Accounting Chapter 7 example #56553

Certain dollar amounts of a person's income tax that will be considered nontaxable for income tax withholding purposes. Also known as exemptions

A one-year period beginning on January 1 and ending of December 31. Employers must use a calendar year for payroll purposes, even if the employer uses a fiscal year for financial statements and for any other reason.

An IRS tax publication of tax tables

A law the majority of employers must follow that contains rules stating the minimum hourly rate of pay and the maximum number of hours a worker will work before being paid time and a half for overtime hours worked. This law also has other rules and regualations that employers must follow for payroll purposes.

Amount of federal income tax withheld by the employer from the employee's gross pay; the amount withheld is determined by the employee's gross pay, the pay period, the number of allowances claimed by the employee on the W-4 form, and the marital status indicated on the W-4 form.

Part of the Social Security Act of 1935, this law taxes both the employer and employee up to a certain maximum rate and wage base for OASDI tax purposes. It also taxes both the employer and employee for Medicare purposes, but this tax has no wage base maximum.

A form filled out by employees and used by employers to supply needed information about the number of allowances claimed, martial status, and so forth. The form is used for payroll purposes to determine federal income tax withholding from an employee's paycheck.

Amount of pay received before any deductions.

An accounting document that summarizes the total amount of wages paid and the deductions for teh calendar year. It aids in preparing governmental reports. A new record is prepared for each employee each year.

A test that is applied to determine whether an empoyer must follow the rules of the Fair Labor Standars Act. If an employer communcates or does business with another business in some other state, it is usually considered to be involed in interstate commerce.

Health care insurance for which premiums may be paid through a deduction from an employee's paycheck.

Gorss earnings, less deductions. Net pay, or take-home pay, is what the worker actually takes home.

A length of time used by an employer to calcualte the amount of an employee's earnings. Pay periods can be daily, weekly, biweekly (once every two weeks), semimonthly (twice each month), monthly, quarterly, or annual.

A multicolumn form that can be used to record payroll data.

Amount of state income tax withheld by the employer form the employee's gross pay.

Shows amount of earnings subject to a tax. The tax itself is not shown.

One of various charts in IRS Circular E that provide information about deductions for federal income tax based on earnings and data supplied on the W-4 form.

A benerfit plan required by federal regulations in which employers must purchase insurance to protect their employees against losses due to injury or death incurred while on the job.

A seven-day (168-hour) period used to determine over time hours for employees. A workweek can begin on any given day, but must end seven days later.