Page 64 - Account for Ag - 2019

10-6 Accounting for Agriculture CH 10]

The various deductions and the amount to be paid to Ralph for the week are summarized as follows:

Earnings (as calculated) ............................ $392.00
Deductions: ................................................
F.I.C.A. Tax .......................................... $24.30
State Unemployment tax ...................... 21.17
Federal Income Tax ............................. 34.00
Group Insurance .................................. 6.00
U.S. Savings Bond ............................... 7.50
United Way........................................... 1.00
Total Deductions.................................. 93.97
Amount of paycheck (Cash to Ralph) ........ $298.03
(Remember that the FUTA tax of $3.14 cannot be deducted from Ralph's pay. This is a tax on the Employer)

It is customary for the employer to furnish a statement of earnings and deductions to the employee with each
paycheck or pay envelope. Special payroll checks with detachable stubs are widely used. The pay period, the
earnings, and the various deductions are shown on the stub. The employee removes the stub before cashing the
check.

EMPLOYEE'S EARNINGS RECORD

In order to determine the amount of F.I.C.A. tax to be withheld from the earnings of each employee, it is
necessary to know the cumulative earnings for the year to date. The amounts to be entered in the Taxable
Earnings columns of the payroll record are also determined by reference to the cumulative earnings of each
employee. In addition, quarterly and annual amounts of earnings and of certain deductions of each employee must
be reported by the employer on various federal and state tax forms. For these reasons, an individual record of
earnings and deductions for each employee is essential.

Employees Earnings Record

Employee’s Name: Ralph Shirley Social Security Number 34-666-9871
Address 777 20th Street Sex Male Employee No. 705
Fresno, Ca 94567 Single Married x Weekly Pay Rate
Date of Birth September 20, 1950 Exemptions (W-4) 3 Hourly Rate $8
Position Sales Assistant Date of Employment July 15, 20xx Date Employment Ended

20xx Earnings Deductions Payment
5.4% Cumulat-
6.2% Federal .8% State Other: tive
Period Total FICA Income FUTA FUTA Medical Savings A-United Net Check Gross
Ended Hours Regular Overtime Gross Tax Tax Tax Tax Insurance Bonds Charities Earnings No. Earnings
Oct. 5 40 320.00 0 320.00 19.84 17.00 2.56 17.28 6.00 7.50 A 3.00 252.02 717 320.00
12 44 320.00 48.00 368.00 22.08 23.00 2.94 19.87 6.00 7.50 A 3.00 288.55 822 688.00
19 47 320.00 92.00 412.00 24.72 31.00 3.30 22.25 6.00 7.50 A 3.00 319.53 926 1,100.00

Illustration 10-3

The form of the employee's earnings record varies, but all types show essentially the same information. A
portion of the earnings record of Ralph Shirley is presented in Illustration 10-3. The upper portion of the form is
used to record miscellaneous personal data about the employee, including such information as the employee's
address, employee number, social security number, and number of withholding exemptions.

The record should provide a line for each payroll period in the year, a line for each of the quarterly totals, and
a line for the yearly totals. Columnar headings are similar to those on the payroll record. The entries to Ralph
Copyright Material
Shirley's record for the week ended October 26 should be compared with the entries opposite Shirley's name in the