Chapter 12 True and False

Social security tax is paid by the employer only.

False

The first task in preparing a payroll is to determine the number of days worked by each employee.

False

Total earnings are sometimes referred to as net pay or net earnings.

False

When an employee's earnings exceed the tax base, no more Medicare tax is deducted.

False

Payroll taxes are based on employee total earnings.

True

Payroll taxes withheld represent a liability for an employer until payment is made.

True

The amount of income tax withheld from each employee's total earnings is determined from the number of withholding allowances and by the employee's marital status.

True

The information used to prepare payroll checks is taken from a payroll register.

True

When an employee's earnings exceed the tax base, no more social security tax is deducted.

True

A single person will have less income tax withheld than a married employee.

False

A business is required by law to withhold certain payroll taxes from employee salaries.

True

A separate checking account for payroll checks helps to protect and control payroll payments.

True

All deductions from employee wages are recorded in a payroll register.

True

Businesses must withhold federal income tax from employee total earnings.

True

Businesses use payroll records to inform employees of their annual earnings and to prepare payroll reports for the government.

True

Employee total earnings are calculated as regular hours X regular rate, plus overtime hours X overtime rate.

True