Chapter 7 Test Flashcards
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 overtime
Fair Labor Standards Act
Test applied to determine whether an employer must follow the files of the FLSA
Interstate commerce
Length of time used by an employer to calculate the amount of an employee’s earning
Payroll period
all earnings before any deductions
gross earnings
Seven-day period used to determine overtime hours for employees
Workweek
Form filled out by employees and used by employers to supply needed information about the number of allowances claimed, marital status, and so forth
Form W-4
Certain dollar amounts of a person’s income tax that will be considered nontaxable for income tax withholding purposes
Allowances
Amount of federal income tax withheld by the employer from the employee’s gross pay
FIT withholding
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
Wage bracket table
IRS tax publication of payroll procedures, including tax tables
Circular E
Amount of state income tax withheld by the employer from the employee’s gross pay
SIT withholding
Law that taxes both the employer and employee up to a certain maximum rate and wage base for OASDI tax purposes
FICA
Shows amount of earnings subject to tax
Taxable earnings
Health care insurance for which premiums may be paid through a deduction from an employee’s paycheck
Medical Insurance
Gross earnings, less deductions
Net pay
Multicolumn form that is used to record payroll data
Payroll register
Accounting document that summarizes the total amount of wages paid and the deductions for the calendar year
Individual employee earnings record
Tax paid by employers to the federal government. 0.6% up to $7,000
FUTA
Tax usually paid only by employers to the state for employee unemployment insurance
SUTA
Insurance purchased by most employers to protect their employees against losses due to injury or death while on the job
Workers’ compensation insurance
Rate assigned by an insurance company to determine the cost of insurance coverage
Experience or merit rating
Cost to employers that includes the total of the employer’s FICA OASDI, FICA Medicare, FUTA, and SUTA taxes
Payroll tax expense
