12.3 - Intro to Business - Ch. 12.3

payroll records

These are the documentation used to process earnings payments and record each employee's pay history. Including detailed personal information for each employee.

personnel records

These include personal information, employment history, performance evaluations, compensation records, and other information needed by the company. Most information in personnel files is confidential. Because of this, businesses must carefully and securely maintain these records.

What things do PAYROLL records include?

- salary and wage rate info - vacation and sick days earned - tax filing status for the employee is included in order to calculate how much $$ to take out of their pay for federal, state, and local taxes. - health insurance payments - retirement plan contributions

net pay

Amount of income left after taxes and deductions have been taken out. This is how much $$ your paycheck is.

unemployment taxes

As required by the Federal Unemployment Tax Act (FUTA), many employers must contribute to this tax whose purpose is to compensate employees who lose their jobs through no fault of their own.

payroll taxes

Businesses are responsible for making required federal and state payments for each employee. These taxes consist of income taxes, Social Security, Medicare, and unemployment taxes.

benefits

Compensation in forms other than direct payment, such as insurance options, paid or unpaid vacation, sick leave and personal time off, retirement plans, and education assistance.

T or F - With DIRECT DEPOSIT, you receive a paper paycheck each pay period.

False - The employee does not receive a printed paycheck but is given a printed or e-mailed notification of the funds transfer - called an advice of deposit.

T or F - Payroll records need to be maintained for all full-time employees, but not for part-time employees.

False - Records must be kept for ALL employees.

earnings report (or pay stub)

It usually provides information for the current pay period as well as the cumulative amounts for the year. It is often attached to the paycheck each pay period.

payroll system

Maintains information on each employee in order to calculate the company's payroll and make the necessary payments to each employee, as well as any required payments to government.

direct deposit

The employer transfers net pay (amount of paycheck$$) electronically into the employee's bank account.

income taxes

The federal government, most states, and some local governments require employers to withhold this tax from their employees' pay. The amount withheld is based on the wages or salary paid and the number of employee dependents.

payroll

The financial record of employee compensation, deductions, and net pay.

Social Security & Medicare

These payments are often referred to as FICA (Federal Insurance Contributions Act). The government requires employers to withhold and deposit these contributions from employees' paychecks along with matching contributions by the employer. These are both benefits that you can collect money on AFTER you retire from working.

T or F - Businesses are responsible for making required federal and state payments for each employee.

True

T or F - Today, computerized personnel records systems make the payroll process much more efficient and accurate.

True - Technology is used to collect employee time and production records each work period. When paychecks need to be prepared, information on benefits and deductions is determined and each employee's pay is calculated. All payroll records are updated and paychecks are printed, or electronic deposits are transmitted to employees' bank accounts.

What are some additional forms of payment compensation for employees besides money 💵?

commissions, bonuses, and profit sharing

When do most businesses pay their employees?

weekly bi-weekly (which is 2x per month) or monthly