Chapter 11: Current Liabilities and Payroll ACC205

NOTES

Round all amounts to the nearest cent means to include the .00 at the end. For example, if straight-time pay is 760 then you must enter it as 760.00

Gross Pay= Straight-time Pay (Regular Hours) + Over-time Pay (OT)

Net Pay= Gross Pay minus withholding deductions

Social Security (OASDI) 6.2% (converted to a decimal is 0.062) on first $118,500 earned

Medicare 1.45% (converted to a decimal is 0.0145) up to $200,000

2.3% on earnings above $200k.

FUTA 0.6% (0.006) on first $7k earned

SUTA 5.4% (0.054) on first $7k earned

Salaries/Wages Expense= Gross pay to employees

Salaries/wages Payable= Net pay to employees (pay after deductions)