CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning

Thursday, May 3, 2012

Good morning Moment of silence/Pledge/Announcements

Bell RingerChapter 12: Preparing Payroll Records

Define the twelve terms from Chapter 12 in your notebooks

CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning

LESSON 12-1and LESSON 12-2

Preparing Payroll Time CardsCalculate Employee Total Earnings

Determining Payroll Tax Withholding Calculate Federal, Social Security,

and Medicare Tax

CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning

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LESSON 12-1

PAYING EMPLOYESS

Pay employees weekly, biweekly, semimonthly, monthly

Money paid hourly to employees referred to as wages

Fixed amount paid per period is referred to as Salary

CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning

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LESSON 12-1

ANALYZING A PAYROLL TIME CARD page 341

CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning

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LESSON 12-1

4. Add the Hours column.

CALCULATING EMPLOYEE HOURS WORKED page 342

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3. Add Hours Reg and Hours OT columns and enter the totals.

2. Calculate the number of overtime hours and enter the amounts.

1. Calculate the number of regular hours for each day and enter the amounts.

CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning

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LESSON 12-1

CALCULATING EMPLOYEE TOTAL EARNINGS page 343

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1. Enter the rate for regular time in the Rate column.

2. Calculate the regular earnings. Enter the amount.

3. Enter the rate for overtime.4. Calculate the overtime

earnings. Enter the amount.5. Add the Amount column to

calculate total earnings. Enter the amount of total earnings.

CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning

Worksheet

Calculate Employees Total EarningsEmployee # 1 Regular Earnings $ Overtime Earnings $ Total Earnings

CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning

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LESSON 12-1

TERMS REVIEW

salary pay period payroll total earnings

page 344

CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning

LESSON 12-2

Businesses are required by law to withhold payroll taxes.

Accurate and Detailed records must be maintained.

Payroll taxes are a liability for the employer until they are paid.

Determining Payroll Tax Withholding

CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning

LESSON 12-2

Federal Income Tax withheld must be paid periodically to the federal government

Employers in many states are also required to withhold state, city, and/or county income taxes from employees earnings.

Determining Payroll Tax Withholding

CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning

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LESSON 12-2

EMPLOYEE’S WITHHOLDING ALLOWANCE CERTIFICATE

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page 346

1. Write the employee’s name and address2. Write the employee’s social security number.3. Check the appropriate marital status block.4. Write the total number of withholding allowances claimed.5. The employee signs and dates the form.

CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning

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LESSON 12-2

EMPLOYEE’S INCOME TAX WITHHOLDING – MARRIED PERSONS page 348

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1. Select the appropriate table.2. Locate the employee’s total earnings.3. Intersection of wages and number of allowances column.

CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning

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LESSON 12-1

Other Federal Taxes

Social Security Tax Medicare TaxA federal tax paid for old-

age, survivors, and disability insurance

A federal tax for hospital insurance

Paid by both Employer and Employee

CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning

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LESSON 12-1

Other Federal Taxes

Medicare TaxSocial Security Tax

A federal tax paid for old-age, survivors, and disability insurance

A federal tax for hospital insurance

Employers are required to withhold and deposit the Employees part of the taxes and pay a matching amount.

CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning

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LESSON 12-1

SOCIAL SECURITY TAX

Social Security Tax is calculated on employee earnings up to a maximum paid in a calendar year.

The maximum amount on which a tax is paid is called a tax base

Social Security has a tax base,Medicare does not have a taxbase

CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning

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LESSON 12-1

SOCIAL SECURITY TAX

Calculate Social Security Tax

2012 Tax Rate

Total Earnings

Social Security

Rate

Social Security

Tax Deduction

CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning

17

LESSON 12-1

MEDICARE TAX

Calculate Medicare Tax

Total Earnings

Medicare TaxRate

MedicareTax

Deduction

CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning

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LESSON 12-2

TERMS REVIEW

payroll taxes withholding allowance social security tax Medicare tax tax base

page 350

CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning

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LESSON 12-1

ASSIGNMENT

WORKSHEET: Drill 12-D2

Extra Credit: APLIAAPPLICATION PROBLEM 12-

2(maximum 12 points)