Mr. Belolan
 Determine
importance of payroll accounting
 Explain types of deductions from employees’
gross earnings
 Prepare a payroll register, employees record
 Identify tax reports that are prepared
regularly by the employer
 Question:
For those of you who receive a
paycheck for a job, what are some
deductions?


FICA, state, local
Is that the employer’s money?
1.
2.
3.
Payroll -- list of all employees and
payments due
Pay Period -- amount of time for which you
are paid
Payroll Clerk -- person who prepares
payroll
1.
2.
Gross Earnings -- total money earned
Net Earnings -- your pay after taxes;
-- “Take Home Pay”
 You
make $7.25 per
hour
 You worked 35 hours
this week
 How much is your
gross pay?
 $7.25
x 35 = $257.35
1.
2.
3.
4.
5.
Salary -- fixed amount yearly
-- unlimited hours worked
Hourly Wage -- pay per hour
Piece Rate -- paid per unit produced
Commission -- pay is % of sales
Overtime -- pay for hours beyond regular
work week (usually 40hr/wk)
 What
is the typical overtime pay
rate?
Time and one half (1 ½)
 EX: If you make $10/hr, your
overtime rate is $10 x 1.5 = $15/hr!
 Can you make more?
 Examples?

 Federal



Income Tax
Based mainly on annual income
Employer “holds” money for government aka:
holding agent
Depends on marital status, number of
exemptions and gross income
 FICA





Federal Insurance Contributions Act
Social Security Deduction is 6.20%
Medicare Deduction is 1.45%
Tax combines both Social Security and Medicare
deductions (total 7.65%)
This is a matching tax paid by you and your
employer!
 Local
Tax = 1.55% for residents of Central
Columbia School District (1.05% to school and
.50% to municipality)
 State Income Tax = Varies by State, PA is 3.7%
 What
is the difference between gross and net
pay?
 Describe three types of pay.
 What two taxes does FICA cover?
 Why is FICA considered a matching tax?