Payroll deductions, employee earnings records LO2 LO3 LO6 Refer to Problem 9-4A....

Payroll deductions, employee earnings records

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Refer to Problem 9-4A. Before the pay period ending June 1, 2009, the individual employee earnings record for Emily Jacobs reports the following:

Social Security taxes of 6.2% and Medicare taxes of 1.45% are deducted from each employee’s gross pay.

Tax withholding tables are used to compute amounts to withhold for federal income taxes. State income tax withheld equals 8% of the dollar amount of federal income taxes withheld.

Required

1. Refer to Problem 9-4A and enter the payroll information for the pay period ending June 1, 2009, in an individual employee earnings record for Emily Jacobs.

2. Assume that Emily Jacobs works exactly 40 hours in each of the payroll periods ending June 8, June 15, June 22, and June 29 of 2009. Compute the amounts to withhold from Emily’s weekly net pay for

Social Security taxes, Medicare taxes, federal income tax withholdings, and state income tax withholdings.

3. Enter the amounts computed in requirement 2 in Emily Jacobs’s individual employee earnings record.

4. Compute the total amounts of gross pay, federal income tax withholdings, state income tax withholdings,

Social Security taxes, Medicare taxes, and net pay for Emily Jacobs for the month of June

1 through June 29, 2009. Enter these amounts in Emily Jacobs’s individual employee earnings record.

5. Update the year-to-date totals of gross pay, federal income tax withholdings, state income tax withholdings,

Social Security taxes, Medicare taxes, and net pay on Emily Jacobs’s individual employee earnings record through June 29, 2009.

(Refer to Problem 9-4A.)

Payroll deductions, net pay, payroll register

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Mackenzie Price operates Downtown Salon and Spa. Information on her three employees for the payroll period (week) ending June 1, 2009, is provided below. Each employee receives one and one-half times the normal hourly pay rate for any hour worked beyond 40 in a week. The FICA Social Security tax rate is 6.2% on the first $106,800 of each employee’s gross pay and the FICA Medicare tax rate is 1.45% on all of this week’s wages paid to each employee. Federal income tax withholdings are computed from withholding tables and state income tax withholdings are assumed to be 8% of the amount withheld for federal income tax. (Use the withholding tables in Exhibits 9.4 and 9.5.)

Required

1. Enter each employee’s name, year-to-date earnings before this pay period, marital status, regular hourly rate, hours worked, and number of withholding allowances in a payroll register. Hours worked beyond 40 are considered overtime hours.

2. Compute the regular, overtime, and total gross pay for each employee for this pay period. Enter these amounts in the payroll register.

3. Compute the amounts of FICA taxes to be withheld from each employee’s pay and enter these amounts in the payroll register.

4. Determine the amount of federal income tax to withhold from each employee’s gross pay. Use the withholding tables in Exhibits 9.4 and 9.5. Enter these amounts in the payroll register.

5. Determine the amount of state income tax to withhold from each employee’s gross pay. Enter these amounts in the payroll register.

6. Compute each employee’s net pay and enter it into the payroll register.

7. Total the payroll register.