Chapter 11 Handout

Chapter 11 Handout - HO#10 Ch 11 Payroll Liabilities Accounting for Payroll revolves around two journal entries 1 2 1 Recording employer wage

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
HO #10 Payroll Liabilities Ch. 11 Accounting for Payroll revolves around two journal entries: 1) Recording employer wage expense and employee withholdings. 2) Recording employer payroll tax expense. 1. Gross Wages = total compensation earned by employee during the period. Net Wages = Amount of cash actually received (or due) to employees. Gross Wages minus Net Wages = Payroll deductions a) FICA Taxes - Provides workers with retirement and medical benefits. FICA taxes are generally 7.65% of employee wages. 6.2% Social Security 1.45% Medicare b) Employee's Income Taxes - Employers are required to withhold employee income taxes. Federal taxes State taxes Local taxes c) Other Withholdings Union dues charitable contributions (e.g., United Way) Medical insurance premiums Parking fees Contributory pension plans 2. Employer Payroll Tax Expense a) FICA - Employer must match the FICA taxes paid by the employee. b)
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 04/29/2011 for the course ECON 101 taught by Professor Gottlieb during the Spring '08 term at Rutgers.

Page1 / 2

Chapter 11 Handout - HO#10 Ch 11 Payroll Liabilities Accounting for Payroll revolves around two journal entries 1 2 1 Recording employer wage

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online