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CH11 Lesson pppayroll (1).ppt

CH11 Lesson pppayroll (1).ppt - Payroll Common pay periods...

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1. Describe payroll accounting 2. Calculate Gross and Net Pay Statutory (required by the government) Deductions: Income tax Canada Pension Plan (CPP) Employment Insurance (EI) Employer sends deductions to CRA on behalf of the employee Gross pay: The amount earned by the employee before deductions. Wages: Hourly Rate x Number of hours worked Overtime: Based on hourly rate x 1.5 (examples) x number of hours over regular hours. Example: Regular hours = 40. Rate $40. per hour. Employee worked 45 hours. Overtime paid at 1.5 times regular rate. Overtime would be: $40. x 1.5 x 5 = $ 300 Therefore, total Gross Pay would equal: Regular earnings $15 x 40 = $1,600. Overtime 300. Total Gross Pay $1,900. Less Deductions: Income Tax $320 CPP 90 EI 34 United Way 10 Union dues 25 Medical Benefits 30 Total deductions 509 . Net Pay $1,391 . Voluntary Deductions: Union dues, Charitable donations Safety or uniform allowances •Company pension and Medical or Dental coverage Net Pay: •= Gross pay – Total Deductions Total Deductions: = Statutory + Voluntary Deductions AP-1 to AP-3 Common pay periods: Weekly (52 pays per year) Bi-weekly (26 pays per year) Semi-monthly (24 pays per year) Monthly (12 pays per year) Terminology: Wages vs. Salary
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