Chapter 10 Flashcards
What are the two types of Unemployment tax withheld from an employee’s pay?
Federal Unemployment Tax Act (FUTA)
State Unemployment Tax Act (SUTA)
How do you compute gross earnings?
Hours worked TIMES hourly rate
According the the book, Social Security percentage is what?
6.2%
Gross earnings, deductions, and net pay are recorded in what register?
The Payroll Register
Where does a bookkeeper journalize payroll transactions?
The general ledger
Why is it important to maintain an earnings record for your employees?
To keep detailed information of all earnings of each employee and to assist with end of year gross earnings and deductions.
What are the four types of earning possibilities for an employee
Hourly rate, salary, commission rate, piece-rate.
A W-4 is necessary for an employee to insure what?
Withholding allowances for federal taxes.
What form does a contractor fill out?
1099
How do you calculate time & a half?
The hourly rate + half the hourly rate.
Example: $10/hour pay rate
Time = $10
half time = $5
Time & a half = $15.00
If an employee makes $10 an hour and works 40 hours? Does he make overtime?
No. Overtime is only for hours worked beyond 40.
The employer matches 2 of the following withholdings. Which 2 are they?
Social Security (FICA)
Medicare
Federal Unemployment Tax Act (FUTA)
State Unemployment Tax Act (SUTA)
Federal Income Tax
The employer matches only Social Security (FICA)
and Medicare.
Who decided on a 40 hour work week?
The Fair Labor Standards Act of 1938. Also called the Wage & Hour Law.
Who is required to keep the Wage & Hour Law?
Only firms engaging in interstate commerce. Business across State lines
Who pays the entire amount of the Federal Unemployment Tax Act (FUTA), the State Unemployment Tax Act (SUTA), and Worker’s Compensation Insurance?
Employer
The factors of marital status and dependents will effect which tax?
Federal Income Tax
The amount of Medicare taken is dependent on what factor?
Wages earned
What is net pay?
Total earnings LESS deductions
What is the ceiling rate for calculating Social Security (FICA) tax?
No income over 113,700 annually is taxed. All income UNDER 113,700 is taxed. Even if it’s only part of the paycheck.
According to the book, what is the amount an employee has to earn before an Employer can stop paying FUTA or SUTA
$7000.00
This might not be accurate in 2023 but it was in 2016.
