The Choices For You In Payroll Accounting
The basic guide of payroll accounting will start with the hours worked by a certain employee multiplied to the rate of payment in order to give the gross amount that is earned for the employee. This kind of calculation is usually done every week, every two weeks, or once a month. And before the employer can provide the actual check to the employee, he or she will require some other procedures.
The withholdings and the taxes should first be retained from the actual paycheck before the employee will receive it. Once the money will be retained from the gross earnings, the employee will then receive the take home pay or the net income. There will always be a periodic change in the IRS or the Integral Revenue Services when it comes to the formulas, income brackets, and percentages. An example for this is during the 1970s, 70 percent of the gross income was the highest federal income bracket.
The State and Federal taxes, Medicare, and Social Security are the items that will be withheld from the paycheck of an employee. The Medicare tax rate today is set at 1.45 percent and the tax rate in Social Security is at 6.2 percent of the gross rate of the employee. The federal income tax today is ranging from 10 to 35 percent that will be based on the income bracket where the employee falls into. There are 7 states that do not impose income tax, but the state taxes in the rest of the states will be different. You can discover more about the state law in each state by searching in the internet.
Every time the employer is figuring out the accounting in payroll, he or she needs to calculate and contribute an accrued … Read More..Read More →