Payroll Accounting 2013

500 Pages·2012·20.57 MB·English

by  Bernard J. Bieg

2 0 1 3 E D I T I O N
Payroll Accounting
Bernard J. Bieg
BucksCountyCommunityCollege
Judith A. Toland
BucksCountyCommunityCollege
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PayrollAccounting,2013Edition ª2013,ª2012South-Western,CengageLearning
BernardJ.Bieg,JudithA.Toland
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A S W E G O T O P R E S S . . .
Chapter 1
E–Verify
E–Verify Self Check is a new online service of E–Verify that allows workers to check
theirowneligibilitystatus.
Chapter 2
Tip Charges
Feesimposedbyrestaurantsfortablesofsixormoredinersequaltoafixedpercentof
thebillisaservicechargeandistobetreatedaswages,nottips.
Drug Representatives
Drug companies have classified their sales representatives as overtime-exempt since
they don’t actually sell medicines to doctors but just promote them. In a case heard by
theSupremeCourtin2012,theovertime-exemptstatuswasconfirmed.
Chapter 3
Medicare Surtax
Starting in 2013, the extra 0.9% Medicare surtax on the wages of single employees
over $200,000 and married employees over $250,000 will be added to the regular
Medicare withholding box on forms W-2. Employers are required to withhold the tax
onanemployee’swagesinexcessof$200,000eventhoughtheemployeemight notbe
liable for the additional HI tax. A line will be added to Form 941 to show the higher
taxrateforupper-incomers.
FICA – OASDI Taxable Wage Base
Inthistextbook,wehaveprojectedtheOASDItaxablewagebasetobe$113,100.The
mostcurrentgovernmentprojectionpegsthebaseat$113,700.
Chapter 7 and Appendix A
Pennsylvania recently approved the issuance of bonds to repay its Federal Unem-
ployment Account (FUA) loans. If these loans are repaid by November 10, 2012,
Pennsylvania will not be considered a credit reduction state. For our purposes in
Chapter7andAppendixA,Pennsylvaniaistreatedasacreditreductionstate.
iii
Copyright 2013 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s).
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Copyright 2013 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s).
Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.
P R E F A C E
PAYROLL ACCOUNTING AND TODAY’S
BUSINESS ENVIRONMENT
Today’spayrollaccountantisamajorplayeronacompany’smanagementteam.Man-
agement’sneedfortimelyandaccuratepayrollcostdataasapartofthetotalplanning
stephasmovedpayrollfromadisbursementandrecordingfunctiontoanintegralpart
ofthemanagementprocess.
With constant changes in the legal environment, technology advancements in the
administration of payroll functions and with tax withholding responsibilities, the pay-
roll accounting occupation has become proactive. During this time when the need for
accurateinformationissocritical,PayrollAccountinghasestablishedarecordofbeing
the most thorough book on the market for over 20 years. Each edition has been
updatedwiththemostcurrentdataavailable.
The 2013 edition of Payroll Accounting continues to provide the most user-
friendly payroll accounting coverage, in addition to significant resources that will aid
instructorsandstudentsalikeintheirmasteryofpayrollaccounting.
NEW TO THIS EDITION
New!
CengageNOW Adds Student Feedback
CengageNOW is a powerful course management and online homework tool that pro-
vides robust instructor control and customization to optimize the learning experience
andhelpyoumeetdesiredoutcomes.
CengageNOWincludes:
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forademonstration.
v
Copyright 2013 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s).
Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.
vi Preface Payroll Accounting 2013
Also New to This Edition
(cid:129) TheWashingtonUpdate—TheWashingtonUpdate,whichhasbeenaddedto
Chapters2,3,4,and5,advisesthestudentofthetaxcodeandtaxlawsthatwere
usedinthecurrentedition.However,becausetaxcode,tables,andlawsmaybe
changedbyCongressafterthetexthasbeenprinted,thestudentisadvisedon
how,inpractice,theycanfindthemostcurrenttaxcode,tables,andlaws.
WASHINGTON UPDATE
THEFEDERALMINIMUMWAGERATEOF$7.25PERHOURHASBEENINEFFECT
SINCE2009.ATTHETIMEOFOURPRINTING,PROPOSALSHAVEBEENMADEBY
THECURRENTADMINISTRATIONTORAISETHEWAGERATEINASERIESOFSTEPS
TO$9.50PERHOUR.NOCHANGESHAVEBEENVOTEDONBYCONGRESS.
(cid:129) EnhancedExcelTemplates—TheExcelTemplateshavebeenenhancedtoinclude
afeedbacksectiongivinginstructorstheoptionforaddingacomment/gradeand
anareaforstudentstoshowtheirwork.
PAYROLL ACCOUNTING IN TODAY’S
TAX ENVIRONMENT
Tax Uncertainties and Assumptions for the
2013 Edition
Many changes are being discussed in Congress concerning not only federal income
taxesbutalsosocialsecuritytaxesfor2013.OnJune30,2011,asurchargeonthefed-
eral unemployment tax expired. As we go to press, no decision has been made regard-
ing these laws. In order to proceed with the timely publication of the 2013 edition of
PayrollAccounting,thefollowingassumptionshavebeenusedbytheauthors:
(cid:129) SOCIALSECURITYTAX—During2011,thetaxrateforemployeeswasreduced
by2percent.Thisratewasextendedthrough2012,andweassumeinto2013.In
the2013editionofPayrollAccounting,the4.2percentrateforemployeesandthe
employerrateof6.2percentwereapplied.
(cid:129) FEDERALINCOMETAX—Sincethe2013rateshavenotbeendeterminedatthis
date,the2012taxtablesandrateshavebeenprovidedinthetext.
(cid:129) FEDERALUNEMPLOYMENTTAX—A0.2percentreductioninthefederal
unemploymenttaxratethatstartedinthesecondhalfof2011andcontinuedinto
2012wasusedforthe2013edition.
(cid:129) UP-TO-THE-MINUTETAXLAWCHANGES—Up-to-dateknowledgeisespe-
ciallyimportantfortoday’spayrollspecialists.Usersofthetextcanfindthelatest
changesonthe‘‘ASWEGOTOPRESS’’pageinthetextorthelatestinformation
onthePayrollAccountingWebsite:www.CengageBrain.com.
OUTSTANDING PEDAGOGY
Chapter 7—The Payroll Project
Chapter 7 consists of a practice set or simulation. The student applies the knowledge
acquired in the first six chapters to a practical payroll simulation as the payroll
accountant for the Glo-Brite Paint Company. The Payroll Project can be completed
manuallyusingfold-outPayrollRegisterslocatedatthebackofthetextorbycomplet-
ingtheExcel¤ templates locatedontheStudentCDoronthePayrollAccountingWeb
site:www.CengageBrain.com
Copyright 2013 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s).
Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.