Payroll Accounting Flashcards
Memorize
What is FICA
Federal Insurance Contribution Act - Contributing to Social Security (OASDI) and Medicare (HI)
What is a payroll register?
Multicolumn form used to assemble the data needed for payroll purposes
What is a W2?
Wage and tax statement used by an employer to report wages paid and by an employee to file annual taxes
What is a W4?
Employee’s tax withholding
What is a Form I-9?
Identifies the employee and verifies authorization to work in the United States
When do employers have to give their employees their W2 for the previous year?
January 31st
What is the formula to calculate net pay?
Gross pay - taxes and deductions
TRUE/FALSE? FUTA is a tax levied to pay state and federal administrative expenses of the unemployment program?
TRUE
What does the Fair Labor Standards Act Regulate?
Minimum wage and overtime pay requirements
TRUE/FALSE? Under FLSA, employers must keep records of hours, wages, and overtime pay
TRUE
What states do not have state income tax?
1) Alaska 2) Florida 3) Nevada 4) New Hampshire 5) South Dakota 6) Texas 7) Washington 8) Wyoming
TRUE/FALSE? SUTA is used to pay unemployment benefits
TRUE
What are the two taxes under FICA that are used to pay employers and employees?
OASDI (Social Security) and HI (Medicare)
TRUE/FALSE? Income taxes can only be imposed by the federal government
FALSE
TRUE/FALSE? EEO prohibits hiring discrimination
TRUE - EEO (Equal Employment Opportunity)
How long does FMLA protect and employee’s job for?
12 weeks
Current minimum wage hourly rate
$7.25
TRUE/FALSE? FMLA guarantees paid leave for employees
FALSE - FMLA guarantees UNPAID leave
What is vesting?
Conveys to employees the right to share in a retirement fun in the event they are terminated before the normal retirement age
A weekly payroll frequency has ____ pay periods
52
A bi-weekly payroll frequency has ____ pay periods
26
A semi-monthly payroll frequency has ____ pay periods
24
A monthly payroll frequency has ____ pay periods
12
When is overtime pay required under FLSA?
When an employee works over 40 hours in a calendar week
A “tipped employee” is one who engages in an occupation in which tips of more than ____ a month are regularly recieved
$30 per month
How is an employee who is paid on a “piece-rate” basis compensated?
Paid by “piece” produced
Under what parameters are tips considered taxable wages?
When more than $20 per month are regularly received
Under enterprise coverage, all employees of a business are covered by FLSA if the organization is categorized as…
(Hint: 7)
- Hospital
- Nursing Home
- An institution for the mentally ill
- An institution for the mentally or physically disabled and gifted children
- Preschool, Elementary School, or Secondary School,
- An institution of higher education
- A public agency
What penalties can be imposed on an employer for violating FLSA?
(Hint: 5)
- Backpay
- Civil Penalties
- Liquidated Damages
- Hot Goods Injunction
- Attorney Fees & Court Costs
What employer returns are required for Social Security?
(Hint: 2)
- A quarterly tax and information return form (Form 941)
- An annual return of withheld federal income taxes (Form 944)
What conditions must be met for an employee to be considered “covered” under FICA
(Hint: 3)
- The comp the individual receives is “taxable” wages as defined by FICA law
- The individual is an “employee” as defined by the common law relationship
- The service the individual is rendering “employment” as defined by FICA law
TRUE/FALSE? Exempt employees are entitled to overtime pay
FALSE
In what situation would “wage theft” be acceptable?
It is never acceptable.
Are a W2 employee and a 1099 employee the same thing?
No
What does EIN stand for?
Employer Identification Number
TRUE/FALSE? The law requires overtime pay to be 1.5 times the employees regular hourly rate of pay
TRUE
How much can an employee credit for a “tipped employee”?
$5.12
If a non-exempt employee takes his/her work home. Must the employee be paid for this extra time?
Yes, the non-exempt employee would still be paid for those outside hours. This still applies even if the employee is expressly told not to.
What percentage of minimum wage can a retail establishment pay to an employee that is a full-time student?
85%
What percentage are employees taxed for their FICA tax rates?
6.2% and 1.45%
What are the self-employed FICA tax rates?
12.4% and 2.9% (double the employee FICA tax rates)
TRUE/FALSE? An employer’s matching contributions into an employee’s deferred compensation agreement (such as 401K) is taxable for FICA
FALSE
What is Form 941? And how often is it filed?
Federal Tax Return showing total taxes (for both employer and employee) including FICA wages paid, FICA taxes, and income tax. Must be filed quarterly to avoid penalties.
What is Form 944? And how often is it filed?
Federal Tax return (for both employer and employee) showing only income tax. Must be filed annually.
After what point is sick pay no longer considered wages for FICA tax purposes?
6 calendar months
