Payroll Accounting Flashcard

Front

What is the formula for calculating gross wages?

Back

Gross Wages = Total Hours Worked * Hourly Rate

Front

What are the types of withholding taxes in payroll accounting?

Back

federal income tax, state income tax, and FICA taxes

Front

What are some examples of employee benefits in payroll accounting?

Back

health insurance, retirement plans, paid time off, and bonuses

Front

What are payroll deductions and why are they important?

Back

Payroll deductions are amounts of money taken out of an employee's paycheck to cover expenses and fulfill financial obligations.

Front

How is gross wages calculated for an hourly employee?

Back

Multiply the number of hours worked by the hourly rate of pay.

Front

What is the difference between gross wages and net wages?

Back

Gross wages are the total amount earned before deductions, while net wages are the amount received after deductions.

Front

What is the purpose of withholding taxes in payroll accounting?

Back

To collect income taxes from employees throughout the year.

Front

What are some common payroll deductions for employees?

Back

federal income tax, state income tax, Social Security tax, Medicare tax, health insurance premiums, retirement contributions, and garnishments

Front

How are employee benefits typically accounted for in payroll?

Back

By deducting the cost of benefits from the employee's gross pay before calculating taxes and other deductions.

Front

What are some legal requirements for payroll accounting?

Back

Accurately calculating and withholding taxes, maintaining records of employee wages and hours worked, providing pay stubs to employees, and complying with minimum wage and overtime laws.