When a company has only a few employees payroll

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Unformatted text preview: checking account is used, funds are transferred to this account each pay period. A check for the total net pay amount is written from the company’s regular checking account and deposited in the payroll checking account. Then individual payroll checks are issued to employees from the payroll account. The payroll register is the source of information for preparing the payroll checks. Along with a payroll check, each employee is given a written or printed explanation showing how the employee’s net pay is calculated. This explanation is provided on a stub attached to the payroll check. Figure 12–6 shows a typical payroll check and stub. Notice that for Emily Kardos, the amounts on the stub are the same as the amounts in the payroll register. After each payroll check has been written, the check number is recorded in the payroll register. 260 Roadrunner Delivery Service 155 Gateway Blvd. Sacramento, CA 94230 Pay to the Order of June 30 Date Emily Kardos 63-947 670 20 -$ 172.35 One hundred seventy-two and 35/100 Dollars O American National Bank Maria Sanchez SACRAMENTO, CALIFORNIA 067009471 3939 043 417 260 260 Employee Pay Statement Detach and retain this statement. Period Ending Earnings Deductions Social Regular Overtime Total Security Tax 6/30/20-- 243.00 243.00 15.07 Med. Tax Federal State Income Income Tax Tax 29.00 4.86 3.52 Hosp. Ins. 3.20 Net Pay Other Total 15.00 70.65 172.35 Figure 12–6 Completed Payroll Check and Stub 322 Chapter 12 Payroll Accounting 308-337_CH12_868829.indd 322 9/15/05 11:46:21 AM Employees can be paid by check or by direct deposit. The employer makes a direct deposit of the net pay electronically in the employee’s personal bank account. No payroll check is prepared. The employee does, however, receive a printed record of the payroll calculation. Direct deposits are made through electronic funds transfer. With this system the employer informs the employee’s bank of the amount to be deposited. The Employee’s Earnings Record What Is the Purpose of an Employee’s Earnings Record? In...
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