Payroll Funds Distribution a. Explain how direct deposit of earnings works. b. How does

Calculating Gross Earnings Clearys Music Center has nine employees. The employees are paid weekly with overtime after 40 hours per week. The overtime rate is 1 times the regular rate of pay. Payroll information for the week ending June 12 follows: Employee Pay Rate Hours David Clune $6.95 3312 Richard Lang $7.80 38 Jane Longas $7.25 43 Betty Quinn $8.30 4414 John Sullivan $8.30 3912 Kelly Talbert $7.50 40 Gene Trimbell $9.75 4212 Heidi Varney $8.75 3414 Kevin Wallace $9.25 46 Instructions Prepare a form similar to the one that follows. Calculate regular earnings, overtime earnings, and gross earnings for each employee.

Determining Taxes on Gross Earnings Information related to the just-completed pay period of MegaCom Computer Upgrades is provided in the following chart. Determine the amounts to be withheld from each employee’s gross earnings for FICA and income taxes. It is a weekly pay period, so use the tables on page 317 to determine the amount of federal income tax to be withheld. The state income tax is 2% of gross earnings. The social security tax rate is 6.2%, and the Medicare tax rate is 1.45%. Use the format shown in your working papers.

Analyzing a Source Document Examine the following partially completed payroll check stub. The employee, Melanie Galvin, is single and claims one allowance. What amount should be deducted for: 1. Medicare tax? 2. Social Security tax? 3. Federal Income tax?

Preparing a Payroll Check Use the information on the payroll register for Heather’s Dance School and the form in the working papers to prepare a payroll check for Janice Burns for the week ending March 23, 20--.

Payroll Records a. What are two goals of a payroll system? b. List five tasks that an effective payroll system performs.

Gross Pay a. List and describe five employee bases or categories used to compute gross pay. b. Define overtime rate.

Withholdings a. List the three federal taxes that businesses are required to withhold from employees’ wages. b. What three factors determine the amount of federal income tax withheld from an employee’s earnings each period?

Net Pay a. How is net pay calculated? b. Does an individual’s net pay appear on the payroll register, the employee’s earnings record, or both?

Payroll Register a. What information does the payroll register contain? b. Each page of the payroll register covers a period of time. What time period does it cover?

Payroll Funds Distribution a. Explain how direct deposit of earnings works. b. How does an employee who receives a payroll check know how the amount of net pay was determined?

Employee’s Earnings Record a. What is the purpose of the employee’s earnings record? b. What information does the Accumulated Earnings column on the employee’s earnings record contain?

Calculating Gross Pay Wilderness Rentals pays employees either an hourly wage or a salary plus commission based on rental revenue. Hourly wage employees can earn overtime. The overtime rate is 1½ times the regular hourly rate of pay for hours worked over 40 in a week. Instructions For each of the following employees, determine the total gross pay for the pay period. John Gilmartin • Earns an hourly wage of $6.80. • Worked 43 hours this week. Arlene Stone • Receives a salary of $250 per week plus a 3% commission on rental revenue. • Had rental revenue of $760 this week. Tom Driscoll • Earns an hourly wage of $7.35. • Worked 39 hours this week. Ann Ryan • Receives a salary of $185 per week plus 3% commission. • Had rental revenue of $1,235 this week. Identify the employee who had the lowest gross pay for the week.

Preparing a Payroll Register Hot Suds Car Wash has four employees. They are paid on a weekly basis with overtime paid for all hours worked over 40 in a week. The overtime rate is 1½ times the regular rate of pay. The payroll information follows. During the week ending October 9, Dumser worked 39 hours, Job worked 41 hours, and Liptak and Stern each worked 36 hours. Instructions On the forms provided in your working papers: 1. Prepare a payroll register for the week ending October 9. The date of payment is also October 9. List employees in alphabetical order by last name. Use the tables on page 317 to determine the federal income tax withholding. The rate for the state income tax is 2%. Compute social security tax at 6.2% and Medicare tax at 1.45%. Union members pay weekly dues of $4.50. Both Gail Job and Bruce Stern had $6.75 deducted for health and hospital insurance. 2. Total the amount columns. Subtract total deductions from total earnings. Does the result equal the sum of the Net Pay column? If not, find and correct any error(s) on the payroll register. Identify the employee who had the highest amount withheld for federal income tax for the week.

Preparing Payroll Checks and Employee’s Earnings Records The payroll register for Kits & Pups Grooming is presented here and also appears in your working papers. Instructions On the forms in your working papers: 1. Prepare a payroll check and stub for each employee. Where would you record the check numbers in the payroll register? 2. Record the payroll information in the employee’s earnings records for José Montego and Amanda Pilly.

Preparing the Payroll Outback Guide Service has six employees and pays each week. Hourly employees are paid overtime for all hours worked over 40 in a week. The overtime rate is 1½ times the regular rate of pay. Outback pays its employees by hourly rate, salary, or salary plus a 5% commission on total amount of sales. Employee deductions include federal income taxes (use the tables on page 317), FICA taxes at 6.2% for social security and 1.45% for Medicare, state income taxes of 1.5%, and hospital insurance premiums of $5.43 for single employees and $9.37 for married employees. Also, Kim Wong and Tom Lengyel have $10.00 withheld each week to purchase U.S. savings bonds. During the pay period ending October 17, the sales were: Tom Lengyel $1,204.76, Jean Robinson $1,925.80, and Kim Wong $2,135.65. The hourly employees filled in the following time cards. Instructions On the forms in your working papers: 1. Complete the time cards to the nearest quarter hour. 2. Prepare a payroll register for the week ending October 17. The date of payment is also October 17. Each employee’s number, marital status, and number of allowances claimed are listed on her or his employee’s earnings record. 3. Prepare a payroll check and stub for each employee. 4. Record the payroll information for each employee on her or his employee’s earnings record. Calculate the total amount deducted from employees’ gross pay for FICA taxes (social security and Medicare).

Preparing the Payroll Register Showbiz Video has six employees who are paid weekly. The hourly employees are paid overtime for hours worked over 40 in a week, at a rate 1½ times their regular rate of pay. Employee information follows: Mary Arcompora, the store manager, is paid a salary of $300.00 per week plus 1% of all rental sales. Barbara Fox and John French, salespeople, are paid a salary of $200.00 per week plus a 6% commission on all rentals from the “Oldies but Goodies”section. Chris German and David Izbecki, office workers, are paid an hourly wage of $7.25. Susan Tilbert, a stock person, is paid $6.40 per hour. The payroll deductions include federal income tax, social security tax of 6.2%, Medicare tax of 1.45%, and state income tax of 1.8%. Chris German and Susan Tilbert have $12.50 deducted each week for hospital insurance. During the week ending October 24, “Oldies but Goodies” rentals were $484.90 for Barbara Fox and $641.70 for John French. Total rental revenue for the week was $3,917.30. Instructions Prepare a payroll register in your working papers for the week ending October 24. Complete time cards to the nearest quarter of an hour. Use the federal income tax tables provided in the chapter. Compute the total net pay of all employees for the pay period.

CalculatingGross Earnings Job Connect has seven employees, all of whom are paid weekly. For hourly wage employees, overtime is paid at 1½ times the regular rate of pay for hours worked over 40 in a week. Barbara Miller, the office manager, is paid a salary of $375.00 per week plus a bonus of 3% of all revenue over $6,000 per week. Lynn Austin, an office assistant, is paid a salary of $250.00 per week plus 5% of all telephone sales made in the office. Charlene Womack, the office secretary, is paid a salary of $230.00 per week. Susan Dilloway and Doris Franco, placement workers, are paid an hourly wage of $8.95. Pam Darrah is also a placement worker but is paid a commission of $35.00 for every job placement that she completes. David Facini, a part-time maintenance worker, is paid $6.75 per hour. For the week ending October 24, the office recorded the following payroll information. •Total office sales for the week were $8,420.00. • Susan Dilloway worked a total of 38½ hours. • Doris Franco worked a total of 41¼ hours. • Phone sales for the week were $1,375.00. • Pam Darrah made seven job placements. • David Facini worked a total of 23 hours. Instructions Using the form provided in your working papers, calculate the gross earnings for the workers at Job Connect for the week ending October 24. Identify the employee who had the highest gross earnings.