post.
Ref. Debit
Credit
6,060.00
533.00
63.96
272.65
5,190.39
328.43
272.63
48.60
7.20
5,190.39
5,190.39
9 - 61