employees gross pay no limitation taking into account the employees tax

Employees gross pay no limitation taking into account

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employee’s gross pay (no limitation) taking into account the employee’s tax exemptions (withholding allowances), marital status, and payroll period.
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2. FICA (Social Security) Tax: based on each employee’s gross pay. A rate is applied against gross pay each year until a ceiling is reached. 3. Other Deductions: states taxes and assessments, union dues, charitable contributions, saving bonds, insurance premiums ii. Entry to Record Payroll: Salaries and Wages Expense (Gross Pay) Federal Income Tax Payable FICA Tax Payable Cash (Net Pay) b. Recording the Employer’s Payroll Tax Expense: i. Employer’s Payroll Taxes: 1. FICA Tax: matches the employee’s total deduction 2. Federal Unemployment Tax: based on each employee’s gross pay. A rate is applied against each employee’s gross pay each year until a ceiling is reached. However, if the employer contributes to a state unemployment fund, then he receives a credit against the federal unemployment tax rate 3. State Unemployment Tax: based on each employee’s gross pay. A rate (merit rating) is applied against each employee’s gross pay until a ceiling is reached. The credit against the
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Federal Unemployment Tax is constant and does not depend upon what the employer’s merit rating is. ii. Entry To Record Employer’s Payroll Tax Expense: Payroll Tax Expense FICA Tax Payable Federal Unemployment Tax Payable State Unemployment Tax Payable c. Payroll Records: i. Employee’s Individual Earnings Record: a payroll record maintained for each employee which shows the employee’s hours worked, gross pay, deductions, net pay, and cumulative gross pay earned year to date, for each payroll period. ii. Payroll Register: a record of payroll details including each employee’s name, hours worked, gross pay, deductions, and net pay. It can serve as the backup for the payroll entry in the general or as a special journal from which payroll amounts can be posted. It is prepared for each payroll period.
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