Question

taxation

a) You have been called for an interview for the post of payroll accountant. Among the responsibilities as a payroll accountant is to ensure the company complies with all the requirements of the tax laws and regulations with regards to employees' income tax. You are doing preparation to attend the interview. Required: Write a short note on what you need to do as a payroll accountant to be compliant with the tax laws and regulations. (5 marks)

Answer 1

Payroll accountant is responsible for calculation of employee pay checks. They must keep records of employee time cards, requests for paid and unpaid leaves of absence, as well as other factors that are essential to accurate payroll calculation. They often act as internal payroll auditors. The Internal audit process is used by payroll accountant to review, evaluate and assess the accuracy of payroll and tax documents.

Payroll accountants must be compliant in tax laws and regulations. The payroll department is accountable for withholding the appropriate amount of taxes from each paycheck. Federal, State and Local income tax, Social Security tax and unemployment tax are some of the taxes to be deducted. The hourly wages and annual salaries are significant for calculating gross wages but the net amount that employees receive is conditional upon a number of factors such as their expected tax bracket, medical plan contributions and other employee benefit plans such as a 401K, life insurance or annuity program. It is the accountability of payroll accountants to make sure that all compulsory withholdings are deducted from each paycheck. At the Corporate level payroll accountants are liable for making quarterly payments to the Internal Revenue Service and other state and local taxing authorities. Federal Unemployment Tax, Social Security tax and Workers’ Compensation are some of the taxes to be paid at corporate level. Half of an employee’s Social Security and Medicare tax liability are to be paid by corporates.

Year end individual compensation reports to each employee and to government for tax purposes too are part of payroll accounting.