Content Presentation
Chapter 8 Paying, Recording, and Reporting Payroll and Payroll Taxes: The Conclusion of the Payroll Process © 2010 Prentice Hall Business Publishing, College Accounting: A Practical Approach, 11e by Slater Learning Objective 1 Recording payroll and payroll taxes LO-1 © 2010 Prentice Hall Business Publishing, College Accounting: A Practical Approach, 11e by Slater Record Salaries Expense Use Employee’s Payroll Register Salary/Wages Expense = gross salary of all employees Salaries/Wages Payable = net pay Amounts of taxes withheld = “payable” accounts LO-1 © 2010 Prentice Hall Business Publishing, College Accounting: A Practical Approach, 11e by Slater Record Salaries Expense GENERAL JOURNAL Date Description Page 3 PR Debit Sep 30 Wages & Salaries Expense FIT Payable SIT Payable FICA-OASDI Payable FICA-Medicare Payable Wages & Salaries Payable LO-3 © 2010 Prentice Hall Business Publishing, College Accounting: A Practical Approach, 11e by Slater Credit Learning Objective 2 Paying payroll and recording the paying of payroll Learning Objective 3 Calculating employer taxes for FICA OASDI, FICA Medicare, FUTA, SUTA, and workers’ compensation insurance LO-2, 3 © 2010 Prentice Hall Business Publishing, College Accounting: A Practical Approach, 11e by Slater Record Payment of Salaries LO-2 © 2010 Prentice Hall Business Publishing, College Accounting: A Practical Approach, 11e by Slater FICA, FUTA & SUTA Rates FICA- OASDI FICA- Medicare FUTA SUTA 6.2% 1.45% 0.8% 5.6% LO-3 © 2010 Prentice Hall Business Publishing, College Accounting: A Practical Approach, 11e by Slater EIN & SS-4 EIN - Employer Identification Number is a number assigned by the IRS to an employer. SS-4 - Form filled out by an employer to obtain an EIN. LO-2, 3 © 2010 Prentice Hall Business Publishing, College Accounting: A Practical Approach, 11e by Slater FIT and FICA Deposited in an authorized depository or in a Federal Reserve Bank If company owes < $2,500 in total taxes, deposit quarterly Monthly depositor – deposit taxes on 15th day of every month Semiweekly – deposit taxes once or twice each week LO-2, 3 © 2010 Prentice Hall Business Publishing, College Accounting: A Practical Approach, 11e by Slater FIT and FICA Form 8109 – Federal Tax Deposit Coupon – used when making deposits by check LO-2, 3 © 2010 Prentice Hall Business Publishing, College Accounting: A Practical Approach, 11e by Slater Record Payment of Form 941 Taxes LO-2, 3 © 2010 Prentice Hall Business Publishing, College Accounting: A Practical Approach, 11e by Slater Exercise 8-4 LO-2, 3 © 2010 Prentice Hall Business Publishing, College Accounting: A Practical Approach, 11e by Slater Form 941 Employer’s Quarterly Federal Tax Return Completed after the end of each calendar quarter Reports total FICA (OASDI and Medicare) taxes owed plus amount of FIT withheld from employee’s pay LO-2, 3 © 2010 Prentice Hall Business Publishing, College Accounting: A Practical Approach, 11e by Slater Form 941 (Partial) LO-2, 3 © 2010 Prentice Hall Business Publishing, College Accounting: A Practical Approach, 11e by Slater Exercise 8-2 LO-3 © 2010 Prentice Hall Business Publishing, College Accounting: A Practical Approach, 11e by Slater Record Payroll Tax Expense LO-3 © 2010 Prentice Hall Business Publishing, College Accounting: A Practical Approach, 11e by Slater Exercise 8-3 LO-3 © 2010 Prentice Hall Business Publishing, College Accounting: A Practical Approach, 11e by Slater Learning Objective 4 Paying FUTA, SUTA, and workers’ compensation insurance LO-4 © 2010 Prentice Hall Business Publishing, College Accounting: A Practical Approach, 11e by Slater Paying FUTA Tax If tax owed for calendar year < $500, employer pays to the IRS by end of January of the next year (30 DAYS) If amount owed > $500, employer pays quarterly due by the end of the month following the end of the calendar quarter (30 DAYS) LO-4 © 2010 Prentice Hall Business Publishing, College Accounting: A Practical Approach, 11e by Slater Record Payment of FUTA Tax LO-4 © 2010 Prentice Hall Business Publishing, College Accounting: A Practical Approach, 11e by Slater Federal Unemployment Tax Returns Form 940 ◦ Prepared at end of calendar year ◦ Reports the amount of unemployment tax due for the year LO-4 © 2010 Prentice Hall Business Publishing, College Accounting: A Practical Approach, 11e by Slater Form 940 (Partial) © 2010 Prentice Hall Business Publishing, College Accounting: A Practical Approach, 11e by Slater LO-4 Paying SUTA Tax Paid to state government Typically due by end of month following each calendar quarter LO-4 © 2010 Prentice Hall Business Publishing, College Accounting: A Practical Approach, 11e by Slater Record Payment of SUTA Tax LO-4 © 2010 Prentice Hall Business Publishing, College Accounting: A Practical Approach, 11e by Slater Record Payment of Workers’ Compensation Insurance LO-4 © 2010 Prentice Hall Business Publishing, College Accounting: A Practical Approach, 11e by Slater Exercise 8-8 part (a) LO-4 © 2010 Prentice Hall Business Publishing, College Accounting: A Practical Approach, 11e by Slater Exercise 8-8 parts (b & c) LO-4 © 2010 Prentice Hall Business Publishing, College Accounting: A Practical Approach, 11e by Slater Learning Objective 5 Preparing Forms W-2, W-3, and 940-EZ LO-5 © 2010 Prentice Hall Business Publishing, College Accounting: A Practical Approach, 11e by Slater W-2: Wage and Tax Statement Prepared by employer each calendar year Provides summary of gross earnings and deductions to each employee Copies: ◦ Employee ◦ IRS ◦ Any state where employees’ income taxes have been withheld ◦ Social Security Administration ◦ Company records LO-5 © 2010 Prentice Hall Business Publishing, College Accounting: A Practical Approach, 11e by Slater Sample W-2 © 2010 Prentice Hall Business Publishing, College Accounting: A Practical Approach, 11e by Slater LO-5 W-3: Transmittal of Income and Tax Statements Completed by employer to verify the number of W-2’s and amounts withheld Sent to a Social Security Administration data processing center along with copies of each employee’s W-2 LO-5 © 2010 Prentice Hall Business Publishing, College Accounting: A Practical Approach, 11e by Slater Sample W-3 LO-5 © 2010 Prentice Hall Business Publishing, College Accounting: A Practical Approach, 11e by Slater End of Chapter 8 © 2010 Prentice Hall Business Publishing, College Accounting: A Practical Approach, 11e by Slater
© Copyright 2024