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 there are still some other processes that will be needed by the employer before he or she can issue the actual check to the employee.
Some other factors like the withholdings and taxes will be retained from the paycheck before it will be given to the employees. The employee will receive his or her take home pay or net income right after the money will be retained from the gross earnings. There is a periodic change in the income brackets, formulas, and percentages of the IRS or Integral Revenue Services. For instance, in the 1970s, 70 percent of the gross income was the 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 current Social Security tax rate is at 6.2 percent while the Medicare tax rate is set at 1.45 percent of the gross earnings of the employee. Depending on where the employee is in the income bracket, the federal income tax today is ranging from 10 to 35 percent. While the state taxes will be different in each state, and there are 7 states that do not impose income tax. You can discover more about the state law in each state by searching in the internet.
There is an accrued tax that should be contributed and calculated by the employer every time he or she is figuring the payroll accounting. A portion of … Read More..Read More →