Podcast
Questions and Answers
What is a wage?
What is a wage?
- A method of paying an employee based on the amount of sales
- The fixed annual sum of money divided among equal pay periods
- The amount paid to an employee for every hour worked (correct)
- The total amount paid for an employee's work
What is a salary?
What is a salary?
- The fixed annual sum of money divided among equal pay periods (correct)
- The amount paid to an employee for every hour worked
- A method of paying an employee based on sales
- The total amount paid for an employee's work
What does a commission represent?
What does a commission represent?
- Payment based on hours worked
- Total earnings from a business
- Payment based on sales generated (correct)
- A fixed annual sum
What are total earnings?
What are total earnings?
What is a pay period?
What is a pay period?
What is payroll?
What is payroll?
What does a payroll clerk do?
What does a payroll clerk do?
What is a time clock?
What is a time clock?
What are payroll taxes?
What are payroll taxes?
What is a withholding allowance?
What is a withholding allowance?
What are payroll deductions?
What are payroll deductions?
Social security tax is calculated on employee earnings up to a maximum paid in a calendar year.
Social security tax is calculated on employee earnings up to a maximum paid in a calendar year.
Employee regular earnings are calculated as regular hours times regular rate.
Employee regular earnings are calculated as regular hours times regular rate.
A separate payroll checking account is used primarily to provide additional protection and control payroll payments.
A separate payroll checking account is used primarily to provide additional protection and control payroll payments.
Today's time clocks can feed data directly to a company's computer system.
Today's time clocks can feed data directly to a company's computer system.
Total earnings are sometimes referred to as net pay or net earnings.
Total earnings are sometimes referred to as net pay or net earnings.
A business may decide to pay employee salaries every week, every two weeks, twice a month, or once a month.
A business may decide to pay employee salaries every week, every two weeks, twice a month, or once a month.
An employee's total working hours can be calculated as ___ hours worked.
An employee's total working hours can be calculated as ___ hours worked.
An employee worked ___ hours after arriving at 7:05 A.M. and departing at 6:05 P.M. with one hour off for lunch.
An employee worked ___ hours after arriving at 7:05 A.M. and departing at 6:05 P.M. with one hour off for lunch.
Employers are required to have a current Form W-4, Employee's Withholding Allowance Certificate, for all employees.
Employers are required to have a current Form W-4, Employee's Withholding Allowance Certificate, for all employees.
Federal income tax is one example of a payroll deduction.
Federal income tax is one example of a payroll deduction.
Social security tax is only paid by the employer.
Social security tax is only paid by the employer.
Qualified retirement plans are approved by the International Revenue Service.
Qualified retirement plans are approved by the International Revenue Service.
Contributions to a Roth IRA do not provide a current tax benefit.
Contributions to a Roth IRA do not provide a current tax benefit.
The investment income in a Roth IRA is subject to federal income taxes when withdrawn.
The investment income in a Roth IRA is subject to federal income taxes when withdrawn.
A check for each employee's total net pay is written on the payroll account of the business.
A check for each employee's total net pay is written on the payroll account of the business.
When EFT is used, the employee does not receive an individual check.
When EFT is used, the employee does not receive an individual check.
Study Notes
Wage and Salary
- Wage refers to the hourly payment for work performed by an employee.
- Salary is a predetermined annual sum distributed equally across pay periods.
Compensation Methods
- Commission pays employees based on the sales they generate.
- Total earnings combine wages, salary, and commission paid by an employer.
Payroll Concepts
- Pay period indicates the duration covered by an employee's paycheck, typically in days or weeks.
- Payroll encompasses the total earnings of all employees for a specific pay period.
Payroll Management
- Payroll Clerk is responsible for gathering payroll data, preparing, journalizing, and posting payroll transactions.
- Time Clock tracks each employee's arrival and departure times.
Payroll Taxes and Deductions
- Payroll Taxes are based on a business's payroll figures.
- Withholding Allowance reduces total earnings for dependents supported by the taxpayer.
Social Security and Medicare
- Social Security Tax funds old-age, survivor, and disability insurance.
- Medicare Tax provides coverage for hospital insurance.
Employee Earnings and Retirement Plans
- Accumulated Earnings is the total gross earnings recorded year-to-date for an employee.
- Qualified Retirement Plan offers tax benefits and must be approved by the Internal Revenue Service (IRS).
Specific Retirement Accounts
- 401(k) is an employer-sponsored retirement savings plan.
- Individual Retirement Account (IRA) allows for deferred federal income tax benefits.
- Roth IRA facilitates tax-free withdrawals under certain conditions.
Payroll Documentation
- Payroll Register summarizes employee earnings, deductions, and net pay for a given period.
- Employee Earnings Record logs details of earnings and deductions for individual workers.
Payment Methods
- Voucher Check contains a detachable stub detailing cash payments.
- Direct Deposit electronically transfers an employee's net pay into their bank account.
Miscellaneous Payroll Facts
- Employees' hours worked can be calculated from arrival and departure times.
- Social Security tax is subject to limits based on employee earnings each year.
- Payroll taxes withheld represent a liability for employers until payment to the government is made.
Tax Withholding Insights
- Form W-4 collects information on withholding allowances for federal income tax.
- The amount of income tax withheld is influenced by marital status and the number of allowances claimed.
Tax Obligations and Retirement Contributions
- Employees' contributions to a 401(k) lower the taxable earnings for payroll purposes.
- Contributions and investment income in IRAs generally remain untaxed until withdrawn.
Payroll Check Processing
- A separate payroll checking account enhances protection and control of payroll payments.
- The voucher for payroll checks includes earnings and deductions information up to date.
Final Considerations
- Using Electronic Funds Transfer (EFT), employees do not receive physical checks.
- Proper documentation and form management are essential for accurate payroll processing and tax compliance.
Studying That Suits You
Use AI to generate personalized quizzes and flashcards to suit your learning preferences.
Description
Test your knowledge on payroll management and compensation methods, including wages, salary, and various payroll concepts. This quiz covers essential topics like payroll taxes, deductions, and the roles of payroll clerks. Evaluate your understanding of how payroll systems operate within an organization.
