Accounting Chapter 7
Gross Pay
the total amount of an employee's earnings before deductions are taken out
Social Security tax rate
6.2% for every $106,800
Wage-bracket tax tables
A chart providing the amounts to be deducted for income taxes based on amount of earnings, marital status, and number of allowances claimed.
Payroll register
A manual or computerized schedule prepared for each payroll period listing the earnings, deductions, and net pay for each employee.
Payroll bank account
A special checking account used to pay a company's employees
Employee Individual Earnings Record
A supplementary record for each employee showing personal payroll data and yearly cumulative earnings, deductions, and net pay
withholding allowance
An allowance claimed by an employee (on a W-4), which employers use to calculate the amount of income tax withheld from an employee's paycheck.
The Social Security Act of 1935 was originally enacted to provide
Benefits for retired workers
When is that payroll register update?
Each payday
Pre-tax deductions
Employee deductions that are not subject to income tax. The deductions include medical insurance premiums, medical and dependent care expenses under a flexible spending plan, and 401(k) contributions.
The 941 employer's tax payment to the IRS consists of
Employee's FIC Withheld Employer's matching FICA Employee's federal income tax withheld
The Medicare tax is 6.2% of unlimited gross earnings
False. 1.45% all earnings
Medicare taxes
Federal government taxes levied on employees and employers; proceeds are used for medical insurance for eligible people aged 65 and over
Social Security taxes
Federal government taxes levied on employees and employers; proceeds are used for old-age pensions and disability benefits.
Net Pay
Gross pay minus deductions. Also called take-home pay.
A plumber who sets his own work schedule is an example of?
Independent Contractor
Workers' Compensation Laws
Laws that protect employees and dependents against losses due to death or injury incurred on the job.
The Fair Labor Standards Act of 1938 provides for
Minimum standard wages and overtime Provisions for child labor and equal pay for equal work Exemptions for specified employees
Piece rate
Paid at the rate of so much per unit production
FUTA
Paid by the employer only and is based on the total earnings during the calendar year
A company with a large number of employee's would have what type of bank?
Payroll bank account
The source of information for the employee's individual earnings record is
Payroll register
What are the two parts of FICA taxes?
Social Security and Medicare
FICA taxes
Social Security taxes plus Medicare taxes, paid by both employee and employer under the provisions of the Fderal Insurance Contributions Act. The proceeds are used to pay old age and disability pensions and to fund the Medicare program.
Independent Contractor
Someone who is engaged for a definite job or service and who may choose his or her own means of doing the work. This person is not an employee of the firm for which the service is provided.
SUTA
Tax is paid by the employer and is filed on a quarterly basis (3 months) 5.4% for the first $7000
Fair Labor Standards Act
The act of 1938 that provides for minimum standards for wages and overtime, including provisions related to child labor and equal pay for equal work
Taxable Earnings
The amount of an employee's earnings subject to a tax.
Employee's may be paid hourly or salary based on?
Type of work performed Period of time covered
What is NOT used to calculate the federal income tax to be withheld by employers
W-2
The payroll register contains all of the following except
W-4
A law that protects employees and dependents against losses due to death or injury on the job is?
Worker Compensation Law
Types of compensation that an employee might receive include:
a bonus, meals, profit sharing, commission,
calender year
a twelve month period beginning Jan 1st and concluding on Dec 31st
Social Security Act of 1935
an act that provides for worker retirement funding through deductions from workers' wages and matching amounts from their employers
exemption
an amount of an employee's annual earnings not subject to income tax for the tax payer, tax payer's spouse and the dependents( usually children)
The total amount of employee compensation before deductions are taken out is referred as
gross pay
Net pay is equal to
gross pay minus all deductions
employee
one who works for compensation under the direction and control of the employer
To examine in detail the weekly payroll figures of all employees one would look at
payroll register
Current Tax Payment Act
(Income Tax Withholding) An act that requires employers to withhold and pay employee funds to the U.S. Treasury.
Sonia works 38 hours in a week. How many hours will Sonia get paid for?
0!!!!
A law that regulates overtime earnings is called?
Fair Labor Standards Act
A company with a small number of employees would probably use what type of account to issue a check for employee's?
Regular bank account
Employee's Withholding Allowance Certificate (Form W-4)
a form that specifies the number of allowances claimed by each employee and gives the employer the authority to withhold money for an employee's federal income tax
