QuickBooks Payroll - QuickBooks Pro Desktop 2019

1. QuickBooks Payroll QuickBooks Pro Desktop 2019: if we are a business owner who would like to run our business better by properly processing payroll or a business professional who would like to understand how payroll is processed in a business setting within a business set up? Or an accounting student who would like to understand the concept of payroll and how they are applied in practice to accounting software such as QuickBooks? This course is a course for us. What will we learn? Payroll payroll within QuickBooks. Who will we be learning from? We'll be learning from a practicing certified public accountant. C p a. Who has a charter Global management accounting designation. A Master's of Science in Taxation is a certified postsecondary instructor and curriculum development expert, someone who has experienced putting together courses, putting together Siris of courses, courses of a technical nature such as QuickBooks in a way that students can get from them what they want. Please join us for QuickBooks payroll QuickBooks Pro Desktop 2019. It will be great 2. 10 Regular & Overtime Pay Calculation: In this presentation, we will calculate regular and overtime pay for an hourly worker. We'll start off with the calculation of regular pay, which is pretty straightforward as long as we know what how many hours were worked and what the rate is. Note, however, that to know the hours worked for regular pay, we do need to know what the overtime rules are and how to calculate what is regular pay versus overtime pay. For example, with a new employees, it's subject to overtime, and they're an hourly worker. We typically have the federal rule that we have Teoh have anything over 40 hours in a work week would then be over time. So if somebody worked 43 hours in a work week, then 40 of them would be regular. Three of them would be over time. It's possible for states to have more stringent rules, such as daily requirements like eight hour day workday, anything over eight hours being over time as well. So in that case, would need to be able to calculate the daily wages and subject, see what would be over time. This does get a little bit more complicated, because if we're semi Muffy or bi weekly or monthly payers o R process our payroll in those time frames that rather than just weekly then we still we still need to go back on and check the weekly totals and make sure that, uh, we're in compliance with the overtime and paying the proper amount for overtime. And if we're subject and daily totals and then we need to go back and make sure that we're picking up any kind of over time, that would be calculated for for that as well. Once we know the hours, then it would be, in this case, 40 hours in the work week. Just multiply it times to pay rate, which would be whatever would be agreed upon in the terms of employment. In this case, 17 and 40 times 17 in this case would be 680 for regular pay. Then we've got the overtime pay now the overtime pay. We first need to know what the overtime pay rate will be. Typically, it's gonna be time and 1/2. It's often called time and 1/2. Let's try to break down what that actually means, though, and we'll see three different calculations we can use to do this. This is a very common calculation in daily life as well. So it's important toe. Just understand what this means. So if we if we had a regular pay of 17 time and 1/2 basically means we're gonna get a 50% raise, it's kind of equivalent to get in the rays of 50% or 0.5 for any hours better over time. That means that we got an $8.50 raise on this case, which is 17 times 170.5 or 50% means that we haven't $8.50 basically raised. If we add that to our original 17 that means that our overtime rate is $25.50. This is a similar calculation. If we were to calculate, say, a tip or something like that, it would be a, you know, 50% tip, but it would be 17 and then we have 50%. We're adding another 8 50 on it to it, and then we have to add the original amount to get to the total dollar that we're going to pay now. We could do this a little bit more quickly. We could say that the $17 is the original pay and just multiply it times 1.5 time and 1/2 time and 1/2 time, 100% and 1/2 another 50%. So that's really what we kind of mean. By time and 1/2. It's 1.5 150%. Which means that we're gonna multiply one which results in 17 and 50 which is the other component which will give us the 25 50 now one last week. So this would be the faster calculation. We want to calculate a tip. If we had a 20% tip or something instead of most trying times 200.2 or 20% then adding the original, we could just say times one point to him and give us the amount we need to actually pay. So then, if we do this again, we got the regular pay of 17 and we multiply it. Then 150% which is just 1.5 times. You know, we'll put to a percent move the decimal two places over. In other words, if you had 1.5 times 100. It would be 100 50 or move the decimal two places over 150%. Just another way to say that same thing. So that's what we mean when we multiply the overtime rate. Once we have that overtime rate, then it's pretty straightforward to do the overtime calculation. So again, this is kind of the way we might if we were just to kind of make up what is over time by without thinking about it too much, we probably come up with this longer calculation, and then we can trim it down to something like this, or just another represent imitation like this. Okay, so then we're gonna go to the payroll register and we'll actually calculate the overtime in this case. Notes. We've already filled out that regular pay, which was 40 hours at 17 which gives us the 680. Then we're saying there's three hours overtime. There's 43 total hours, 40 of them regular, three hours overtime and the overtime rate. Then we're saying it's gonna be that 25. So the total pay is going to be this 76 which would be the three hours times 25.5 rate, or 76.5 3. 12 Payroll QuickBooks Why Learn: In this presentation, we will discuss why learned payroll as it relates to QuickBooks. One of the main reasons toe learn payroll as it relates to a computer software such as QuickBooks is because that is the way that payroll will be processed most of the time. These days, we can learn the payroll concepts, and it's important to learn payroll concepts. But in practice, of course, they will be processed using some type of computer software. Reason being is because the payroll laws are getting very complex. So even if we only have a few people involved in terms of payroll, it's still fairly complex to process the payroll. And we almost have toe have some support with that, and that support is typically going to come from some type of software and or outside professional help. So, therefore, even if we are going to outsource payroll to payroll companies such as A T. P or paychecks, or pay for our full service within QuickBooks toe, help us to process the payroll. We can't really get around needing to know and understand some components of peril because even if we outsource it to a T. P or paychecks, we pay for full service payroll within QuickBooks, we're still gonna have to deal with questions and problems. If we have ADP and Paychex, we're gonna have to somehow get into our bookkeeping system so that we can report it on tax returns and have the information to answer employee questions and make sure that our income statement is properly reported in terms of the payroll expense on that side of things, just a really big part of the company, even if we only have a few people involved. And therefore we need to know something about the theory as well as something about the practice. And the practice is gonna involve some type of software such as QuickBooks. As we learn, the payroll system within the QuickBooks setting will also see that the way the QuickBooks process of the payroll process will generally flow as we generate payroll. So we'll see that we were going to generate the paychecks. We're gonna pay the liabilities, we're gonna process the payroll, and that'll give us a better understanding from a theory standpoint on how in practice it is done, whether it's done by us or someone outside of us, and we can therefore, if it is done by someone other than us within QuickBooks, we can better understand how to see that data, how to put that data into the system, how to analyze that data and answer questions related to payroll. If we better understand the process that payroll goes through, best way to do that is to actually enter payroll and see what it looks like as we are entering payroll into a system such as QuickBooks. 4. 14 Regular & Overtime Pay QuickBooks: in this presentation, we will discuss the calculation of a regular and overtime pay within. QuickBooks, here we are on the home page. We currently have the open windows open. In order to open the open windows, you go to the view, drop down and select the open windows list. We're gonna go to the payroll items list that's gonna be found in the lists. Drop down and we're gonna go down to the payroll item list. Payroll item list. This is what we're gonna set up the items within QuickBooks that will drive the payroll calculations. Four things such as the regular pay and the overtime pay. We'll go through the set up process later. But just to give an idea of how these will be calculated, they will be driven by these payroll items. For example, we have the hourly item here, the hourly payroll item. If we double click on the hour of the item, we could see this little interview process which will go through the set up process for that hourly payroll item. It's gonna go to apparel expense account when we use it, and that's gonna be the hourly pay when we go to the overtime pay item. Then we can see the calculation at 1.5% double clicking on that item and going through the little interview process, we could see it's currently set at 1.5 as opposed to double time. In some circumstances, we could set or need some type of double time, depending on the regulations that we are in or how we've said a payroll, what agreements we've come to and we can say next. And it's going to go to the payroll expense and finished. Once we set those items up when we process payroll, then the calculations will be done much for us through the QuickBooks system. And to get an idea of that, let's take a look at a paycheck. We're gonna go to the banking drop down, up top. We're gonna go to use register, and we're gonna open up the checking account. There's the checking account, and if we pick up one of these employees, these are all paychecks in this example problem that we have. This is the S Corp paid paid role. We're going to go to Anthony here, Anthony More if we double click on just the paycheck here we will then get the payroll information and then we'll go into the paycheck detail and that will show the paycheck that was made. So as we processed payroll, this is basically the processing screen, and you could see that those payroll items then are being driven here with the hourly pay and the overtime. So we then set up the hourly pay for this employee being 23rd 25 then QuickBooks should calculate for us what the overtime should be. Based on the payroll items we set up 25 times, 1.5 gives us the 37.5, and then we just put in the hours of regular and overtime. QuickBooks then calculates those for us of the 25 times the 160 hours. This for an entire month of payroll, gets us the 4000 the 37 50 times. Thea, the one hour gives us the 37 50. So this is how it would be calculated. The the payroll within QuickBooks. We can see that, of course, once we set up those payroll items, the driving factors within QuickBooks it will really help us the process payroll much more easily. By calculating the hourly and over time for us 5. 20 Federal Income Tax FIT: In this presentation, we will calculate the federal income tax F i t. Using tax tables. This is gonna be our example set of data. We're looking at the payroll register, focusing in mainly on Bill Smith. Bill Smith, who is an employee, worked 40 hours at 17 rate for a regular pay of 683 hours. Overtime overtime rate. 25 54. Overtime pain 76 50 Total earnings, then 756 50. We're focusing here on the calculation of F i t. Federal income tax. Remember, that's not our federal income tax as the employers, but the employees. Federal Income tax, which is reported on the employees 10 40 at the end of the year, however, is something that we need to calculate throughout the year. Take out of their paycheck at the employer in accordance to comply with the law. So that's what we're doing here. We're gonna remove federal income tax in a new attempt. Teoh match How much is going to be taken out so that when they do that 10 40 at the end of the year, it will have already been removed, and so that's what we're going to first. We need to know what the f I t wages are, which could differ then total wages. So total wages is here. Was that 756 50? It's gonna be reduced by those things that are on the 10. 40 for example, typically, uh, reduced for growth pay or adjusted gross income, things like retirement plans and, um, the cafeteria plan. So we're gonna take those out of f i t. So that we can then calculate f i t using the tables. Also note that the federal income tax when we say federal income tax it's not the employers taxes that we pay on our tax return, meaning a corporation pays federal income tax. A partnership pasted on a flow through eso is the sole proprietor. However, those air on net income and we're paying the federal income tax for the employees that the employees in essence oh, and will ultimately report on their 10 40. So to get the federal income tax, wages were going to start with the 756 50 and then we'll subtract from what the cafeteria plan. So we first need to know that so we got to get the cafeteria plan on the retirement plan. So these these numbers, we gave these numbers here, and so that's gonna be the 7 56.5 minus 250 minus. The 35 would give us the 4 71 50 So we're looking for 71 50 is gonna be our actual f i t wages. And then we're not focused so much on the second employee. But if Pam had to 80 and 1 85 same type of thing, we're gonna say 3653.85 minus 280 minus the 1 85 gives us 3001. 88. 85 1 3088 85 So these are the numbers we're then gonna use to look up our tables. Now that we have these numbers, we can go to our tables and look this up and there's the totals here. So if we could our tables, they look like this and we're focusing in here on this first f I t wages and looking this number up in the table, it's important to note that we get the right table. We have to. If we go through the circular e to find this and you go into the iris dot gov website and find it the current circular, e whatever the current time period is, and then go to the brackets and find the correct tables, there's gonna be a ton of tables because we're gonna have to have a different table for pay periods. So we'll need to know when the paper it is ours, we're gonna say is weekly in this case. Could be bi weekly. Could be semi monthly. Could be monthly. Uh, just make sure not to mix up semi monthly and bi weekly there different eso you want to pick up the right the right table there and ah, then we need to know if the person is the single or married. So again there's gonna be two separate tables for each pay period based on single or married. And note. All this complexity is basically because of the complexity of calculating the tax. It's a it's a progressive tax system, so we have to somehow figure out how what the tax brackets do. And one way to do that is with the tables. Clearly, it's a lot easier to have software that will automatically look up this information for us . But it's still important toe kind of look this up and try to figure out why the tables are this way so that we can understand it. And if we do any tax planning, it's important for us to have some concept of what's going on here. So we're gonna look for this 1 41 within these two sets and then find the number of exemptions here, which for Bill is one. So we're going to say that it's going to be between the 4 70 the 480 right in between here , and that's gonna be the exemptions. One will get us to this 300 or this $35. So on this one paycheck, we're gonna withhold $35. Also note that if it was on the 4 70 like if noticed, four seventies here twice. So you might say, Well, should we pick the 34? The 35 typically will pick the higher number, and that's kind of like a conservative type estimate. We're wanna estimate on withholding too much than too little. We would rather have our employees get a bigger withholding or bigger return on their 10 40 at the end of the year than pain? Because that's probably more likely to cost problems so typically will withhold more than less, you might ask. Well, this is kind of complicated. What if I picked up the wrong number, which is possible? Like if if we're doing this by hand, If we picked up the wrong number, it would kind of watch itself out of the end? The f i t. It kind of works itself out in a way, because when we do the 10 40 we'll have the will have the total with holdings that will match up to what the actual tax calculation was based on our 10 40. And if we withheld too much, then we'll get more of a refund. If we withheld too little, then we'll owe money and, ah, so that's gonna we want it to be right on target because we want to give our employees as much money as they can in their paycheck or if we are. The employees were trying to calculate our payroll to get as much as we can in our paycheck and not owe any money at the end of the year. Getting a refund is not the objective. The objective is to not pay penalties and interest at the end of the year. And if we end up owing a lot of money, we could then end up paying interest in penalties. Um, otherwise we would It would be better for us to actually not pay until the end of the year , because then we get to hold onto our money longer and invested and possibly make money on it. So that's why that's why we have to do that with holdings. The iris wants their money sooner, and therefore we have to do these with holdings and get the money to them as the time passes. So this is gonna be the 35 then. And so we're gonna put that into our information here. So we have the f i t. And we're gonna withhold the $35 from the F I t on our table 6. 20 Payroll Legislation: In this presentation, we will discuss a roller legislation. We're gonna talk about Laws that are related to Payroll noted that this course will get into the calculation of payroll, the recording of the debits and credits the accounting related to payroll. But we do want to give some context as well and list out some of the laws related to payroll for a few different reasons. One. Some of them will have a direct impact on the journal entries that we will make to. We want to know the complexities of payroll outside of just recording the payroll so that we can see how the internal controls could be affected as well. We want to see how they could be related in terms of payroll and human resource is in order to have a better understanding of what's entailed within payroll. We won't go over all the laws in detail, but we'll give you an idea of the complexity of payroll and how it has changed over time. Once we get to recording the payroll, then, of course, we're gonna be focusing in on those types of legislations that have to do with mainly taxes that air requiring us to make a deduction in those types of laws will be similar on the federal level. State laws will typically have similar type of laws. And if we're in other countries other than the US, then we're typically gonna have similar type of withholding laws that can be applied in terms of taxation. So when we think about taxation, it's just really a question of Okay, what type of taxation is being used here when we try to think of how are we going to record the journal entry related to the processing of payroll? Once we know that we can then figure out how to apply and just we have to use the appropriate tax rates, of course, and then apply the circumstances and record the journal entry in accordance with the rules that we are in. As we list through some of these laws, remember that some of them are gonna have a direct impact on the recording of PayPal on some of them have overlap between human resource is in other areas. We've got the Equal Pay Act of 1963 which deals with women in the workforce and working towards having a more equal pay for the same work being provided. We've got the Civil Rights Act of 1964 which is going to prevent or reduce discrimination based on race, gender or national origin. We've got the Age Discrimination in Employment Act, which prevents or reduces the likelihood for mandatory retirement for workers over the age of 40 and we have the Occupational Safety and Health Act of 1970. We also have the Employee Retirement Income Security Act of 1974 which is gonna protect and safeguard the retirement fund accounts for employees. We've got Cobra of 1985 which allowed for health insurance continuation after termination so that someone doesn't get thrown off the health insurance. There's gotta be a requirement for that continuation of health insurance. We have the Immigration Reform and Control Act of 1986 which deals with employers having proof of employment eligibility within 20 days of employment. So it once again gets a little bit more responsibility to the employer to make sure that the there's proof of employment eligibility by the employee. We've got the Americans With Disabilities Act of 1990 and that's gonna protect the rights of disabled workers, the Civil Rights Act of 1991 that deals with infringements and monetary penalties for civil rights issues. One of the major pieces of legislation with regard to recording payroll taxes. Recording the Journal Entry Recording the taxes related to payroll is the 16th Amendment to the US Constitution of 1913 and this mandates that the employer be the one that collects payroll taxes from the employees. And this is a huge change, the huge change in focus in terms of whose responsibility it is in some sense to pay the payroll taxes. In other words, the assumption before this time would be that all individuals are going to have the responsibility of reporting their own payroll taxes, as we still do at the end of the year, with with our 10 40 we report the taxes and paying the payroll taxes. However, this mandates that the responsibility for withholding lies, at least in part on the employer, and that's a huge shift for the employer now has a responsibility, a huge responsibility. Teoh. Withhold the payroll taxes from the employees and then, of course, to process and give that information that that has been done and that's going to include a lot of added paperwork. And so wherever that is the keys. That's where this idea of withholding is in place. And that's where the complication in terms of recording will also be in place as well, because they're becomes confusion in terms of who's paying the payroll tax, who's actually getting a tax imposed on them. Is that the employee or the employer and who is responsible for pain, that taxes and whose pocket of those taxes coming out of it's a little bit confusing when the employer is the one that's taking the payroll taxes for the government out of the employee taxes and then paying them theoretically for, ah, the employees? When we get to the journal entries and recording journal entries, we'll see how that kind of muddies the water. And so anywhere that is the case of state taxes, they're gonna be similar that we have. These types of with holdings will have the similar responsibility that responsibility being on the company, any location where we're at were that is the case that responsibilities on the company to basically make sure that payroll taxes are withheld will have similar type of issues with regard to recording payroll and making those with holdings. We then had a lot of laws of the 19 thirties that that dealt with payroll or payroll related issues and including faker of 1935. And that's gonna be the federal Insurance Contributions Act. We'll talk more about faker because it's gonna be a major component in terms of taxes and payroll taxes. We've got the Fair Labor Standards Act of 1938. We've got Futa and Suta, federal employment tax and state unemployment. Now, the federal unemployment in state unemployment again are going to be things that the employer are gonna have to withhold. And so we'll deal with those when we do our calculation, note that we are including the state unemployment here, and we don't typically do that. You might be saying, Well, you know, we're not gonna do with each individual state or each location were usually dealing with the federal side, and then we can apply these principles as they relate to word of her location. We're in whether whatever state we're in, whatever country we're in in this case were including the state taxes because the Fed did something kind of sneaky here. They basically in some ways when they put in this law pretty much mandated that the states have to have some law by making the food tow law dependent on the state law on and therefore the state laws are often pretty standardized because of that. So this is one area where we could have difference in SUTA. But we're going to touch on the state law better. We also have the Fair Labor Standards Act of 1938 again, another law that was created in the Depression. So we know that a lot of a lot of legislation was created in the 19 thirties when we had a depression, and that would stimulate a lot of activity. Of course, in terms of trying to do something Teoh to make this circumstances in situations of people better. So we have the Fair Labor Standards Act, and that's going to include including things related to working conditions, working hours on overtime regulations, things that like break times and having proper types of break times and a minimum wage 7. 20: in this presentation, we will take a look at the federal income tax if I t tax within. QuickBooks, here we are on the home page. We currently have the open windows open. In order to open the open windows, you want to go to the view dropped down and the open windows list were currently in the S corporate pay payroll. Example Problem. The F I T tax also will be driven by payroll items. So we'll take a look at the payroll items. We'll take a look at the set up in the employee and a paycheck to look at the payroll item . We're gonna go to the view, drop down or the lists drop down. We're going to go to the payroll item list payroll item list, and this, once again, are gonna be the payroll items will go through the set up process for these payroll items at a future time. But just note that these items are going to be the things that are going to be used in order to tell QuickBooks how to properly calculate payroll. The payroll item for F. I T. Is one of the major things were paying for for when we pay for payroll within QuickBooks, because the F I T. Is going to be a more complex type calculation. It's being a progressive tax and not just a flat tax, therefore much more difficult to calculate from employee by employee bases. QuickBooks will typically set this up as we go through the interview process. It'll typically set this up as the federal withholding, so it's because it's a federal tax, even though it's complex. It's fairly standardised in that it's in the entire United States, and therefore QuickBooks can standardize it in that format, at least. So if we when we go through the interview process, if we double click on the federal withholding, you can see it's a federal withholding. If we say next it's going to go to the United States Treasury, it's gonna end up having a payroll liability that we're gonna take from the employees, and that's why it's going to go to a liability account. I won't go through. All of these items will go through those when we set up. Then, of course, we got to go to the individual employees and fill out the information so that QuickBooks has the information needed in order to calculate the federal with holdings. And as we look at what what is needed, we'll see why it's needed within QuickBooks. So if we go up top and take a look at the employee center, we're gonna go to the employee center and just take a look at one of our employees. That being Anthony, if we double click on Anthony here, we're going to say, OK, if we go, the essential data that we're going to need is the pay period. We have the number of exemptions, marital status. So if we go to the payroll information, this is where we're typically going to be entering this information. He's an hourly employees overtime. If we go to the taxes up top, that's where we're gonna have the information related to the F I T. That's needed to basically have QuickBooks look up in the related tables, typically to find the correct withholding amount based on the information given that being marital status, number of allowances, this being gotten when we get the new employees typically from the W four, and we'll go through that process and demonstrate the data entry in an example problem. But this is where it's gonna go. We got the Medicare, Social Security, federal unemployment tax. And then we have the state information California allowances as well. California being similar work, focusing here more on the federal side of things. But of course, ST to States will differ depending on the state and will have a similar kind of state withholding. Depending on state. We're gonna be within. So we'll close that back out. And of course, that will change from employees to employees. If I close this back out and we go into our other employees Judy Judy Jones and we take a look at her payroll information still monthly payroll. But if we go up to the taxes up, top allowances air different, the Mericle marital status could differ here as well. So that's where that information goes. Once that's in place, QuickBooks can do. I'm gonna close this back out. The fairly complex calculation of what the f i t should be it again. It's more complex, then just a flat tax of Hey, this is how much you earned. This is gonna be some flat rate of what we're gonna take from you. It's gotta be based on tables based on that information that we're giving it. And therefore we're very thankful for having some system to prevent us from having to look up tables to do that manually, which is not fun. But we'll practice doing it anyway, just to get just to know what we're doing. So let's take a look at paycheck now. If we go to the banking, dropped out and go to use register, and we're gonna open up the checking account. And once again we'll take a look at a paycheck for Anthony. Let's take a look at this one. Just gonna double click on the 12 1 paycheck. And if we go to the paycheck and detail, then we'll see Gross pay calculated here. The federal income tax. The federal with holdings is there. So that's the 1 62 There's no real Reimer reason that we can look at just this and this number very easily to get this number. We can't do a flat calculation as we can, more simply with the Social Security. Some of these other items here, including the 41 case, as we'll discuss later, are going to be involved in the calculations and Therefore, it starts to get quite complex on in terms of this particular tax and more complex than other types of taxes. So again, very nice toe. Have a system to calculate the f i t. Even if we have minimal employees, we're gonna close this back out. Close this back out. Let's take a look at one more for Judy here. If we take a look at Judy's taxes, she makes more money but has less other activity going on in terms of of other benefits. So we have the salaried employees here, and then we've got the federal withholding. Even with his limited amount of information, it's still a bit difficult for us to really get Teoh this number federal with holdings from the data in this set because again, we have to look up tables no matter what in order to do so, whereas the Social Security and the Medicare, if we had to calculate those, wouldn't be as difficult as the f i T. Although it's still possible to do the f i t. We could do it manually in We'll take a look at examples of doing that. Just be aware that if we have more than one employee multiple employees. As we get more employees and more benefits, that type of calculation becomes more tedious than computer helps. Ah, lot, but we want to know what the computer is doing so that we can we can look at it, say it is this reasonable? Is what the computer doing here reasonable. And we have to go back and check and take anti and see if troubleshoot any problems that may arise. 8. 21: In this presentation, we will discuss payroll considerations and forms within QuickBooks. Here we are on the home page. We currently have the open windows open in order to open the open windows. You want to go to the view, drop down and go toothy Open Windows list. There's gonna be different types of options that QuickBooks provides in order to help with the payroll considerations in order to help us with compliance with regard to payroll considerations. As we set up the payroll process within QuickBooks, we will have an interview process. And that interview process will help us to go through the normal kind of set up process. What QuickBooks needs in order to process payroll and note that that's gonna differ from company to company. Of course, we may be processing in terms of how often we process payroll. Did we do it monthly? Do we do it weekly? Do we do it by weekly doing Do it? Sim. I'm semi monthly, and that process can be done as we first set up payroll and that will go through the interview process. One way to get there. It's to go to the employees drop downs, and we want to go to the payroll set up process that will give us our general information. And we can practice that even with a manual payroll with a free payroll within the desktop version and go through that set up process and see how some of these different options can be put into place Really worth doing that. It's worth starting different types of payroll files, putting them in place with different types of payroll settings, especially different settings with regard to offering different types of options and benefits and compensation as well as salary versus hourly. We'll take a look at a few of these options as we go through example, problems through these set up options and setting up different payrolls schedules. Paying monthly, paying weekly pain. Bi weekly, semi monthly note that these will also differ in terms of how much help QuickBooks will give with regard to what payroll we are paying for. There's different levels of payroll will discuss more of the benefits of each payroll level at a later time. But note that payrolls linked in some ways to human resource is out and regulations related to payroll, and so it's nice to have some support in terms of guidance. For that, those regulations and that paid some of the paid versions of payroll as well as outside payroll companies can really be helpful to make sure that we are in compliance with any kind of regulations that are in place with regard to payroll. If we go into the payroll center, this is the paid version of payroll. Then we also have some more information here to help guide us. So we have a quick guides that are useful. We've got the before. Higher guides, the payroll tips and the direct deposit guides, if we were to look at a few of those guides, is the tips. Before you hire tips and it we're talking about employees versus a contractor. Get your employer identification number will discuss a few of these items as we go through our payroll processing here as well. Gather employees paperwork. It'll talk about the guidance for what type of paperwork we need. Post labor law posters. This again It's gonna be Maurin, the compliance side rather than just a processing side. Making sure we're doing some of maybe the more human resource is air, making sure that we have the right compliance within the environment of our workplace. Get workers compensation insurance so you can read through that information closing that back out. If we look at the payroll tips guide, we're gonna have some more information that's useful within QuickBooks, including the set up payroll to set up the payroll schedules creating the paychecks. These they're gonna be hyperlinks that we can go through here. No. All the ways you can make employees checks or pay stubs available and again that has adduced with somewhat with processing payroll, but also with compliance. What do we need to give to the employees in terms of pay stubs when you're hired? New employers ab their information to QuickBooks. When you need to add new paycheck items, either additions or deductions. Set up payroll items will discuss some of these items. As we go through the set up process. We'll have guides to using the set up of employees payroll information. I'm gonna close this one back out similar guides to setting up the direct deposit, and so that's gonna be options in terms of how can we get that direct deposit set up? So this paid versions going to give us some more detail in here about how to set up the process. And some guidance for more of the human resource is side of things. We also have the help within the paid version of actually processing that payroll forms, meaning if you used a manual version. So I'm gonna go over to the file forms section now, and this again is one of the major things that we're paying for within payroll, especially with the federal and the state forms within payroll. So if we get the ah set up within PayPal that we're paying for, they can give us both federal and state very helpful. And the payroll forms within here are gonna be the 9 40 ones, the 9 40 year in the W twos and W threes. If we can get everything properly set up in terms of the interview process, the items that are set up within payroll process the papal properly. Then QuickBooks can generate these forms for us that 9 40 once the 9 48 the year in the W. Two in the Debbie three, and we could just go in here and basically run this report. If I just double click on it and put the year in here than this is the That's fine. We'll be able to generate this report just like this and be able to see what is happening as we go. And our goal here then from a payroll perspective, is to be able to look at these numbers and say, Are these numbers reasonable? Is QuickBooks doing what we would expect it to do? Within reason? We don't need to know everything about it, but we need to know within reason, to see if something is way out of whack so that we could go in and see if it is how to troubleshoot a problem such as that. And we'll talk a little bit more how to do that As we go through the payroll process, it will be easier for us to do that. So note that payroll, if we have the pay payroll version, will allow us to go through and set up these forms and do a lot of this automatically with an automated process. However, we still need to know what is happening through that automated process so that we can troubleshoot any problems within it and also so for working outside of payroll. If we just have a question from our employees or for working with 1/3 party vendor, we have some idea of what this is going to do in terms of our financial statements and how we can troubleshoot any problems within the payroll set up, of course, pair. 9. 22 Payroll Periods and Time Frames: In this presentation, we will discuss payroll periods and time frames. When we consider payroll, we're gonna have different types of time friends, different times of times that people will be paid given different companies. So in other words, it's up to us to make the choice as to how often we pay our employees when art the employees going to be paid. This is a decision where once made, we then just apply the same principle. We're gonna be consistent with that one principle, whatever that pay period is. If we work within a particular company, then we're just gonna get used to the payroll cycle once implemented and work with it. If we work as a Pedro professional, however, then we may we working with different companies, and they may have different needs and maybe implementing different types of payroll periods . So it's important to understand payroll periods in general. So when we go from different types of payroll applications, different types of companies, we know that they're gonna have different types of payroll periods. And once we do work into the company, we will then of course, specialize in some way, knowing that the system that we are working in, so one would be to be paid monthly. So if we're paid monthly, and then we're gonna have every month of a payment and there's gonna be a 12 pay periods because, of course, there's 12 months. So monthly is gonna be an easier pay rates because there's, like, 12 pay periods. We can break it up fairly, fairly easily. However, most of the time employees would like to get paid more often than monthly, often times so we could have weekly, which is kind of the other extreme. And weekly is gonna be, of course, every week. And that would mean that there's gonna B 52 pay periods because there's 52 weeks in the year. Note that that number is unlike the months of 12 a number that possibly not everybody knows offhand. How many weeks air in the year, something for payroll probably worth memorizing. So how many weeks are in the year? 52 generally, and then we have the other two, which are usually the more confusing because oftentimes we get paid every other week, um, or so or bi weekly. So bi weekly means that we're gonna paid every other week. And so that's gonna be 26 pay periods. So you might say 26. That looks a little funny. Like where does that number come from? 26 pay periods. If we paid because you would think possibly that it would be 12 times to which would be 24 pay periods, because there's 12 months in the year. And, um, we're pain. Um, you would you would think about twice a month, right? So be about 24 but it's not. It's 26 that number comes from saying 52 weeks in a year divided by two. So 26. So what you really want to do is memorize these two or the way I do it. I memorized these two. And then when I get to bi weekly at say, Well, what what does that mean? That's in essence, gonna take the weekly amount and divided by two to get to the 26. Whereas if I pay semi monthly, you can think of something like on the 15th or the 30th and 31st so I pay in the middle of the month and the end of the month. In other words, then that's slightly different, then pain bi weekly. That means you're being paid twice a month, no matter what, which is gonna be 24 pay periods. So when we pay in other words, bi weekly every other week because there's different amounts of days in each month, then we could have some months that have three pay periods, possibly and that that would line up to having two more pay periods within the year, whereas semi monthly, we have a significant amount, really of less paper. So if we paid two times a month, no matter what in the middle of the month in the end of the month, then I would think of that as really two times a month is, of course, going to be 12 times two or 24. So the way I would remember this is, you know, monthly is, of course, 12 pay periods, and this is the important, by the way, because we will be using these paper. It's when we start to calculate things like hourly rate and payroll rates. So So I would think of this as monthly. Of course. Is 12 months pretty straightforward? No problem. Weekly. We have to start to memorize that there's 52 weeks in a year, 52 pay periods. If we pay weekly bi weekly, then means we're paying every other week. It doesn't necessarily mean we're paying twice a month. What it means is that we're taking the 52 divided by two to get to the 26 pay periods, whereas if we pay semi monthly, then we're paying two times a month, no matter what. So that means we're gonna take the 12 months Times two gives us the 24. So just this is where the problem usually lies. Are we doing bi weekly, semi monthly? They're not the same, just ah, and I would use the monthly and weekly as as the check to memorize the two numbers. I don't memorise thes two numbers, I say. Semi monthly is monthly times to I se bi weekly is 52 weeks divided by two. So once we have that some key numbers that you really want to memorize, then as we go through payroll, it's just numbers that you should kind of have in mind is one. There's 365 days in a year. Now again, note that you know there's a leap year and whatnot, but we're gonna go with 65 days in a year, and that's different than some of the rounding we've used in in. Like if we do some type of calculations for interest types of calculations, we may use some estimates. In other words, sometimes there's estimates that we could say 12 months times about 30 days in a month. Even it was 31. There's there's could be 30. There could be 28 but that would be about 3 60 But to be exact, to be more exact, there's 3 65 generally in a year, so we just want to know when doing payroll. We need to be more exact. So we typically would say We don't want to just know that number 3 65 days in a year. Bi weekly pay periods. 26 Again, We don't really need to just memorize that. We could take the 52 divided by two to get to the 26 ah weeks in a year should be weeks in weekend, eight weeks in here. It's gonna be 52 that's when you just want to memorize, so you just want you. Just gotta know that 52 weeks in a year might not be as common for for a lot of people to know how many weeks or in a year, but 50 to 52 weeks in here and in the semi monthly pay period is 24 again. I wouldn't just memorize that, but you need to be aware of that number. It's a payroll number. You gotta know semi monthly again. How would I get there? 12 months times to bi weekly 52 weeks, divided by two semi monthly, 12 months. Times 2 26 vs 24. 10. 22: in this presentation, we will take a look at the payroll periods set up within QuickBooks. We are on the home page. We currently have the open windows open. In order to open the open windows, you go to the View, drop down and select the open Windows list when considering the payroll periods. If we're working in one company and we've been processing payroll within that company for some time, we'll have the payroll period already set up. We'll have an idea of what we pay people this so often Every two weeks we pay people. But just note, when we set up a new employees and as we set up the payroll process in general and or if we move to a different company or something like that, then the payrolls will differ stuff if we work within payroll. If we work with multiple different companies, then we might have different payroll periods. We want to make sure that as we set up the process, we are setting up the correct payroll period. The way that's going to be done within QuickBooks is when we set up the payroll, interfere, we're gonna go to employees and we go to the payroll set up process. And as we do so, we will be selecting the pay periods that we will be having within the process that we paid monthly, weekly, biweekly, semi monthly within the payroll periods. Important to set that up so that we get the correct calculations of things like the federal income tax that QuickBooks will need in order to do those calculations. We can also see it by the employees. If we go to the employees dropped down and the employees center, we can pick an employee and see where the pay periods will be. So if we go into Anthony More, for example, our employees and we go into the payroll information tab, we can see here the pay frequency being monthly. That is where it could change. And we have the pay frequencies that we are most familiar with. Not too many people pay that the daily but weekly is pretty common. Bi weekly, semi monthly, monthly, less common, probably quarterly. Your employees probably want to be paid more than quarterly or annually, but they might be uses for those. And so here are those payroll options within each of the employees, it is possible to have different employees with different payrolls schedules within QuickBooks as well, meaning you could have a monthly payroll in this option. The next employees have some other payroll pops, possibly paying quarterly for another employee. For whatever reason, this payroll frequency is gonna be really necessary when we do the f i t withholding. So when we calculate the payroll, even if we have an hourly payroll and we put the correct hours in there, we're still going to need the pay periods. And make sure that the F I T federal income tax is gonna pick it up the right information from the right tables and one of the components to do so. Is the pay periods being correct in order for the federal income tax to be calculated within QuickBooks correctly? 11. 23 New Employee Tax Forms & Contractor vs Employee: In this presentation, we will take a look at new employees, tax forms and the concept of a contractor versus an employee relationship. Whenever we have a new employee, that tax form typically that needs to be filled out by that employees will be a W four. The W four form looks like a straight Ford form. It is a straightforward form, but it is a bit more complex. It's very important win. Recording the information for the employees to get the proper withholding is also a form that the payroll department within a company can't really give as much guidance with as, ah ah, lot of employees would hope, because the payroll department can't typically give tax advice. So even though the employer, in other words, is required to withhold the employee taxes for federal income taxes, they're not able t give the kind of advice that ah would be considered tax advice because the reporting of the income taxes in terms of the 10 40 is really the responsibility of the employees. So, in other words, the reporting of the W four is going to deal with exemption amounts and how much is going to be withheld from an employee paychecks for federal income tax, their federal income tax and then the employees. That means it's gonna be related. Teoh the tax filing at the end of the year by the employees using the form 10 40. So they w four the with holdings and your reporting of the 10. 40 our employees reporting out the 10. 40 at the end of the year are gonna have a relationship to each other. We also have some other important data from the W four. So whenever considering the W four when entering data into our payroll system that w Form four is often the form that we're gonna use it if we're gonna enter data into our database system about a new employee, weaken typically get a lot of that information from the W four. Now that W four is a I arrest former federal form. You're going to get it. If you could find this copy to get a current iris W four form from iris dot gov type in W four, you could find current copy of W four form as well as instructions for the W four form and see how it all fits together and how it's gonna be worked out. Note. I also didn't include the worksheet that it will typically be here. That will help with the calculation for how many exemptions we have. So I'll talk about that more in a bit. This is just gonna be the reporting form. So the W four when we're entering data for a new employee This, of course, has the first name and middle initial. That last name is gonna have this Social Security number, which we're gonna need to put into our database system. It's gonna have the full address which we're gonna need to put into our system. It's gonna have the marital status. And again you might be thinkable. Why do I have a marital status and that is gonna feed into the calculation for the federal income taxes? You'll note that when you filed your form 10 40 which again is related to this form that you have to you have to say whether you're married or single or head of household or widowed. And that's in. The reason for that, of course, is that there's different tax rates. And so when we do that with holdings because of that complication we have Teoh, we have to know the marital status so it could be single, married or married, but without a higher sink, but without a higher single rate. And so this is gonna be the The reason for this third option is the fact that when we combine incomes together, um, it can confuse things, of course. So if we only had one employee making income, then that's usually what the tax system was first designed to do, meaning most houses used to be single income houses. And therefore, if you worked for a company anywhere the only wage earner for that company, then we could pretty accurately calculate your with holdings based on whether you're single or married. Ah, and then be it. But when you have multiple different types of of of wages that that are going into the TV home as well with different sources of income, then that really complicates the matter in terms of what the withholdings should be. So long story short, if we if we select the married but with a higher single rate, were basically saying, Yeah, we're married, but we want you to withhold at the higher single rate because If we were single, we would be paying a higher tax rate than if married, because we typically have double income if married and therefore lower rates. Why would we do that? Because the higher the with holdings we have the lower you know, the more likely we'll get a refund at the end of the or the more payment will be making towards the 10 40. And if we have someone else that is working within the household, another spouse working within the household, then we may have higher rates that we need to be calculating at because our income combined will be at a higher rate. So and then and then, of course we have. If your last name differs, then we have the total number of allowances that were claiming. Now this has a kind of a loose relationship to the number of exemptions your recording on the um on the 10 40 meaning if we're single, we have at least ourselves as an exemption. If we are married, we have ourselves in our spouse as an exemption for a married filing joint. If we are having dependence Children, for example, types of dependence and we would have ourselves, our our spouse and our child or Children as exemptions. Now, the allowances are not exactly the same as exemptions. Those are gonna be part of the calculation. And this would be the information if we looked at the at the more comprehensive tax of calculation for the W four to try to come up with. Ah, this this number number five, will take into consideration these exemptions in this calculation. But just note, there's a relationship there. Why are we doing this? Why do we need this? Because we're trying to figure out based on the complex individual tax system what the with holdings will be so that usually we want the withholdings to just barely b'more than what the tax obligation would be meaning? You know, the tax system is designed to hopefully try to make the employer take from the employees a little bit more than they're gonna actually Oh, for income taxes, which they will then realize once they do their income taxes with the 10. 40 at the end of the year, and therefore they're going to get a refund. Why would it be set up that way? Because then the government is most likely to get paid the government's most likely to get paid by the employer doing the calculation, withholding the proper amount, withholding a little bit more than is actually going to be owed. And therefore, at the end of the time period, the iris will give the difference back. They'd rather give the difference back then, have the employees owing money at the end of the year knowing that it's much harder to collect for the I. R s if they if the individual owes money at the end of the year and the iris would also have the money sooner rather than later. So for those couple of reasons that the system is designed for that format, so they're related and this is gonna be the the line that will help us to get those exemptions Now we also have this this line additional amount. If any you want with help from the paycheck, why would you want an additional with help from the paycheck? That's gonna be less income or less paycheck. And the reason is that that's basically saying, Hey, you know, if we do a tax estimate with our tax professional, um, they we might just come up with a number and say I want to ADM. Or why? Because possibly we have other income sources and that's gonna push us into a higher tax bracket and therefore are with holdings from this W four will not be sufficient to pay for our taxes. Or, um, we have a spouse which would be part of our other income, who has substantial income and therefore pushing us into a higher tax bracket and therefore the with holdings from this calculation will not be sufficient. We would need to increase it, and then we have seven. I claim exemption from withholding for 2008 and I certify that I meet both of following conditions So we could try to say, You know what? I don't I don't need withholding. You don't need to withhold from me. And you have to basically tell the employer importer having the responsibility to withhold needs to needs to have a reason not to withhold. And that would be last year I had a had a right to a refund for all federal income taxes withheld because I had no tax liability. So you're basically saying, hey, last year, you know I didn't haven't have any taxes. So and the iris is going to say, Well, if that's a condition, your taxes are probably pretty low. And maybe you don't have a responsibility to pay. If you're under a certain threshold, then you probably won't have any taxes because you won't be over the, um, the standard deduction. And if you weren't over last year than maybe you won't be this year so and the other this year, I expect a refund for all federal income taxes withheld because I expect to have no tax liability. So again, if your if your taxes that if your income is under a certain a certain level under, like under the standard deduction, then you're not gonna have any taxes typically. And you could basically claim that you could say, OK, I don't have any withholding under that specific scenario. And then, of course, we need the first date of employment and the employer identification number, as we need on every type of payroll tax form and the 1/4 name and address. So then we have this concept between the employee and a contractor, and this is a huge kind of concept because there's pros and cons to having a contractor relationship to an employee employer relationship. Eso if we If we're trying to find work, we need someone to do something for us, and we're trying to hire out someone to do someone for us are our choices are to hire them as an employee or hire them as a contractor. Now, at one point in time, this relationship might. That might have been more kind of foggy than it is now. At least from a legal standpoint. From reporting standpoint, we want to have a very definite line. Prior to this, we might have hired someone and said, Hey, we're gonna pay you so much at the end of the week and it is what it is. You know, I don't care what we call you if your employer employee or a contractor. But now that, of course, as an employee that the employer, the company employer, hasn't responsibilities to do things such as withhold and other responsibilities in terms of legal responsibilities over and four their employees more responsibilities than they would have over, say, a contractor, a contractor who basically is running their own business. So if someone that contractor. You're just paying them whatever they invoice you, in essence, whereas if they're an employee, then you have more legal responsibility. You have to withhold. You gotta report all of all the reporting. So, of course, one of the disadvantages when making this determination as to whether an employee of employee or a contractor. We also have businesses that might want to lean towards contractors sometimes because that would mean that they're not responsible for many of the legal responsibilities, such as reporting, withholding and a lot of the other type of requirements paying payroll taxes in some of that stuff that viewed so it could cut costs. Now the advantages of being an employee is, of course, you have a bit more control over, Ah, the behavior of the of the employees, and you're able to take care of more. In some cases, you're able to provide them with benefits. Some like 41 K plan, which could entice better people to to work there. So there's gonna be kind of like the pros and cons assume pros and cons between contractor and employed now went from the IRS standpoint. From a regulatory standpoint, uh, they're gonna have their own kind of, ah, critiques of of whether your contract or not, one more point before we go into those. Ah, if if you're an employee, obviously you get your income reported as a w two income telling the iris that you made money as a contractor, you get your income reported typically as a 10 99 if certain conditions are met. Meaning you're not like the contractor isn't. And employees. I mean, the contractor isn't a company and typically earns over a certain dollar amount, which is fairly low, like 5 to $600.600 or so dollars. Then you have to 10 99. And remember what 10 99 is to The contractor is similar to Adobe to your basically telling the contractor. Look, I paid you this amount this year, and I'm reporting to the ire s and therefore you Really? Yeah. I mean, you really ought have reported in some way on your form. 10 40. If you don't, you'll probably be notified by the IRS. Now the problem with a 10 99 again if there's no with holdings Theo Employers not responsible for with holdings. And also when you're a contractor. You may have job related expenses because you're your own business that are not going to be included on the 10 99. They're going to be something you have to deduct on the 10 40 in somewhere in the schedule C. So there's more responsibility if you're a 10 99. If you're a sole proprietor, if your contractor to report your own income to report your expenses on and make sure you get all that taken care of now, from the Iressa standpoint, they're kind of weary of, ah, of an employer reporting someone as a contractor rather than a um rather than an employee. I mean, from a From a regulatory standpoint, you may rather have someone reported as an employee from an IRA standpoint, because then you can hold the bigger, larger employer, the bigger company most likely responsible for collecting taxes from the contractor. So at, rather than having the smaller contract of a smaller business probably the sole proprietor responsible for reporting on the income and paying their own taxes, they probably rather and the larger company that they can put more restrictions on two be required to withhold the taxes. Therefore, they want toe. They probably are gonna lean towards the idea that if someone's an employee, if we want to make sure they're reported as an employee, So what does it mean to be an employee? It comes down Teoh. There's a bunch of different tests that you can you can have. But the more control the employer has over the employees work the behavioral control, financial control and the relationship between the party. If there's more control on the employer than you would typically say, Hey, that's more of a wage relationship, meaning If you had someone like a secretary that would, or an office worker that was going in every day and told, This is what you need to do. I need I need this done and had that done. It's 9 to 5 job. You need to be here from 95 what not then that's a pretty high level of control. It would be pretty difficult to say if someone's working a 9 to 5 job in a specific defined location and their jobs were being dictated on a daily bases, then pretty much unemployed be pretty difficult to argue that that one is that someone's a contractor. If, on the other hand, we had someone that you know needed to do a specific job, like paint the house or something like that or paint the office, then that would be more likely. That would say, Hey, this is the job we need done You know, you have your own tool, you know, And it would be the contractor's responsibility. Bring their own tools, you know, decide how to get the job done, work out the dates that will get the job done and in the goal there being in goal, they're getting the place painted. Now. Those are two pretty, pretty stark differences between a contractor and a ah, an employee. And there's a lot of gray area as to when someone is a contractor in an employee and different industries that could be industry specific. So there could be a lot of areas where there's debate as to whether we should be a contractor or an employee, and it's important t make sure to go over those rules. So, um, we don't get in trouble on on Ah, on on that. We don't want toe wouldn't want the IRS to come back and say that someone is reported as a contractor and they should have been an employee and then say that we need to report, you know, Social Security, Medicare. So it's really it's really important kind of distinction. The distinction between whether someone is an employee or a contractor. The employees have much more responsibility for reporting by the employer. The contractor still some responsibility to report the income given given in certain conditions but less responsibility in terms of many other types of regulations, including the conflict of withholding the taxes for the contractor. 12. 23: In this presentation, we will take a look at where to set up a new employees within the QuickBooks. We are on the home page. We currently have the open windows open in orderto open the open windows, you go to the view drop down. It's like the open Windows list. Once we have the new employees and the W for information, then we're gonna add those new employees, and one place to go to do that is the employees Center Employees Drop Down Employees center within the employee center. We're gonna have the employees tab first tab, employees Tab. We got our two current employees here. If you were to add an employee, we would just select this new employees item. So typically all we need. We need to have the payroll to be set up already. So the payroll to be set up. We would have to do so by purchasing the payroll and or setting up the manual payroll. Then going through the interview process, which is in the employee section, set up payroll payroll set up once that is up and running. If we don't have all the employees in there at that time, or if we add new employees at a later time, then we can go to this employee center, say new employees as we dio. I'm just gonna open up one of the current screens that we currently have filled out. We'll open up, Anthony. We have the information, most of which we're going to get from the W four. So if we have the W four in hand, we can get most of this information populated from it, including, of course, the name. And then they contact the Social Security number. The gender we typically would need the date of birth and the marital status for processing and continuing to process through some of the other stuff in these screens will not be mandatory. In order to process payroll, some will be mandatory in order to process payroll. QuickBooks is, of course, using the screens both in terms of processing payroll to make sure that we have all the mandatory information and to help store data for our employees. Therefore, we're gonna have some screens that maybe there just to store added information, a nice place to put that added information about our employees and for those things that are gonna be necessary in order to process payroll. And in the address tab, we're gonna need the address that is going to be mandatory because we need to put that on the W two for the employees and the one we send to the IRS for the W to that we're going to send in. And then we have the contact information, which may not be as necessary, however, nice to have in one spot. So if we need it, we can coat to it, know where to find it within QuickBooks. And then we have the additional information. We got the payroll information. This, of course, is the information that's gonna be set up for payroll. Many of these actions are going to be driven by us. Setting up payroll items will go through that in the example problem. But once these air set up and these are gonna be in the lists and we set up the payroll items, then we can set up things like the hourly, the overtime in any other payroll items we have, including benefits garnish mints that we could have for the employees on this side. Then we're going to set up the information for the with holdings. That's going to be in the tax item here. So we'd go into taxes this again. Information from the W four were on the federal tab. We need to have the marital status, and we need to have the number of allowances from the W four. This is important. We're not prying here. We need to have that information, like, Why would we need to know their marital status or how many exemptions they have? What business is it of ours if we need them, just as employees? Possibly some people might think, I don't know. But we need it in order to calculate the federal income tax because that's just the way the federal income taxes set up. They set it up based on tables than those tables are based on marital status, because that's gonna change the calculation for F I. T. In the federal income taxes at the end of the year. So we need the allowances in the federal income tax, and then the state information will be here as well. And that'll differ, of course, from state to state, having QuickBooks help us through those differences from state to state. Very nice very useful closing this back out. Ah, that we can also, of course, set up the direct deposit here and the sick and vacation pay from this information as well . They would go to the employee information. We've got the date higher, which is gonna be mandatory. So we're gonna have to have We should have the date higher original hire date, adjusted service, state release date. So if there was a release date, last date of payroll and then we have the employment details. Employment type. If it's regular officer, um, statutory or owner, we can say what type of employees we have here full time or part time. We have the exempt. Ah, we're nonexempt. And we'll discuss more of what those terms mean. Exempted. Nonexempt. And then we have the key employees. Yes or no Job titles here. Supervisor department description. Again. A lot of this detail, maybe more than is necessary for a simple type of payroll set up, but could be good informational set up in good to organize our employees into categories, especially if the company gets larger and more complex leave of absence. We've got the details and dates the leaving out of options and the terminations. So last day work last day. Benefits Really State termination details, termination type, termination reason. And again, this is good information for us to process and make sure that we have the detail for the termination because any kind of termination of employee is something that could be subject to problems down the line. We want to make sure if there's any kind of issues that we've logged in and documented our information related to them, then we have the worker's comp information. This could vary from state to state for workers. COMP SEQUANA RESEARCH What kind of workers comp she might be liable for or responsible for as the employees, depending on the location of the company. It's not a federal information, so we're not really concentrating on the workers cop at this time. But just be aware that from location, location, type of job to type of job, we want to know and be aware of workers comp responsibilities for them. So again, much of this information can be filled in and process through through the form through the use of form w 44 a new employees 13. 25 Federal Income Tax FIT Percent Method: In this presentation, we will calculate federal income tax F i t using the percentage method. We currently have our payroll register here where we're focusing in on Pam, who's the bigger earner here and therefore the one that's gonna need to be calculated with the percentage method rather than just using the tables. She's gonna be married. Four allowances. She's got a salary pay, which is going to be this 6 3053 Its's a weekly pay. And that, of course, will be the total earnings are focused. Then here is on the f i t. Calculation. So we're looking for the F i t. Calculation. Therefore, we're gonna need to know what the F I T wages are, which could differ from this total wages. This is what she's getting paid will typically really reduced by those types of things that could be reduced in, say, are 10 40 adjusted gross income, things like a cafeteria plan or a retirement plan like a four, a one cave. So if we say here that the cafeteria retirement plan are these numbers, then we can say that her total earnings are going to be or the F I t earnings are gonna be this 6 3053 You sort of say 3653.85 minus. And then we have the cafeteria and retirement plan of 280 minus 1 85 and that will give us the 3000 won 88 85. That's 3000 won 88 85 that we're gonna basically be using here. We're focusing in on this on this number on Pam's wages, because that's the one we're gonna be focused in on for the f i t. So here we are at the circular e the circular ikan be found on iris dot gov the iris website. I rest stock of the circular e To get the most current tables, we need to go down to the tables to calculate the payroll withholdings. These are not gonna be the normal just tables that we can look up. They're gonna be the percentage calculations typically used if the wages are too high. For example, if we went and found this number in the tables, we'd say all the tables aren't big enough to find that number, and therefore typically, that's when we would have to go to this method. The percentage method, in essence, calculating what the wages are gonna be Now, this is an important method to do it. It's useful to do because we get a better understanding of what the progressive tax system is, what these tears doing? How complex is it to calculate these taxes and why is it that format? So to do this first, we gotta look at the table in the circular e to see what the allowance is. So if we need to know what pay period were using, we're currently in weekly, and then we're gonna say, OK, that's 779. 80 is how many money per allowance that we get. So 79 80. Once we have that, we can then take our federal income tax pay. This is how much we started with from our table. That's how much we earn after the retirement plan and cafeteria. Then we're going to calculate the allowances, which is gonna be the 79 80 that we just looked at times the number of allowances which for her is four, which is going to give us 79 80 times four or 319 and 20 cents. Then we're gonna take the F I T wages minus the 3 1920 for the allowances to give us this 8 2069 65 This, then, is the number we're gonna use for our percentage tables. So now we're back to the circular Eem, and we're still in the percentage areas. This isn't like the tables where we would just look up the number, noticed what we're gonna have our our calculations will have to dio We've got to find the right bracket that this is in, and then we'll have to calculate the top tier and add it to the tier below. So let's see if we can kind of break this down and why this happens. This is closer to us actually having to calculate what the taxes on a progressive system. And remember, It doesn't mean if we're say in this tax bracket that all of our money is taxed at 22%. It means that some of its tax of 10% some of its tax that 12% some of its tax at 22. So it's just it's the top portion that's taxed at 22%. So we need to go through this whole thing and say, Well, this much is taxed at 10% and this much is tax zero. This much is taxed at 12. And to do that we can short cut it a little bit by saying, for example, we are in this bracket and that's gonna be between 1007 11 and one and 3 3095 That's the number were using because this falls in between there. And so we can basically say that this number up to the bottom level of 1007 11 has already been calculated. We can calculate that on the table table can give us that because that's a set point in time. It knows exactly where that is. It can't give us the number of tax at the highest bracket because it's somewhere between here. So we'll have to figure out what that is, because it's we don't the table don because he doesn't know exactly what that how much is gonna be taxed at 22%. But it knows exactly how much is taxed at 10%. How much is taxed at 12% so we can take that floor number and the table can just give us this 1 71 36 which is, in essence, the amount tax that either 0 10 or 12%. So we have we have that. And then we just need to figure out how much is gonna be taxed at the 22%. To do that, we're gonna take our number 8 2069 minus the floor number. Typically the bottom number which they give us over here, excess over 11 1711. The difference then will be taxed at the 22% the highest tax bracket. And then we add to it the 1 71 36 which is the table already calculating the tax on the 1007 11 the floor, which is the 10% and 12% brackets that we don't need to recalculate because the table can give us those. So it looks basically like this. We've got the federal income tax here, and then this. This is our tax are taxable wages. And then we've got the lower limit on the table. This number, this number and that will give us the amount to be taxed at the highest bracket. So we subtract these out. That's the amount of the highest rate, which is 22%. So the amount tax of the highest rates times 22 gives us $254.90. Then we add to it the 1 71 given to us by the table, which is in essence, the tax on the lower portion. And if we add those together, we get for 26 24 26 26 which is gonna be our withholding amount. So this is basically the full break out that will take from the table. It's nice to have a format like this. You can kind of, ah, think through it. If if you do it a few times, if you have some of these calculations and you and you set the table up, then you can go through and just fill out the format of the calculation and fill out what's the appropriate amount? What's the appropriate table that you're looking at? Just make sure you're picking up the correct table ours with for weekly. If you're bi weekly, Semi ah weekly or semi monthly, uh, or monthly another table and make sure we're picking up the single versus the married side of it. So then we can basically use all that in order to fill out our number here in our f i t federal income tax withholdings. 14. 30 Federal Income Contributions Act (FICA): In this presentation, we will discuss the Federal Income Contributions Act. Or pica, if I was gonna be a big component and something that we will return Teoh when we do the payroll calculations and the recording of the A Role journal entries that does another law that happened in the 19 thirties, during the Great Depression, and we had a lot of legislation aimed at making things better or, ah, lot of different aims. But in this case, we've got the Social Security Act and the Social Security Act or the Federal Income Contribution Act. Otherwise, no one asked Pica, can also be confusing because it really has two major components to it. So when we think of Fike, we're thinking of the one component old age Survivors and Disabilities Insurance, or O A. S. D. I. And Medicare. So keep that in mind whenever you see the term Fike out. Ah, lot of times people will apply it to one or the other. Typically Teoh social security of their old age survivor survivors and disabilities insurance. But it really is comprising of both of these components. Both of these components fall under the subcategory law of fickle, which is the Federal Income Contributions Act or otherwise known as Social Security Act of 1935. Fike is gonna be really interesting for multiple different reasons. One. It's gonna be part of our payroll process, major part that will have to be putting in for payroll taxes. Two. It's a big part of the government spending, and so it's gonna be interesting from just a political standpoint will always be talking about fi ca and the fight that type of payments we may be wondering, Well, how is that the case when we're gonna stay, that the employers paying it or the employees paying it will discuss more about how that payment process works? But it's important to note from a political standpoint that the money is going to the government and it's gonna be paid out at some point. And that pain out process is a big part of government spending. It's also really interesting because, really, the thought process of what the especially the old age survivors and disabilities insurance is has tended to change over time, meaning When it was first in put in the place into 19 thirties, we had more of a safety net type of idea of what this would be meaning we have. Some people that were living might live past their life expectancy. And when that is the case, it's very difficult for an individual possibly to find employment at that point in time. I mean, if your life, if you expect not to live past Ah and in that time, somewhere around the sixties, if you're probably not gonna go past 65 then because people typically don't live much longer than that, then it would be very difficult if you didn't plan for that expectancy to live past a normal life than to go back to work at that point in time. So it leaves people in a very, ah vulnerable type of position at that point. And therefore there was a safety net the idea of a safety net program which would be set up in order to provide for those individuals, Um, later. And now, of course, as people have started to live longer, it's almost converting a bit to be thought of as more of a type of retirement type of ah retirement type of plan to kind of supplement income in retirement years. So there's a really a bit of a debate. Just from a political standpoint, terms of what we want fight gonna be, is it? Is it a safety net that's helping people after the point in time that that the expected life would be a safety net? Or is it's going to be some form of retirement plan that's required in a federal type of retirement plan. How that's gonna work from a payroll standpoint is that we typically have, um, they kind of like a matching like you might think of some 41 K type plans. But the the employer is gonna be forced to put in part of the taxes based on the employee wages, and the employees will have Teoh withhold as well. So when we talk about the cycle, taxes were talking about taxes that are both employer taxes and employee taxes. And that really is where things get confusing from the standpoint of recording the journal entry. Because the employer, as we noted from the the Constitution, made a change where, of course, the court, the employer is required to withhold taxes that the employee pays, so in this case, the employers withholding taxes from the employees, and they're having to pay taxes above that as well for this employee tax for the payroll tax. And then, of course, at the end of um so what they're gonna do, of course, is there gonna take that they're going to give it to the government, which should put it into a separate fund and not not dip into that fund. And then payments will happen at the at the point in time at the end of ah, persons towards the end of persons life at some age retirement age, which could be extended by law around 65. And then they will receive payments and payments that were well received back will be based in part on how much they put into the Social Security or Old Age Survivors and Disabilities Insurance Fund. Meaning there They had money taken out of their account into and put into a, um, a fund. And then, of course, they're going to get paid back. Now notes that what's not the case here is it's not the case where the government is holding on and has this money available and waiting is investing. It kind of like a 41 k plan in order to wait for retirement to pay it back out. What's really happening is the current funds going in are paying of the current retirees going out. So it's not. It's not a system where they were paying it in there, holding onto it, and then they're gonna pay it back out. At the end of our retirement ages, we might think of like a normal kind of 41 K plan. It's more the case where, um, the current generation is paying into Social Security, which is being paid out. Teoh, the current group of of retirees. And that's just the way it was set up. That's the way it was planned for. But when there's differences, of course, in the population, then those differences can cause shortages or over urges within the fund. So that's gonna be an interesting topic. We will focus here on what's the law for the With holdings. How do we make the with holdings Haddaway recorded with holdings how to re report the withholdings? Teoh our employees, the Medicare portion is gonna be is still somewhat of a safety net program. It's gonna be some. It's gonna be similar in the format in that the employer and the employee are going to both be pain it, so some of it will come out of the paycheck. The employer will take it out of the employee paycheck, and the employer will be responsible for their portion as well that they will then pay in and then at some time later on in life. If people qualify for Medicare, they could get then the Medicare payments. Now the Medicare payments currently are a lot less. Ah, and the percentage is gonna be a lot less that it's gonna be paid in to Medicare, and it's not. Ah, and it is something that, upon receiving benefits from Medicare, there's gonna be some kind of restrictions. You got to qualify basically for Medicare, and therefore it probably still falls into Mom or definite kind of safety net type of program. Whereas Social Security or the old age survivors and disability insurance, I could be thought of by some to be more of a converting more toe like a retirement or something. The supplement income in the later years, rather than just a pure safety net type program 15. 30 Social Security Tax Calculation: in this presentation, we will take a look at the Social Security tax calculation we have here. The payroll register, which we will use to calculate thes Social Security taxes we have are two employees and the marital status, the number of of allowances, the hourly rate and salary. And then we have the regular pay and the overtime pay and then the total earning. So here's the main component we want to focus in on here we have the total earnings we're gonna calculate the O A S D I based on earnings. However, the total earning, which is just gonna be the regular pay plus the OT pay may differ from the O A. S T. I or Social Security wages. Remember to the different names that we can call the O. A. S. T. I or Social Security. It's a fight get tax. But the two factor taxes, Social Security and Medicare. We're focusing in on Social Security, which can also be called the old age Survivors and disability insurance or O a s t I. So when speaking of it, we're probably gonna end up calling it Social Security. Easiest thing to say when abbreviating it we may. I use the O A. S D I four tables as we're doing here. So the point is that we could have a different OSD I wage based on a couple factors. One if someone hit the cap. So if we had someone that hit the cap, then they're osd I wages will differ. And if there's something that's gonna be deductible for always D I calculations such as a cafeteria plan than to it could differ. So if we look at the payroll register, we can't really tell if someone hit the cap. Clearly, this are nowhere near the cap here of 1 28 400 this example. This will go up from year to year, and but this doesn't give us total earnings. This only gives us the earnings for this pay period, so it doesn't really tell us much about whether or not someone has going over the cap. What we got to do then is go to the earnings records so of the earnings records for our two employees, and this gives us the year to date earnings for the total earnings and the OSD I so they could again defer the total earnings could differ from the OSD eye. We can see here that the osd I is close to the cap for the second employee nowhere near the camp for the first employee. So if we do the subtraction problem, if we take the cap of ah 1 28 400 minus 1 25 5 35 we get 8 2065 that we need in order to get up to this cap. So if this 8 2065 then is lower than the actual wages were going to use this number so that we don't go over the cap for OSD I So that means for uh oh yes, d I wages were going to have the five or 6 15 which is going to be the wages here less that the, uh, sorry. The total wages here less the cafeteria plan. So this one there's a cafeteria plan that is bringing this down, which is a health insurance plan of 756.5, minus five or 6.5 or $250. So this difference is just due to that. The second difference, however, is due to the fact that this person hit the cap so we can't go over the 1 28 400 this person hit the cap at that point in time. And therefore we're gonna have ah lesser of Social Security wages than total wages. And going forward, we're gonna have zero Social Security wages and therefore zero Social Security for this particular employee. Then if we do the calculation for Social Security, it looks something like this. We're gonna start off with total here just so we can see, um, the fact that we could use the total and calculate based on this, And then we'll go back and calculate for each individual. And they will give us an idea that this flat tax and how this flat tax works as being opposed Teoh a progressive tax for the federal income tax or F i t. Tax. So we're first going to calculate so security based on this number here. So we're gonna have the 3 3071 50 total wages for all of our employees. All two of them. We're gonna most by that time, 6.2% or 0.62 in the decimal format to give us $209.30 if we do that again for the employer portion. Same calculation 3 3071 50 times that 6.2% gives us the 20903 So note that were, in essence, doing this two times. One for the employees. This coming out of the employees paycheck. Two for the employer that's coming out of the employers checkbook. And if we add those up, really, the total is 4 18 07 between the employer and employee who will be pain when we consider that paid role register. We're gonna be concentrating, of course, on the employee tax to get to the net check. So if we calculate this out again now we're gonna take the individual employees wages and add them up, and we'll get to the same totals down here. But we'll do that in a different format by calculating the Social Security tax for each employee. So five or 6 50 times 6.2% in other words, is 31 40. This 8 2065 times 6.2% gives 177 63 for a total of that 20 9/3. If we do the same thing for an employer portion, then once again the five or 6 50 times the 6.2 gives another 31 40. The 8 2065 times the 6.2% gives the 1 77 63 And if we add those up, we get that 20903 16. 30: in this presentation, we will take a look at the Social Security tax calculations within QuickBooks, here we are on the home page. We currently have the open windows open in order to open the open windows. You want to go to the view, drop downs and the open windows list. We're gonna start off by looking at the lists the payroll items list. So we're gonna stay drop down on the list items. We're gonna look at the payroll item list. This is going to be a list of items that will help us to drive through and calculate the items, including payroll taxes, including the Social Security. Here are our payroll items for Social Security. You'll note that there's two of them. There's a company and an employee. They both have a 6.2%. They have the cap of 1 28 400 men in. If an employee hits that cap of 1 28 400 then they're not gonna be a pain. So Social Security on top of that once these are set up and they're easy to set up because they will be in the standard interview process. As we say, employees and go through the set up process. We will have Social Security set up pretty automatically, it being a federal tax and therefore something that QuickBooks Con's set up without too much added assistance from us, it'll be fairly standardised, and that's nice. Once these two things are set up and we process the payroll, we could take a look at those calculations by going to a paycheck. So let's go to the banking drop down. Let's go to the EU's register and go to the checking account. And if we look at the checking account, let's first take a look at this. First check for Judy Jones on 12 1 Double clicking this item and double clicking the paycheck detail. We see that there's gonna be two sides to the Social Security. We have one here. This is being deducted from the paycheck. So here's the paycheck. Here's the gross pay. Here's being what's deducted, including the Social Security. It's being calculated for us, which is nice. Note that the calculation is pretty straightforward, usually for Social Security, but we can run into problems. For example, here, unlike the federal income tax, we have just the 41 66.67 times the rate the employee rates 0.0 60 or 6.2% and that's going to give us the calculation. So note that if we had to calculate Social Security for the most part for one paycheck, not all that difficult. But as we go through multiple paychecks and as we do get to some items where the paychecks they're gonna going to defer going to become more complex, such as when the cap is reached, or if there's some other things that are gonna affect the Social Security calculations, then it could be more complex. But just note that, in general, the Social Security calculation much easier than the federal withholding calculation. F I t also note that then we have the employees er side, and that's really the most confusing thing. For most people that understand, is this. What is this employee and employer side items and what does that mean? And within QuickBooks, we'll talk more when we work through problems where this will show up on the reports. But just note that if it's over here, that's on the employer side. We're paying over and above the growth pay, whereas this is taken out of the gross pay and therefore it's not being paid over and above what we're actually paying. The employees were just taking it out of what we pay the employees, these air being paid over and above. That's what the matching will be. It will be calculated for us within QuickBooks, and those two payroll items will help us to navigate within QuickBooks, where they should be reported what reports they're going to be used for. If we close this back out and close this back out, we can then see Anthony Moore's paycheck in a double. Click on this item and go to the paycheck detail hourly employees, and you'll notice there's a lot more payroll items here with the matching. We've got the dental. We've got the vision, healthcare group, life insurance and HSCEI account union dues wage garnishment. Now most of those aren't gonna effect the the calculations of the Social Security. But some will, and you'll note that if we if we do take a look at the calculation for Social Security doing the same method 4000 plus 37.5 and then we just that's going to be the total gross pay These two items times 0.62 It's coming out to 250 which is different then what the Social Security calculation is here and so note that it's not. The point is it's not that simple because of some of these other items we have. We'll discuss exactly what those items are and how they're being affected as we go through a payroll problem. But just note that even in the case of Social Security, as we give more benefits to employees, which we would like to do, even that calculation becomes more complex. No matter what it is, it will be matched over here on the employee side, so it should be the same typically for the employer employee employees. Unless there's some kind of law that that makes it different. So which it could always happen. But typically it's gonna be the same. So we're gonna close that back out. And in the one other thing we want to look at is Judy Jones, second paycheck. This is our high earner. If we look at her last paycheck, we can see that she is now hitting the cap so she's over the income cap and again if we take a look at her total wages, which includes the bonus 200,000 plus the 41 66.67 times the rate 0.6 to the Social Security rate. That's way over what is actually being deducted because they she hit the cap. So that's just another area where we've run into problems. And QuickBooks will help greatly to stop us from messing up when we run into problems like that, bite by having that automatic system and knowing when the cap is going to be hit automatically and stopping us from making ah silly air, like continuing to pay the Social Security after the cap has been reached. 17. 40 Medicare Tax Calculation: in this presentation, we will take a look at the calculation for Medicare tax. Here we are, on the payroll register we have are two employees, Bill and Pam. We have over here the regular pay, the overtime pay and in the total earnings. When looking at the calculation for Medicare, we're gonna be looking at the earnings four Medicare, which could differ from the earnings for the total earnings. So remember, when we look at the total earnings, that's, of course, that regular pay and the OT pay when we started calculate the payroll taxes, Then we may have to adjust the earnings. For example, F I t is gonna be reduced, possibly by things like a 41 K plan or retirement plan and a cafeteria plan. The O A. S T. I. Or Social Security is gonna have a cap, which is the major component, as well as possibly being reduced by something like a cafeteria plan. The H I, which is part of fight gown, is going to be different than the O. A. S t i. Or the Medicare will differ from the O a S t I. And in this case, there's no caps That's the major difference between the two types of wages in for the fight kout taxes. So, for the h I wage, we're gonna reduce it just by the cafeteria plan. The difference, then, between the Medicare wages here and the total earnings up here will be the cafeteria plan. So in this example, then the 7 56.5 total earnings minus the five or 6.5 Medicare earnings is 250. That then would be the cafeteria plan here, like the health insurance type plan. So that's gonna be the major difference that could be there between total earnings and the H. I or Medicare earnings. Note that that's different from the O A S t I. Which has this cap, which is a major component of the O. A. S t. I or Social Security. Now we'll do the calculation. We're gonna start with the total here and calculate the total for the employer and employee portions of H. I or Medicare. And then we'll go back and calculate each individual component on and see that they will line up the same way. So first we're gonna take the total If we take the total h I 3009 10 35 times the rate 1.45% or 0.145 We get to $56.70 if we do that for again. For the, uh, the employer portion H I wages times 3.1 point 45 or 450.145 gives the 56 17. Then if we add those two up, we come up with the 1 13 40 So this is the employer and employee portion. We can come up with those same numbers. If we do this by an employee by employee basis, Bill and Pam, Bill and Pam, respectively. So we'll take the five or 6 50 times of 1.545 or 0.145 gives us the $10.97. 3004 03 85 times. The 1.45% gives us 50 to 98 that totals out to the 63 95 then the same thing For the employer portion, the five or 6 50 times the 1.45 gives us the 10 97 again. The 3004 03 85 times one point over for 1.45 gives the 50 to 98 the some of those being the 63 95. 18. 40: in this presentation, we will take a look at Medicare calculations within QuickBooks. Here we are on the home page. We currently have the open windows open. In order to open the open windows, we select thieve you dropped down and the open windows list. We're going to start off by going to the payroll items list by selecting the lists dropped down, and we're going to go to the payroll item list. The payroll item list. These are the payroll items that are gonna help QuickBooks to know how to make the calculations for the various items within payroll, as well as to know how to record them in terms of reports and financial statements. We are now here on the Medicare. The other portion of the fight get taxes, and it's similar in some ways to Social Security and that we have a company portion and an employee portion little bit complex. In that regard, however, it is a federal tax and therefore somewhat standardized. QuickBooks will step this up as we set up the interview process in a fairly systematic way . In other words, as we go through the employees and payroll set up process, it will then set up these payroll items for us. We don't need to do too much. Adjustments will go through that set up process in a later presentation. We have the rates here at 1.45 for both the employee and the employer, and that's gonna be our normal set up for the Medicare. Let's take a look at a couple paychecks for them. We're gonna go to the banking, drop down and use register banking and used register. We're gonna say, OK, well, first, pick up the Judy Jones paycheck here. So this is the first paycheck for Judy Jones started at the end of the year. We started paying her at the end of it here in this example problem. So we'll double click on this item and then we'll go to the paycheck detail. And so here is our information. We're looking here at the Medicare, and there's an employee and employer section notes. It's a lot smaller than than the Social Security in terms of dollar amount, and that's because the percentages smaller. It's basically going to be a flat tax for the most part, So we're gonna have in this example the 41 666.67 of pay in this pay period times the rate of 0.145 So 1.45% 0.145 and that will give us our 604 17 rounded. And so we have that on the employee E portion and on the employed er portion. We'll have that same amount on this side. That's how it will be recorded, this side coming out of the paycheck being paid by the employee, although we as the employee employer, are responsible for taking it from the employees and then paying it this over here being paid over and above what the gross pay amount is that we are paying the employees so know that the calculation generally isn't too difficult for the most part for the Medicare, and it's gonna be pretty standardized for a much larger zone because it doesn't have the same type of cap. Although we could have added Medicare taxes for high earners something like over 200,000 we might have some added Medicare, so let's take a look at some examples where it could be a little more complex if we close this back out, close this back out and we go into, let's say, Anthony above that paycheck to paycheck above and double click on that item and the paycheck detail. We'll note that Anthony has a lot more in terms of items including dental vision, health insurance, term life insurance and H S A and the union dues and the garnish mints. And some of these items could impact the Medicare calculation. Most of them do not. But there could be some that doing well go through and discuss them as we put this problem together. But just be aware that even the Medicare can be a bit more complex. So 4000 plus the 37.5 in this case is the gross pay. If we multiply that times a rate 0.145 then we would think that the Medicare should to be the 58. And if we look at the Medicare than its 63 so there's something else going on here in this particular example. So this is just an example to note that even with this kind of flat tax, which should be easier, for the most part, it can be a little bit more complicated if we have a bunch of different employees. And if we have a lot of different types of benefits, which is one of the advantages of payroll, we want to give benefits so those could make the tax of Medicare, which is typically one of the more flatter and easier tax to calculate a little bit more complex. Gonna close this out, close this out. One more example. If we take a look at Judy's final paycheck, Judy Jones final paycheck and she got a bonus here, I'm gonna go to the paycheck detail. So now she's got this bonus, and now in Medicare, that's gonna push your over the cap. So now she's got the normal tax calculation for Medicare. And instead of reducing the tax as Social Security does when the cap is reached, this would be, ah, 200,000 plus the 41 666.67 times the rate point. 145.1451 point 45% is going to give us that 3504 so that's still is being calculated. That makes sense. But there's also this added tax up here of 750. So unlike Social Security, where you hit the cap and then you stop paying the Social Security with regard to the Medicare, you hit the cap and you could have an additional rate that needs to be paid on the money over a certain dollar amount, and we'll take a look at that in our example problem. 19. 50 Federal Unemployment Tax Act Calculation: in this presentation, we will take a look at the calculation for federal unemployment tax or food toe. We're here on our payroll register where we have our two employees. We have the regular pay, we have the total earnings, and now we're looking for the food to earnings. And we want to make sure that we know the difference between the total earnings and the different types of earnings that we could have, or the different adjustments to earnings in order to use them to calculate our taxes. For example, the F I T may differ. If there's a cafeteria plan, for example, the O A. S D. I. Or Social Security has this cap on it. So if anybody is over that amount, then it will differ from the total earnings. And the Medicare and Social Security could differ. If there's something like a cafeteria plan on it as well. If I t could differ. If there's a retirement plan, a swell, it's a cafeteria. The food toe wages will differ when we have this cap of 7000. It's important to note that that 7000 is very low, so this is kind of unusual tax in that case because it's a flat tax. But up to this very low cap, which most people will hit sometime, probably in the first quarter. So most employees will get to this cap at some point. So we need to be very careful when we did a payroll that when an employee gets to that cap , we don't go over it. Now, if we look at these two wages, we can see 7 56 and 6 3053 for this current time period. We can't tell from those numbers whether or not they've hit the cap, though, because we're in week 10 and we need to know cumulative wages, not just for this time period for this test of the cap. So to do that, we'd have to go to the earnings records. So in the earnings records, we can look at these first employees and we can look at the photo wages here at 6008 08 for our first employees. And if we do our subtraction problem, then we're looking here for doing 7000 minus 6808.5. That's $191. So that means if that 1 91 is less than the wages they would have gotten this time, period. Then we're gonna go with the lesser amount. The second employee here is clearly already over the 7000. So we're not gonna have anything included here for the photo wages. So we go back to our food of wages. Then we have 1 91 on Lee, even though the earnings were 7 56 50 And there's gonna be no food toe wages for our second employee. For Pam, that would give us a total of 1 91 The food attacks then will be 1 91.5 times 0.6 Now, remember, 0.6 is gonna be quite low. We've got 1 91 25 times 0.6 or 6%. Move the decimal, two places to the left. So that gives us about 1.15 And that's gonna be the total 1.15 Remember that this rate is pretty much the effective rate for most circumstances because most circumstances will have a state which will have a suit attacks which will lower the food attacks down to this percentage. So for practical purposes, this is typically the percent we will use if you see the food. 2% however, listed out or read the food 2% of looking up, then oftentimes you'll get the full food 2% minus of a deduction for Suta, which will then result in this number here. So just be careful when you're looking up the rates for food. 20. 50: in this presentation, we will take a look at FOTA and Suta tax calculations within QuickBooks, here we are on the home page. We currently have the open windows open. In order to open the open windows, you gotta the view drop down and select the open windows list. We're gonna start off by going to the payroll items list by going to the lists drop down and selecting the payroll items list within the payroll items list. This is where we would set up all the kind of items that are gonna run the calculation of the payroll taxes, including the calculations for federal unemployment here and state unemployment here that we caught. We typically call him Federal Unemployment Tax Act or food for short. It's gonna be called federal unemployment. Typically for QuickBooks. We do have the abbreviation here photo for the tax tracking. This one will be a federal tax again, and therefore it's a less no. One federal tax because it's a smaller tax. It doesn't come out of the actual paycheck, but it is still a standardized federal tax, and therefore it will be something that QuickBooks consent up pretty easily through the inner through the interview payroll process, which can be done through the employees dropped down and the payroll set up when we first set up the payroll. It is a little bit more confusing because note that food does tie into the suit attacks the states, so we have tohave. The suit attacks in place in order for Fouda to be calculated, as you would think it would be because it is dependent on the state calculation in some way . But most states meet the requirements so that FOTA will be fairly standardised in all states, so it's a bit confusing, but it should be fairly easy to sit up now. The California then We're not talking too much about the California taxes here, although we will have an example with with the California tax. But we're not talking too much about state taxes within this discussion of federal taxes, because the states will vary from state to state. But just note with regard to the state unemployment, that every state pretty much has one because it's tied to the federal tax in some way. So we kind of have to talk about it a little bit for that reason, and so the California unemployment. This is California, for example, will be here. If we look at these, note that we have the federal tax. We've got the rate and again, this rate will be dependent on the rate that will actually be calculated Will be dependent on the state tax. We've got the low cap of 7000 and we've got, and that's gonna be the information here. We also have on Suta a similar calculation for this particular state for California. We have the rate even that 7000 that low cap. So let's take a look at some paychecks for an example. This is another area where it's really nice toe. Have the QuickBooks system to help us calculate it. Not because the rate is difficult because it is a flat tax to some degree, but because this cap makes it a little bit confusing. So let's take a look at example of that. If we go into banking up top and use register and we go into our checking account, we've only got are two employees and this is all payroll. So we only had one employee that we had through this. This is all payroll for Anthony through the entire year of 2018 and we're gonna take a look at this problem later. So if we go into this first paycheck, then for Anthony and check the paycheck detail, we'll note that we have the calculation for on the side for federal unemployment and going down to state unemployment. Now note that they're not over here. They're not on the right side because they're not coming out of the payroll check. So note that it's not a calculation for net pay as it's being calculated within QuickBooks as it should be. It's on this side, which means it's gonna be paid over and above its being paid by the employer, not the employee. And we have that 24 30 eight and the 1 38 there fairly low with regard to taxes in general . Most the other taxes are going to be at a higher rate than the federal unemployment. The calculation is straightforward as well. If we take the gross pay 4025 plus the 37.5 times 0.0, uh 6.6% or 0.6 and we say Okay, that's the 24.38 So know that that's not too difficult to calculate. We might say, Why do I need to pay QuickBooks to calculate that? That's easy to Dio, and it is on the first paycheck. But again, if we have multiple employees, then it becomes a little bit more cumbersome. And when we hit this cap, as we'll see if I close this back out and close this back out and we go to say, the this paycheck, what is that? The fourth pay check and check it out? Then we'll note that the calculations for Suta and Fota are have gone down to zero There. Gone. Why? Because they hit that cap. They've already hit the cap, and therefore, this is an area that it's really nice toe. Have the software to be able to hit you hit the cap. We're not gonna calculate it and not make that that error that easy air to make, which is to keep on pain. The food A in suta even build the employees had hit the cap because you just don't see it on any individual paycheck. You have to look at the year to date paycheck to know that they hit the cap, so we'll talk more about that as we process through a longer payroll. But just be aware that's one of the nice things toe. Have a payroll system to be able to catch that note also, that if you go through payroll for close this out and we and we enter payroll through the arrest of this whole time period for that one employee that they're never gonna pay Suta and food again. And it'll look funny when the new year starts, because then we'll have to pay it again because they'll be below the cap for the new year. So if you go into payroll at the end of the year or any time in the year and then you and then it flips over to January, you may see some things. You will see some things that will differ greatly, especially with regard to suit and FOTA, because they're going to start over again now. Also note, if you get another employee, as we did here, Judy Jones Just this. She's a new employee now. At the end of the year, if we if we check on her paycheck at this first paycheck, then bones. She's hitting footer in suitor way out here at the end of the year, which again, if you're processing payroll, you're kind of new to the system, then you're probably saying, Hey, I've never even seen food ensued attacks yet. What is going on here? Because they've all hit the cap it the beginning. Although this is, ah, high earner, she's a new employee as of this point in time, therefore hasn't hit the cap and is paying all of the food and Sudha at this point in time so that the cap is the big thing that QuickBooks can really take care of and help us out with these taxes, as well as the relationship between the state tax and the federal tax within the QuickBooks system. 21. 55 Employer Taxes Calculation: In this presentation, we will take a look at the employer taxes calculation. It's important to keep the difference and distinction between the employer taxes and the employee taxes win. Considering payroll taxes, this can be difficult because they are related. In some ways, there's some taxes that will look much of the same and because the employer really is the one responsible for actually making the employee pay the employee taxes, meaning the employers really the one that that is physically conducting the logistics of writing the check or making the payments for the taxes to the Fed and the state. But they're coming out of the employee paycheck. So the employers still making the payment or physically making the payment. But it's being paid by the employee e. In the case of employee taxes, as opposed to the employer taxes, where they're where they're not coming out of the paycheck, these air the taxes that are gonna be paid for payroll on the basis of payroll earnings, but paid out of the employers ah, wages or the employees earning is that wage of the employers earnings for profits. So we have here than the O. A S T I the h i, the food A and the Suta. These two look familiar when thinking about the employees side because they will be there as well. The O A S T I being Social Security, the h I being Medicare, these are gonna be the employer portion of them. However, so these are not the same amounts. These are not. Will there be the same amount? But they're not the same in that. They're gonna be twice the amount we're gonna have to pay it from the employer. And this amount isn't coming from the employee check. It will be coming out of the employer checking account. Then we have foot up, which is an employer only tax. So only the employer is paying food to federal unemployment tax, and then we have the state tax. We're not focusing in on the state taxes here mainly, but because Suta and food are so related, we typically will see Suta here as well. So Fouda is an employer tax. Suta is necessary to pay if we're gonna get that lower rate for food. Toe suit has typically somewhat more standardized from state to state than others. Taxes Because of the link between Fruita and suit. A book could still vary from place to place and business to business. So if we go through these in a little bit more in depth, we're just gonna do the same calculation for OSD I Social Security. It'll look the exact same as when we look at the calculation for the employees portion. In other words, we have the employee wages. We're just gonna take those wages times the rate 6.2% difference here being, however, that this is gonna be twice That is gonna be the same amount. But we're really doubling up the amount that it's coming out of the employee. Check this part not coming out of the employees check. And that's the other thing to remember. This component will not be paid out of the paycheck but will be paid by the employer. So we're gonna take this 6 4002.50 times 6.2 or 0.62 which would be to 51 88. Then we'll take this 44 28,024 times the 6.2% which would give us the 2 47 29 Then we'll take the 5004 09 50 times, a 6.2% to get the 335 39. Finally, the 35,000 times the 6.2% giving the 1 2070 a total. Then if we some of these up of 1 3031 55 and then we have the h I. Same idea. This is Medicare, and it's the employer portion. So although the calculation will look much the same of this portion of it will not be coming out of employee wages but out of employer earnings. So we've got the 4060 to 50 times the 1.45% or the 0.145 giving the 58 91. Then we have the 4 4024 times the 1.45% or 0.145 giving 64 15 and then we have the 5004 09 50 times the 1.45% or 0.145 giving the 78 44 then the 35,000 times the same, giving us 507 50 adding those up for a total of 708 99. Then we have the food. The food will be an employee, er, only tax. That's probably one we don't have as familiar in our mind. So the federal unemployment tax act, because it's not coming out of a paycheck for one so we don't may have not have as much personal experience. And two, it's a lot smaller, so it's probably not as noticeable as, well. It's gonna be that 0.6% or 0.6 much smaller. It is coming out of the employee earnings, not the employees out wages. Note that, of course, this 6.6% is linked to the suit attacks, so this, for all practical purposes at this point, will typically be the rate used. But when seeing the rate, it will typically be higher and then reduced. If we pay. Suta, which just about every state has implemented and therefore win, will use the lower rate for food off 0.6%. So the 4060 to 50 times 500.6% and remember what 0.6% is well, the one calculation and the calculators toe 4062.5 times 0.6 So 0.6 That's what we got there then The 4 4024 times 40240.6% or points OO six is 26 54 of the 5004 09 50 times, 2.6% or 0.6 giving us the 30 to 46 in the 7000 times 70000.6% or 0.6 providing $42. If we add these up, then we get to the total of 125 38. Then we have these suit, um, and again, this is a state tax, so it's going to be an employer portion to it. And it may just be an employer portion mirroring the Fouda or depending on the state, and may have an employee portion. It also may have a similar cap to it, or a different cap, depending on the state requirements. But many times it will follow the same format as food toe, and they're gonna be related. Remember, because we have to have some minimum standard for Suta if we want to pay the lower rate for food. So here we're just gonna take the 4060 to 50 times to eat 5.4% or 0.45 which is 219 38. The 4 4024 times toe point off the tense of 5.4% providing the to 38 90 the 5004 09 50 times to 5.4% or to 92 11 and 1000 times the 5.4% or 4 32 adding these up some into 1 1080 to 38. 22. 55: in this presentation, we will take a look at employer payroll taxes within QuickBooks. Here we are on the home page. We currently have the open windows open and ordered open the open windows. We go to the view, drop down and select the open windows list. We're gonna take a look at the lists the payroll items list by going to the lists dropped down and going down to the payroll item list. The employer taxes, like all taxes within the payroll settings, will be set up within the list of payroll items lists. And we will set them up generally by going through the interview process by going to the employees dropped down and setting up the payroll. And this will be done whether we have the manual version or the paid version. It's important to note, as we go through this list, which of the taxes are going to be the employee responsibility in which the employer and when we open them up and look through them, we'll get an idea of why they're being set up the way they are because of that and what's gonna happen with them when we process payroll with regard to the payroll reporting and our normal financial statement reporting, we know that there's going to be two taxes that have an employee and employer portion or the food to taxes are usually the ones that come to mind. First, those are gonna be the major payroll taxes other than the federal income taxes that will have an employee and employer portion. The way QuickBooks deals with that is having to payroll items one for the employees, one for the employer. So you'll note here for Medicare, for example, we have the employee and employer version that Medicare for the company is going to be the one that's gonna be driven and go into the employer taxes. We have a similar set up for the Social Security, which is the other Fike attacks where we have the employees, that company and the employees. So have the employee and the employer or company. So the employer side is the one that's going to be used now. These air confusing because they have the same rate for the employee and employer portion, which makes it easy for us to think that they're kind of same thing or get them mixed up. But just note that there are being driven by two different items within the payroll settings. The other big employer tax that will be broken out separately, is the federal unemployment. Now I say it's a big tax because it's it's going to be one of the federal taxes, but it's not big and typically dollar amount. The percentage is fairly small for the federal tax if we have the state tax set up in some way. The state unemployment note, though, that this will be an employee er tax. If we double click on this one, we say that it's the federal unemployment it's going to go to The payroll liabilities and payroll tax expense were actually we've actually made this go to a payroll tax expense account rather than the payroll expense account, and we'll show how to set that up. And then we've got the rate here and, ah, the tax set up there. So we actually are breaking this out to another account. When we process it within our payroll system, it will show a different financial account, and we we actually made a slight adjustment to show that. But that's a nice adjustment to have and then we've got the California unemployment, which is the other one that we typically will talk about even when we're only talking about the federal taxes. Because the federal in the state for federal unemployment and state unemployment, arm or linked together and therefore to really discuss the federal tax, we got at least mention that the state tax has to be there. So let's take a look at this in terms of a payroll. So we're gonna go up top to the banking, take a look at some payroll checks, we're gonna go to the EU's register, and we're gonna go to the checking account. That's the one we'll go all the way up top first. Him We'll pick Anthony More the first paycheck going into that item and taking a look at the paycheck. This is the detail now. Note that the employer stuff is really the stuff on this side, this side of stuff that's being paid over and above four QuickBooks. So anything that's on this side is being taken out of the paycheck. So it's really being paid by the employee in that we're not paying thing anything over and above what we have agreed to pay the employees if it's on this side. We agreed to pay the airport employees this amount, and this is just stuff that we're going to take from them and pay to someone else for them . The stuff over here is really the employer side stuff, the stuff that we're paying over and above what we agreed to pay the employees in terms of gross pay. And that's gonna include the employer portion of Social Security, the employer, Medicare, the federal unemployment and the state unemployment. Now note that these two are gonna be there most of the time, all the way through the year, so we have a good idea of them. They will start to feel natural. If you start to process payroll, who have two sides, the employer and the employee. The employee will never see these two sides, so if you're only looking at your paycheck stub, you'll never see this side. But if you're processing papal, it'll be there all year. You'll have to pay. Another happened. You know you'll be very aware of it if you're paying it out of the system. These two sides, however, will only be there in the first quarter because they have that cap of 7000. So just be aware of that. If we close this back out, for example, and close this back out, note that if we went back down here to another paycheck later on in the year, say on 81 double click on Anthony's paycheck there. These are all paychecks, by the way. So if we go into the state check, then we'll note that the Social Security and Medicare are still there that that the amounts may change. We'll talk about that as we work the problem, but the federal unemployment, sitting unemployment are gone. So those are two employees, er taxes that often just get confused. One because the dollar amount of small and too, because they hit the cap early on in the year, and that can make people not fully understand them very well. So if it closes back out and close this back out. Also note. If we go to Judy Jones, our new employee, that we started on 12 1 and look at her paycheck, this is the first paycheck at the end of the year for Judy. Just be aware that this employer tax as we look at the paycheck stub. We'll be back and play for for Judy, so we'll see that this even though she's a high earner. We have the federal unemployment stayed unemployment at the end of the year because it's her first paycheck and she hasn't hit the cap yet. And therefore she's gotta hit the cap before it will go away for her as well. So that was they're gonna be the main federal tax or where it will be within QuickBooks and how it will be calculated for the employer taxes. 23. 60 Employer Responsibilities and Processes: In this presentation, we will discuss imploded responsibilities and processes related to payroll. One of the things that the employer will need to do and we'll need to do whether they are a corporation or a partnership or even a sole proprietor is to get an employer identification number from the IRS that done with the former SS for So this is gonna be out just a reporting type of document that we will need to have. We'll need to use this employer identification number when we process our tax documentation . And, of course, any type of regulate ation body is gonna know us from a number. And in terms of processing payroll for the federal payroll, we need to have a separate number that being the employer identification number now, this number is gonna be important because it's it's It's more standardized in terms of just employment, meaning any type of organisation can get the money i n number. Even if we're a sole proprietor. Ah, partnership or a corporation. So that corporation, as we know, is a separate legal entity, and it's gonna have its own its own, um, corporate number when reporting income taxes. But the formats of a of a company such as a partnership typically have different types of reporting requirements in terms of the number one reporting income taxes and a sole proprietor possibly could be in a situation where they're using a cell security numbers. So we have a different type of format for reporting on a number basis to the I. R S for income taxes. So the the employer identification number can be used then to give the iris more of a standardised process when we're talking about payroll, no matter the type of entity that we will be using. The employer identification number can also be useful for sole proprietors if they want Teoh process 10 99 type forms and not have to use their cell security number in certain types of documentation as well. So even if we don't have any employees, in essence, it for a sole proprietor were kind of our own employees in some ways. And we may want to have some other number representing our business other than Social Security number, and that could be these. The employer identification number, the process for for applying for the SS fourth fairly straightforward, you can do it online and online application as well, or go to irs dot gov. I r s dot gov. And if you go to forms and go to the SS four, you'll find the application form and you can just go through the steps for the application form. It's a one page form. Ah, pretty quick form to fill out and get going Notice. Some of the key components will be the type of entity here where we have the sole proprietor, the partnership, that corporation. So we have all the all the different types of entities that we can have here applying for, ah employer identification number using the same form. That's part of the purpose here. And then we've got also the reason for applying. If it is it a new business, or did we have new hires? Possibly, um, that are better taking with me, and we're starting to have employees and therefore need an employer identification number. Once we have that, then we're gonna report that on our federal forms, that being the 9 40 the 9 41 payroll processes could change and differ. When we're talking about that, large companies and small companies, obviously the larger company is. The more complexities we have, the more legislative requirements We typically have oftentimes have to meet more legal requirements, and we need more internal controls to safeguard ourselves, as are our company grows. One problem with large companies is is we obviously have more employees. We have more time to track. We wanna have some system that can possibly be more Elektronik and served as having more accountability, even if we don't have the direct supervision as easily to track more people. So we're gonna have probably some Elektronik type of devices to clock in and clock out within larger companies, devices that employees can can use to log in and log out. Those methods are gonna need some type of good security system, including security secure. Log in so that we could make sure and safeguard against the proper logging and logging out we could safeguard against. We might have some type requirements to make sure that the person logging in is the actual individuals. Whether people can't log in for one individual and start start their time clocks that might have some individual identification methods, we could try to limit the Loggins by location as well, so make sure that it's not an online logging weaken. Try to limit the log into a specific location. We might have the time clocks that have to be punched in at a Smith specific location when we're talking about people in different locations. We could clearly have some type of online type process as well for people to log in over the Web, tohave the log in access and report their time. And then supervisors be able to collect that time over a Web based system. As we do that, we want to make sure we run into problems with cyber security to make sure that all of our information is secure as we're at, we're processing the payroll information we want to have, ah, more complexity in terms of the database system. Teoh to limit the types of people that have access to two different things. To be able to separate duties between individuals who are logging in ah and approving time in recording time in the payroll process. Therefore, to have that separation of duties, we we will typically have multiple types of divisions within payroll s the payroll department gets larger as we have different payroll. We're gonna have different divisions and different segmentation is that you will have access to within the payroll system to allow for the separation of duty to allow to reduce the likelihood of fraud or theft. Now, in order to deal with this type of complexity, payroll will often be outsourced. So payroll is becoming more and more something that many companies will specialize on. Companies like 80 p or paychecks. These air just gonna be a few ah type of companies that will specialize typically in just payroll, and they will provide. A lot of these types of resource is now. There's a lot of pros and cons, Teoh outsourcing or insourcing of doing you're doing your payroll within house or outside. One of the pros of outsourcing to 1/3 party, like 80 p or paychecks is that they specialize in payroll, and therefore they have the knowledge needed in order to process payroll and typically have hopefully, the ability Teoh keep up to date with new laws and regulations, as well as dealing with places in different parts of the company country, different parts of the world, some things we need to be careful of of course is that because we have ADP and Paychex processing, we still need to put it into our accounting records in some way or another, and so that could defer the way we do that could differ depending on, uh, what we want to set up, how we how we were going to set this thing up. So in somewhere another, the outside individual, I's gonna have to get that information and put we're gonna have to integrate that into our system so that our financial statements represent and reflect what has been recorded by payroll and pay checks. The other problem, of course, is that it is bringing in a now outside source that we are becoming dependent on. We're depending on payroll in paychecks in order to process a key component rather than having the full control over that processing. Ah, in house 24. 70: In this presentation, we will discuss the payroll expense journal entry within QuickBooks. Here we are on the home page. We currently have the open windows open. In order to open the open windows, you go to the view dropped down and the open windows list. We're not going to discuss the journal Entry four payroll. This is important because this is how we typically think of recording transactions. From a financial accounting standpoint, we think of debits and credits, debits and credits increasing to record transactions when we process the payroll. However, in QuickBooks, QuickBooks sets it up in such a way that we don't see that standardized journal entry as you would think we would to process one full payroll. It's still important to know the journal entry because the accounts still are going up and down, and there are many times when we want to know the journal entry. For example, if we had 1/3 party that was processing the payroll that they were gonna put it into our system, the easiest way to do that is with one journal entry. It's also important to note that we can think of these journal entries in terms of on a journal entry for each employee e or as a journal entry for the entire payroll process as one lumping everything together to consider this. Let's take a look at a pay check and see how QuickBooks will report this paycheck on the financial statements. So we're gonna go to the banking drop down. We're gonna go to use register, and we'll go to the chart checking account. Let's go to the checking account. All right, here we have the checking account. Now, if we look at our first paycheck this for Anthony, we only have one employee. This is our simplest process for the paycheck. If we double click on this paycheck, we had it paid on to ones for the month of January. Paid on February 1st looking at the paycheck detail, this will give us the detailed information that we could construct a journal entry. Far from now, all of this side is related to the employer journal entry. So if we were to think about how we gonna make this journal entry typically in financial accounting, we think of it as two separate journal entries. We have the employer journal entry, and then I would typically break out the taxes separately. So we have the employees that were paying the employees, taking the with holdings from the employees and then the taxes. These are the taxes. This is the employee side of things. So here we have the gross pay. And if we think that in terms of a journal entry, that would be the debit to expenses that we would are going to see in terms of QuickBooks will see it increase on the expense side. And then we would have the with holdings. This is what was taken out federal income, Social Security, Medicare and state taxes. Those are going to be credits that we're gonna take out and they're gonna go into a liability. The difference, then, is going to go to the Net. Check the cash that's gonna be paid so we can think about that journal entry here. Let's see what it looks like if we go into the financial statements. If we close this back out, we're gonna close this back out and go to the reports. Drop down company and financial. Look at our two main financial statements the profit and loss being one of them. We're gonna make it as of 020118020118 And this will just show one payroll and we've broken out the payroll expense and the payroll taxes, which are the employer portion in this example. And we've done that by changing the payroll. Items will talk about that later. This is the payroll expenses side of it. However, if we double click on it, we'll see the detail for it. These Air two paychecks that are both Anthony here and we can see there's broken out by paycheck, not necessarily by journal entry. It's broken out by the paycheck detail, but we can see that it's increasing expense account. And we know that expense accounts are debit balance accounts. So this is basically the debit, but it's recording it with two items based on the journal entry. If we double click on it then and we double click on this item, we see that the numbers need picked up are coming from this paycheck, and they're the hourly in the overtime. So, in other words, they're not Benet pay. This is a debit. This is an increase to the expense account for the growth pay on the employee attack may put he payroll expense. Then, if we close this back out and close this back out, we look at the other side, which is gonna be on the balance sheet. So if we go, the reports drop down company and financial and we take a look at the balance sheet and we make this as of, let's say, oh to a 118 as well. So we have that same break. We'll see in the checking account. If we double click the checking account, there's our our check. So it credited the checking account. There's our paycheck. If I double click on that item and double click on or just click on the paycheck detail, That's the Net check, not the girls. Pay the net check. So we concede we can reconstruct this. We could say, OK, this one paycheck is decreasing the cash by the net check, and it recorded an expense for the gross pay. The difference then, if I close this back out and close this back out and close this back out is going to be in the payroll liabilities. So in the payroll liabilities, this is going to get a bit confusing if we double click on the payroll liabilities. We're going to see all this stuff here and noticed. This is this is where it gets a little tricky and QuickBooks because it's trying to give us detail not in terms of debits and credits, but by the activities that's happening. And what they're trying to do is really limit the number of accounts that we have to simplify things and group more stuff in tow, grouped up accounts, meaning this liability account is responsible for all the other stuff that was taken out of the check and the employer liabilities. So if we break this out, this is all one paycheck. Then it was okay. Well, where did that word of that 4.6 come from? If we double click on the 4.6 and we go this paycheck, we have toe look at the detail. That's the employee training to California tax, but and that's an employer side, which were not even really discussing Right now, we're only discussing the employee side so we'll get to that were kind of grouped in together here. We'll get to that a little bit later, but that's included. And then if we go down here to that 1 74 what is that? If I go into this this item here, the 1 74 is the federal withholding that we pay. It's a payable that we're gonna Oh, so we close this back out, close this back out. Okay, what's the 2 51 88? There's two of them and there's a 58 91 2 of them double clicking on those that's the employer and employee portion of Social Security and Medicare. Closing this back out, closing this back out. Then we see that the 24 for Go back into that item 24. Same. Check federal unemployment so we can see that Basically, all of the all the stuff that's being pulled out of the check as well as all of the stuff over here that's the employer side is being pulled out and put into a liability account. So that's nice, but also confusing, and it's formatted a little bit differently than we would expect. I'm closing those to back out in terms of a journal entry. I'm gonna close this back out in terms of a journal entry to we might think it make. It would make it a little bit easier if we were to apply these out, too. Not just apparel liabilities, but possibly Fike a liabilities for Social Security for Medicare alive. Different liability account for F I t. A different liability account for the insurance, the dues or any kind of benefits, and we can do that will take an example of that. But the default for QuickBooks is just a group it all together, and that's probably to try to simplify it for most people, although when we do try to look at the detail, it can be more complex and more confusing when we go into this payroll account. So that's that's one format we can look at. If we just look at this journal entry for the one employee in that payroll, we can see that we increase the the expense account by the gross pay. We decreased the checking account by the Net pay, and we put everything else into the payroll liability account. Now, if we take a look at one more, just Teoh, get an example of go back to our checking accounts. If we go down to these last two, you'll note that there's two employees now Anthony and Judy and this this last payroll. So this one happened on 12 31 If I was to double click on Judy. Now this is our second employee E and her detail. We've got this big paycheck that happened at the end of the year. If you were to think about Payroll, then if we close this back out and say, Okay, what would the journal entry be for the employees? If we if we go back to our let's run It Again, reports company financial and the profit and loss report this time, I'm going to run it just for the end of the year, which is 12 31 18 12 31 18 December 31st 2018. Now we've broken it out to a couple. Different groupings depend on the payroll type. We're looking at the payroll expenses here. If we double click on it now, you'll see that we have payroll items for Judy and Anthony now. So now now we can think of this as two separate journal entries, one for each employee that's gonna have a similar process as we did in the past, or as one big journal entry. If we didn't want to see the detail by the employees. For example, if we got something from paychecks or E. D. P and we we just want to enter it into the system has one big journal entry so that we see total expenses. Then we can group them together as one big journal entry. Or we can think of it as detail between two journal entries. So here's the expense account. If we go to the other side on the balance sheet, which I'm gonna open again cause I closed it reports company financial profit and loss, and we go down to the balance sheet standard gonna make it as of 12 31 18 Now, if we go to the checking account, we could see we have these two checks. These air both payroll checks, and again, we can think of it as two separate journal entries per hour to employees or one lump sum term country, bringing the checking account down by 1 16 1 53 So if you think about it as a journal entry safe from another outside source. We would probably put in the net check just to get the total activity. If I want the detail, we would go to the outside reports from E. D. P. A. D. P. Or paychecks or whoever are outside payroll company would happen to be. If we close this back out and we go to the payroll liabilities, it's gonna look like a mess. And but notice these air only to two employees. And again, this is where can kind of get confusing by grouping them all together into the payroll liabilities account. Ah, even just to employees looks a bit overwhelming. But if we go into any of these items, it's just gonna take us to one of two paychecks where we should be able to find each one of these item details within the paycheck detail. 25. 80 Payroll Tax Expense Journal Entry: In this presentation, we will take a look at the payroll tax expense journal entry focusing in on the employer portion of payroll taxes. To do this, we will have a worksheet for the payroll. Tax expenses will be using numbers from a registered type worksheet, but note that the payroll taxes for the employer portion are typically thought of as it worksheet outside of the register. In that, in other words, the register is going to give us that information to get Teoh net income from regular pay. And that is gonna be that type of worksheet, which will help with the journal entry to record the payroll taxes for the employees portion that they owe but not the employer. Taxes or the employer. Taxes will typically have a separate worksheet where we will calculate the employer portion , which will be similar in some cases, and defer and others. So let's take a look at the register. We're gonna have the normal pay that total pay. We've got four employees here represented by these four totals. We're looking at the total for the employees, and we're gonna be recording this information as a net some rather than four different journal entries for each employee. Then we have what was taken out. O A S T i of the wages for the employees, the H I, Medicare, Social Security, Medicare F I t federal income tax group insurance union dues for a one K net pay. That's what was taken out on the employee journal entry. Now we're looking at the employees, er, tax journal entry, where we will also have again O a S t I our portion of Social Security which will match the employee portion and no, when I say our abortion were and we're going from the perspective that we are the employer here. So where the employee error? This is the employer portion our portion here, which will match the employee portion. Same for the h i or the Medicare. This is gonna be the employer portion that is due which will match the employee portion. So those two there's gonna be an employee and employer er portion note that this is coming out of the paycheck, whereas this will be the same amount, but not coming out of the paycheck, and it will be coming out of the employer checking account. And then we've got food A and Suta food is gonna be an employer only tax. So this amount we don't see appear were probably less familiar with it. It's not coming out of net pay. We don't see it on our pay stub. When we get the catfish ins for our net pay, it will be coming out of the employer side. And then Suta will differ from state to state. But they're related. Will typically have. It will have an employer portion to it, and it may have an employee portion depending on the state. State laws could differ from state the state. So this is the one we're gonna use in order to create our journal entry here. If we go Teoh this worksheet and start to build our journal entry based on a trial balance , what's gonna happen is we're not gonna pay cash. Our first question is cash affected? Not yet. We haven't yet paid it. Were incurring this expense as payroll is being processed. So we will have a payable account. I mean, an expense account for the payroll tax is payable and the other side of it will be that liabilities what we owe. So we're gonna Oh, away ste I h I food test suit that we have not yet paid them because we haven't. We haven't gotten to pain them yet, so cash is not affected. We have a payable. We are incurring an expense. So here's the expense. This is gonna be a debit balance. Expenses are going to go up in the deputy direction. So the first thing we can see is that expense. Now, this is summing up these four. I'll get to this total at the end, I will summon up again, but just note that it will be an expense here, increasing this amount. Also note that this is the payroll tax expense which will be part of the payroll process but is different than the salaries and wages expense. And this salaries and wages expense includes the payroll taxes that are going to be paid by the employee. In other words, this number that we're calculating for payroll taxes on lee is the employer portion of payroll taxes does not include the employee portion. Then we're going to put a credit for everything that we're gonna Oh, those will be liability accounts. So we've got accounts to 15 which is the O A S T. I. Or Social Security, which will go up then we have the h. I or Medicare that we're gonna increase the liability for. Then we have the photo federal unemployment tax, which we're gonna increase our liability form. These coming directly from our worksheet here to increase the liabilities. Then we're gonna have the SUTA, which will increase for the liabilities. We'll take a look now at the General Ledger, so we're going to see this data now posted to the General Ledger. So here's our journal entry. And if we look at the Geo, we can see a little bit of detail, and it's interesting to see some of the detail to some of these accounts. So if we were to look at the payroll expenses, we see that the payroll expense started at zero, and then we're gonna debit it. So we're taking this debit down here, 7 4033 48 it's gonna increase it to that balance of 7 4033 48 And then we've got the 2 15 which is O A S D I, which we are crediting 3031 55. Here's the O A S D I. Before this journal entry, it was at 3031. 55. We are increasing it by 1 3033 55 in the credit direction to 6000 63 10. Note that these two represent the employee portion. The portion were not put in here on this journal entry and then the employer portion. So we owe a total of the 6063 after the employee and employer portion. But we're focusing here on the employer tax calculation or the employer journal entry. Then we've got the h I 708 same situations. Medicare. So it was at 708 99. We increased it by 708 99 in the credit direction to 1004 17 98. So these two represent once again the employee portion and the employer portion. Then we've got the photo which is going to go from zero up in the credit direction by 1 25 38 to 1 during 25 38. And then finally Suta, which is going to go from zero up in the credit direction by 8 67 56 28 50 67 56. So those are gonna be our components now, these two, of course, Onley have an employee portion. So we don't see this doubling up as we do with thief. I cut taxes, these two only having one component, that being the employer side. So if we go back to our trial bounce, we can see that we are in balance. We can see that the debits and non bracketed or positive numbers minus two credits in bracketed numbers will equal zero. That means debits equal the credits. The effect of this journal entry then, is this increase to the payroll taxes expenses that went from zero up to 7 4033 48 So note that's gonna be different than the salaries and wages expenses here, which were recorded in the prior journal entry. And also note that this 48 8 96 for the Employees Journal entry the one we're not doing here includes the employee payroll taxes. So this is not the net check. This is this is total check. When we look at the payroll taxes, then the only thing that's gonna be in the payroll tax expense will be the employer portion that we paid for the payroll taxes. So that's an important thing to note. Commonly commonly mixed up, we can see appear that we have the away S D I, which is going to include both the employee and employer portion, these being liabilities that we will then have to pay to the Fed in the future. We've got the food A and Suta, which are just coming from this journal entry. They're not twice that journal entry because they're just coming from the employer portion only. 26. 80: In this presentation, we will take a look at the payroll tax journal entry within QuickBooks. Here we aren't the home page. We currently have the open windows open. In order to open the open windows, we go to the view dropped down and the open Windows list like the Payroll Employees Journal entry. The payroll tax journal entry can be confusing within QuickBooks as well, because it's not as easy to just see that journal entry related to just the payroll taxes. It's important to know it, however, and be able to derive it one, because we might need to input it from an outside payroll service such as ADP or paychecks into our system or because we just need to understand how the items are being recorded in the system. And the journal entry is really the easiest way to think about that process, but QuickBooks will piece it out in different formats for different reasons. So when we go in and try to analyze what is going on within QuickBooks, it's always gonna go back Teoh paychecks and paycheck detail. So let's take a look at that. Let's analyze what the journal tree is and how quickbooks will be reporting it. So to do that, let's take a look at a paycheck. We're gonna go to the banking drop down and we will go to the register use register. We're gonna go to the checking account, and we'll start up once again with Anthony Bores. First check was take a look at Anthony Moore's first check on to one. These are all paychecks, by the way, will be running this payroll problem later. It's gonna be great. And then we're gonna go to the paycheck detail. And so for this paycheck note that we looked and the employer side I mean, the employee payroll is really all this side. When we think of payroll, we really think about this side when you think about your payroll check stub within QuickBooks, that's gonna be this side of things where we have the gross pay, everything we took out of gross pay and in the Net check, as we basically would see in the pay stub. What we don't understand as much is because we don't get as employees way, don't see it as often. Is the employer half of it. So although this side is kind of more easy and more straightforward. To some degree, it's just a, uh it's less understood because we don't see it as much as employees as employers will get . Well, get used to it. And it'll be very known because this is it gonna be items that were paying over and above the payroll items here. So within QuickBooks note that this is the employee error side of the items. Meaning we're paying these This amounts out of the employer, uh, money over and above what we promised to pay the employees. This stuff is all stuff that really we're not paying over and above what we agreed to pay the employees. We agreed to pay the employees this much, and then we took these out of their check to pay for them. But this is stuff that we're paying on top of the gross pay. And so this is really the employer journal entry. We have the California stuff. That's gonna be state taxes. We won't get too much into that here, but we have the Social Security but Medicare on the food tub, those are the main federal and then the Suta kind of related to the federal unemployment. So we'll take a look at that as well. And these items, The journal entry is going to be more straightforward. For the most part in that we're gonna have a debit to payroll expenses for them and then a credit to the liability because we're going to be owing them. So let's take a look at what the reports will look like him to close this back out. Close this back out. We're gonna go to the reports up top. Look at our main two reports, which will be the company financials and the profit and loss that start there with the profit loss. That's a good place to start. 0201 18 Teoh 2011 A. I'm just looking at that one day because that's the payroll that we had the first payrolls . We don't We only have one barrel item in there, which is on February 1st tooth in 2018 to February 1st. Now what we've done is we've broken up the payroll tax expenses. We'll talk about how to do that at the end of the problem. Just note that when we go through this payroll problem, just note that the default for QuickBooks will be to group these two things together, which is kind of not really proper in terms of reporting it, because you'll want to know the difference between the two. Typically, to be able to make sure that the payrolls being reported, you can tie it into the 9 40 ones. We'll talk about that later. But QuickBooks will typically default it to be in the same account, because once again it's easier. It's easier to just see Okay, everything's just grouped in the payroll, but we're gonna break this out here for the example. If we go into the payroll taxes and double click on it, this will be just the payroll employer payroll taxes. The payroll tax expense should only be employer notice. We only have one paycheck but multiple items related to it all in this one account for the payroll tax expense. If we go into any of these, we got the 2 51 and the 58 to 24 the 1 38 We double click on those and the four, but we're not concentrating on that. Every go into any of those, then these are gonna be the amounts of Social Security, the Medicare, the federal unemployment, the California training tax and the California unemployment. Now these match what's over here for Social Security and Medicare. But just remember, this is the employees, er, side what taxes. And therefore we're really concentrating on this side. That's what we're looking at. So typically, we think of them as two different journal entries when we're doing them as a journal entry . So if I close this out than the journal entry would be a debit to payroll tax expense. The other side's gonna be on the balance sheet, reports up top company and financial profit loss balance sheets standard. And then we're gonna change this to oh too, Uh, 118 February 1st 2018 just that we have that one paycheck for the detail. If you double click on this item, there's our paycheck. And so it's not. Now note that this really isn't part of our journalists. Price shouldn't even going in here. But if I double click on this item and click on this item, this is the payroll that we just looked at that's being processed. That check is coming out 3005 17 75. It doesn't really have anything to do with these employee employer items, however, because we didn't pay them yet. We haven't paid them. So really, cash is not affected. So I'm gonna close this back out, closes back at Although this payroll close in this back out is paid with cash. The German tree were considering the employer side. Payroll taxes is not included here. It is included in the payroll liabilities. Now, once again, they're groups together, all in payroll liabilities. So when we go on the payroll liabilities, it's gonna include employer, employee, and, ah, all the groupings of the different payroll taxes we owe. So security, Medicare, federal unemployment, state unemployment. So it looks overwhelming. Even though there's only one employee here. With all that is owed, the main two will look at. If we look at these two items, the 2 51 88 which is doubled in the 58 91 clicking on that going to the paychecks that were looked were considering this side. When considering this journal entry, we lead to the employer portion. So we got the Social Security and Medicare, and it will have the federal unemployment and the California within QuickBooks. It's groups, um, altogether, though. So it's also there also reporting these items into the payroll at the same time with the same paychecks. So again, when when we consider with terms of debits and credits, it's easiest for us to break it out into a journal entry. When we look at it in QuickBooks, QuickBooks wants to give us more detail, and so we can we kinda have to piece together those two conceptual ideas in our head. What the easiest thing do is in terms of which it counts are going up and down in journal entries, taking it to journal entries to QuickBooks where we're going to say, OK, it's all in the paycheck. How can we kind of rearrange our thinking to know which accounts are going up and down and consider the detail by check? And to consider that a bit more in depth? Let's look at a payroll that has two checks, and so if we go to the last payroll, if we go to the checking account again and we go the last people payroll where we have Anthony and Judy now we have to pay checks. So if we look at that payroll item, go into the profit and loss and we're gonna change the dates to 12. 31 18 and 12 31 18 and 12 31 18 And we look at the payroll tax expense. Now, going into that item, we have 12345 items for each of them. But they're going to be the just the two checks, just the two checks that we're talking about, the details of them now, Some of these are gonna be zero because the food and the SUTA have been paid, but they still have the zero there. If we go into, for example, these two and we go into the that detail, we're talking the 3 5077 and the 3504 for the Social Security and Medicare closing this back out, closing this back out. So again, in terms of a journal entry, if I was to think about this all in one journal entry like it came from 80 p or paychecks, an outside payroll company, we probably think about it as a debit of 9000 to 15 36 to payroll tax expense. But if we're thinking about it by journal entry by employee by employee, we have to debit these these items per employee to get that detail to break out by employees. Which, of course, we need. If we're going to process all the reports within QuickBooks going back to the balance sheet than the other side, we say this is as of 2 31 11 12 12 31 18 December 31st 2018. This liability account. Then if I go into it, it's gonna be looking overwhelming again because it's got to employees in it. And it's got both the employee side and employer side route in here. So when we think about it in terms of journal entries standpoint, going back into your we'd have to think, Okay, I can think about it as one big journal entry related to the two employees and try to piece out the employer and employee portion. Or we can think of the detail of the two employees and try to piece this together. If we were to enter from ADP and Paychex, we would probably just group that, too, it together and put the lump sum to get the detail. I mean to get that the general information in there. If we were to see if you want to see the detail in our system as we would have reprocessed petrol within QuickBooks, then we need to break it out by check. And we can think of the journal entry in a in a similar fashion, a journal entry per employee. 27. 90 Pay Payroll Tax Expense Journal Entry: In this presentation, we will enter a journal entry related to the payment of payroll taxes. Before this point, we have recorded payroll taxes for both the employee and employee or portion. Now we're gonna work on the payment of those payroll taxes. The recording of the employee and employer portion of payroll taxes came from the register , as well as a worksheet for the employer portion. In other words, we have four employees here for employees represented by this set of numbers. If we some those up, then this 48 7 19 is the regular pay for the four employees we took from that. The O A S T I Social Security, the H I, the Medicare, the F I T Federal Income Tax Group Insurance Union dues for a one K plan to get to the Net pay. This information was used in order to create the journal entry related Teoh the employee payroll. Then we used this worksheet in order to create the journal entry for the employees er portion of of the taxes, including their portion our portion at the employer of away sdvi Social Security H I Medicare food to have federal unemployment tax and sue town State unemployment tax. Then if we look at the result, then on our trial balance, which is always nice toe have a trial balance. When recording journal entries, we'll see that we have the food. M o A S t I hear 6063 10 the ah, this is this is the faker away? Yes, the I Social Security and in the fight for the H I Medicare, the food of federal unemployment tax, the suit, a state unemployment and the f i t federal income tax. These, then, are what we're going to pay now. These are liabilities. They include both the employer and employee portion of the taxes. So, in other words, this so security and Medicare includes the tax, both from what we took out of the employee wages and what we owe for the employer half as well. The food and suta on the food. It will be an employer tax, and the suit up for our case will be an employer attacks. The F I T federal income tax for employees is just an employee tax that's gonna be here. We're not paying any f i t. It's all coming out of the check of the employees. So if we build this journal entry, then what we're doing, in essence, is we're just saying, Hey, these are the things we oh, we're gonna make payment for them notes that if we made payment in practice, we would probably have to group the payment in terms of federal taxes and state taxes. Probably we're gonna group. Then the O A S T I and the Social Security or the H I. Meaning the soul. Security and Medicare would both be going to the to the Fed, which we made group in one payment we may have into separate payment for FOTA and a separate payment for suit because it's going to the state. Um and so just note that the groupings of the payments as to how we're going to write the checks and the groupings of the payment could differ. But the point is that after we have these liabilities, we will be making the payment. In the future. We're gonna record the journal entry related Teoh making the payment which will be similar to any type of payable accounts such as the accounts payable, meaning the liability goes up and now we're paying hits him. The liability goes down as well as cash goes down. So it took to create this. We're just going to say Okay, we had to 15 account to 15 for OSD. I credit of 6000. 61 10. We need to make it go down to zero because we're gonna pay it off. So we're gonna debit it, do the opposite thing to it. 6061 10. Same thing for H I. We have, uh And then if we post that as we go, apparently we're gonna post that as we go, it goes down to zero. That's what we want to happen. So we're gonna make all these go down to zero, then the h I and the Medicare. Same thing. We're gonna say it has a credit here. We're gonna debit it, doing the opposite thing to it. And if we post that as we go, it's gonna make it go down to zero. That's what we want. Then we've got the food, um, has a credit in it. So we're gonna debited for that same amount, then if we post it, it's going to go down to zero And then we have these Suta, which again is gonna be debited for that same amount. Then if we posted, it's gonna go down to zero, and then we have the f i T. Which is gonna be It's a credit here, so we're gonna debit it for the same amount. And then if we posted, it's gonna go down to zero. Then if we add all these up, it should add up to what we're gonna pay, which will be the check here. So that's gonna be the credit. So what are we gonna actually pay if we have pull up the old calculate here? Six So 63.1 plus one for 17.98 for Medicare plus 1 25 38 for food toe plus 8 67.56 for suta and 899.13 for F I T. That gives us 3 9073 15 and something must have going wrong. There was trying one more time We're gonna say six So 63.1 Plus that 1417.98 plus the 1 25.38 plus 867.56 and the 8599.13 gives us 17. 73 15. That's how much we're actually gonna pay. So that will come out of cash. Cash is a debit. We're gonna make it go down by doing the opposite thing to It's a credit bringing the balance down to 554 660 74 cents. Now, if we see the whole thing, then here's our journal entry at the end are what happened here is the cash went down and the liabilities have no now going down because we've paid them off in a similar fashion as any payable type accounts similar to how accounts payable would be note to no effect on net income. Just like when we pay off accounts payable, we haven't incurred the expense at the point in time that we paid the cash we incurred expense prior when people worked and when we recorded the journal entry at that point. So when we pay off the payable no effect on these accounts down here No, These are all liabilities, accounts and an asset account. No revenue and or expense accounts If we look at the G l, it could be useful to look at the GL to see how with this all ties together. So here's our journal entry. We posted the fighter away. SD I here. Before we did that, we had 6063 in it. That was the employee portion of FICA Social Security and the employee employer portion bringing us to 6063 10. Then we paid it off. That's gonna be how this payable account should look and how most people count should look if it's a nice even payable, meaning the liability goes up. So it's gonna be the employee and employer portion every time. And then at some point later, a little bit later, when we make the payment, it goes back down to zero. And then if we do the same for a child or Medicare, same thing it was at 1004 17 98. We paid 14 2004 17 98 bringing it down to zero. So same pattern. It's gonna go up by the employee portion up by the employer portion and then we pay. It goes down to zero. Fouda we have the food over here. It was at 1 25 38 Then we paid 1 25 38 goes back down to zero. Note. There's only one portion on Lee the employees er portion. And then we paid off the employer portion. There's no matching there. We could see that in the Geo. And then if we go Teoh the F I team So we have the f i. T. Here, and it started at it was at 8055. 99 13. It's going. We paid it. Then it goes down to zero. Note again. There's only one entry here, and the reason there's one entry isn't because is because it's an employee portion. Meaning this is not an employer tax. It only comes out of the employee paycheck. So this is an employee tax that we paid off No matching hitter. Then we have the suta, which is the state unemployment tax, and that's gonna be it was at 100 67 56. We brought it down 20 We're paying off the suta again. Typically in our problem, it's on Lee a Employees er tax. It could have an employee portion, depending on the state. But that will depend on the state we're gonna mirror here, in essence, the employer function of it, and many times it'll it'll mere kind of the food, and the Suta will be similar in and the way it's constructed, often times depending on the state. 28. 100 Form 941: in this presentation, we will take a look at Form 9 41 employers quarterly federal tax return. Here's a copy of Forme 9 41 This is the 2018 form. You can find this on the IRS website at i r s dot gov. These are gonna be the components of the form. We're gonna focus here on the calculation of the form. We note that up top, we're gonna have the e i N number the name and then the address. Then we want to know which quarter we are talking about. So remember that when we think about the quarters, of course, three months in 1/4 there's 12 months in the year divided by 43 months per quarter. We will indicate what quarter we are talking about here. Remember that this is a quarterly form which is different from the yearly form. And there was a yearly payroll tax form called 9 40 we don't want to get those two mixed up . They can seem similar, but they're gonna be different. The 9 41 is really the main form, and it's gonna be calculating the f i t federal income tax for the employees, the Social Security, both employer and employee and Medicare, both employer and employee. Because these air larger amounts or this is my guess as to why we need a quarterly form rather than a yearly form because their larger amounts and important then we have to have added lead level of reporting meaning, For example, if we take a look at our 10 40 for individual tax returns that we've report at the end of the year for individual reporting, we do that on a yearly basis for the 9 40 ones for the F I T for the payroll taxes, the soul, security and Medicare. We have to do that on a core elite basis. So that's what we're doing here. The 9 40 then similar form to what we're working with here but will be for Fouda, which is a much smaller tax. So it's actually it's actually still a federal tax, but it'll be a much smaller one when filling out this form week weaken. Pick up this information. This is part one of the form line one says number of employees who received wages, tips or other compensation. So whatever the number of employees are in our case, we have four employees at at this quarter. Then we're gonna and note the days. So this is the actual day within the quarter that we can pick up the number of employees and then we have the wages, tips and other compensation. This So we got to be careful on, because when we look at the wages, total wages, then in our case, this is coming from our register numbers up here was 96 9 73 But this wages here is really trying to pick up the F I T wages. Note that line under it has to do with federal income tax. So really this line to it, where we want the F i t wages, which can be reduced by things such as an insurance or ever retirement plan. So this number is 91 for 25 10 in this case, calculated as the total earnings 96 9 73.5 minus those items that could be reduced. You can think of him when you fill out your form 10 40 or what? What will reduce the G I. The 401 k is not something that will be taxable his wages for adjusted gross income as well as if we're participating in a group insurance type plan. Now, in this case, if this was a cafeteria plan, we would be reducing it. But in this case were saying that this is not a cafeteria plan and therefore will not be reduced from the total earnings to get to the F I t. Earnings. So we're just going to subtract for this example of the 5548 point for giving us that 91 for 25. So we just want to be careful. And keep in mind that the F I T wages could differ from the wages for the total wages. So here's total wages. If I t wages are going to differ, then we're going to calculate the federal income tax withheld. And here we have to just pull this basically from our table what we withheld from. So this is what we withheld in accordance with our register. That's the number we're gonna use. It would be nice if these two numbers were related in some way, meaning it would be nice if we could derive this number by some calculation from this number, but we can't do that because the f i T. It's too complicated. So although these not this number is kind of used when we break it down to an employee by employee basis, that rates will differ because each employee has a different number of allowances and a different number of possibly for a one K plan or retirement plan, which could change those calculations as well as BIA's in different tax brackets. So because we have a progressive system and a fairly complex system in terms of the federal income tax, all we can do is say, Hey, this is the total wages that were we withheld on in total for all of our employees, and this is what we actually withheld. There's no way the IRS can say, Let me look at that number and derive this number, but we'll give both of that data to the iris. Then we've got the Social Security wages and the Medicare wages. These are going to be a bit more straightforward. Will pull this from our table as well. The Social Security wages the 96 9 73 that matches this 96 1973 50 up here. Note that this, too could change or be different from total wages. If, for example, there was a cafeteria plan in this case, there's not so that they're the same. Or if somebody had hit the cap of 128,400 in which case they would be lower by by the amount because of somebody hitting the cap. So then we're gonna take this 96 9 73 50 times 0.1 to 4. So if we do that calculation 96973.5 times 0.1 to form, we get 12,024. 71. That's gonna be the 12,000 Ah, 24 71. Now you might not recognize in this rate, and that's because it's twice the 6.2. So when we take the 6.2% times to that gives us the 12.4% or the 0.1 to 4 we're using here . So note that this is including the employer and employee portion. In other words, if we're taking this total that was taken out of the paycheck for F i t. 6012.36 Social Security F I t. Times two. That's gonna give us the 12,024 71. Notice how nice and easy that works, and that's because it's a flat tax. So in this case, we are able to take the aggregate amount here and multiply times a flat rate, and that should be equal. Teoh adding up all the information that we took out of each individual check at the same rate. So then we're gonna do the same thing for the Medicare. So here's the Medicare. Now again, this number could change. Be different Medicare wages from the total earnings. If there was something like a cafeteria plan in this case, there's not. But it won't be different due to there being a cap. In other words, there is no cap on the on the earnings for Medicare, so that's something we don't have to worry about. So it will usually be higher than or if someone hit the cap for Social Security that Medicare wages will be higher. In our case, it's the same amount, so we're gonna take once again that 96973.5 times 0.29 given us 2008 12 23. That's gonna be this 2008 12 23. Again, we might not recognize that number that 230.29 and that's because it's the employer and employee portion. Or, in other words, it's 0.0, 145 times, too. So there's the 1450.29 and this amount that's 2001 12 can tie into our worksheet by taking the H I 1406.12 times two gives us the 2812 23 24. Rounding difference here. Then, if we add those two up in this line five e says, add column two from lines five a. Five B, five C and five D. So what we are doing here is we're gonna be these two numbers. I tried toe get the calculator there and did something crazy. So we're gonna go 12 24.71 plus 2812 point T three. That gives us 2 14 8 36 94 That's the total fight. Cut taxes then. So if we add that number plus the federal F I t federal income tax, which is 1703.26 The 31 8 40 20 is gonna be the total taxes that we're gonna Oh, for F I t Social Security and Medicare. Now, we already paid him. I shouldn't be. I shouldn't say what we owe. That's gonna be the liability related to this quarter. Then if we go up to the second port or down a couple lines here we've got, we're still on five e. This is the total fighters, Social Security, Medicare. And then we have in line six total taxes before adjustments. And that's our 31 8 40 20 that we just added up, adding up line 35 e and five F. Then if there's any adjustments down here, like if we're off at pennies because of rounding, they allow us to adjust for that, which is nice. So we don't have to write a check for, like, a penny. We can just say our adjustments off by a penny. So or a few pennies less than a dollar, hopefully and then we're okay. We're not gonna deal with them with eight or nine for current quarters. Adjusted for six pay sick pay current quarters adjustment for tips. So we're gonna remain in line 10 total taxes after adjustments. 31 8 40 Then we're not gonna have any qualified small business. So in our example, we just have line 12 total taxes after adjustments and credits. Still 31 8 40 20 cents. Now we gotta pick up our deposit. Sideline 13 says total deposits for this quarter, including overpayment, apply from the prior quarter. This is typically the most confusing part of calculating this form because note that this number here should be the same as this number. But this number of top it represents the liability. So we've re calculated the liability. If we were to interpret what we're saying to the iris, we'd be saying, Hey, this is our recalculation of F i t. So security and Medicare liability for this quarter this then, should be a calculation of what we have paid, meaning it should have already been paid similar to our 10 40 that we do on the end of the year for individual taxes. In other words, we create the 10 40 We didn't we come up with a number that says, Hey, this is the liability that we owe for the year ended and then we say, withheld from our wages, meaning what we've already paid is this amount. Typically, then we have a refund for most people if their W two employees, and that's because we paid a little bit more. That's how the desist systems designed. It's impossible, almost pretty much impossible for all practical purposes. For most people to have the 10 40 with holdings match exactly what will be withheld. So it's designed to have a little bit over and then get a refund here. However, because it's more of a flat tax, we can know exactly what will be paid and this is just a information returned. Then we're just saying, Hey, this is what we owed. This is what we already paid In order to get the supporting information for the amounts that already were paid, we could go back to the check register, would go back to the G l and see the checks that were paid In our case, we're gonna go back to the journal entries, so we had this check with paid going out of the checking account. This cheque was paid and these two dates are on 9 15 and 10 15. Which you might say This one happened in the third quarter and this happened in the fourth quarter. Note. What happened here, though, is that these two payments are still both applied to the third quarter. And that's something that can be confusing with payroll. Obviously, we made the payment here in October, October, November, December being part of the fourth quarter. But we should have applied it to the liability incurred when the payroll period ended in the third quarter. So we're gonna add these up now, when we look at this information, we did it all with one journal entry for all of the all of the tax liabilities, which includes what we need then of the O A S T i, the h I still security and Medicare, but does not include the Fouda and Suta those they're gonna have to be paid when we do the 9 40 calculation or accounted for when we do the 9 40 form, not the 9 41 and we need the f i t. So, in other words, we're looking for these amounts for these two payments. If we add these up. These are the amounts that we have already paid. They've already coming out of our checking account. So if we take out the calculator and see if we can add these up properly, we've got the 6063.1 plus the one for 17.98 plus the 8599.13 plus the 5961.61 plus the 1394.25 and the 8404.13 given us the 31 8 40 20 cents. So if we go back to our form than 31 8 40 20 cents matches the liability, So just note that this one here is the liability which were getting mainly from our register up here, our payroll information to calculate the liability. This down here should match because we've already made the payment. But we need to support this information by going back to the journal entry, uh, or the or the register in order to see what has been paid 29. 100 Payroll Controls and Documentation: In this presentation, we will talk about payroll controls and documentation exempt and nonexempt employees. It's important to know these terms because the regulations will differ depending on whether an employee qualifies as exempt or nonexempt. So, in other words, the employees that are exempt are not subject to the Fair Labor Standards Act, F l s a wage and hour laws. So, amongst other thought things in particular, the overtime calculation would not be present or not being needed or required for employers , given the employees who are exempt. So if they're exempt from that status, then they aren't required to have, amongst other things and overtime calculation based on the the federal law, the Fair Labor Standards Act. Now, why would that be the case? Well, if someone is exempt than typically, we're dealing with highly skilled workers, managers, executives, individuals who we would we would assume have their own basic negotiation abilities. Whereas the overtime calculation is typically there in order, Teoh, or one reason it would be there is in order to make sure that advantage isn't taken of workers who do not have a lot of other options and therefore I would have less choice in being able to are required to work long hours without added compensation, so exempt workers then would be workers that were typically be salaried employees. So we typically think of the higher level employees that manages the highly skilled workers to be salary based, Whereas the nonexempt workers were typically thinking of workers that would often the hourly based now it's not required. That may not be that necessary distinction. And there are some instances where someone has a salary based where we'd still want to calculate their hourly rate because we need to calculate overtime. But as a general rule in the rule, we will typically follow here. If someone is a more highly skilled or an executive, then they would probably be exempt and they would have a salary income. If someone is needing to be calculating overtime on and required to cap it over time and is not exempt, then that would typically be an hourly worker. Some other differentiations is the exempt workers typically going to have a college degree or possibly be more educated, possibly have more say or ability to make judgment calls within their employment within the profession within their job payroll records that the employees and needs to receive these, we're gonna be records that the employees required to receive from the employer. That's gonna be a copy of the time card and a copy of the pay stub. There's gonna be items that the employee needs to be provided with when we talk about the pay stub. Note that we could get paid with a check, a physical check or electronic Lee. In either case, the pay stuff will typically have information more than just would be on any type of paycheck are in normal type of check stub, including the Usually it'll have the net pay the growth pay for the time period, and it will have the deductions that were withheld so that the employee can get all the information of their of their time that they can see how much did they earn growth, How much was taken out, what was it taken out for? And the net check that they are actual receiving. They also typically will have on the pay stub of that information in terms of the year to date number, as well as just the number for this particular pay period when considering payroll internal controls. We know that they will differ from company to company will have more internal controls as company to grow because we'll need more controls in order to safeguard the payroll process , a process that can be subject to fraud. One of the major internal controls we always want to think of whenever thinking of internal controls is the separation of duties. We want to have some separation of duties so that if there is some type of fraud taking place that it should be more likely to be caught if the papal process has, ah separation of duties, not one individual who is in charge of the full payroll process. We also want to make sure that their documentation verifying verification of employees duties and that's gonna assign responsibility to the employees. We want to make sure that we can hold individuals accountable by well defining their task and then having them sign off on the task so that we can see and verify the task have one happened and to who is responsible for those particular tasks. Those should be documented. Common errors that a good system of controls can prevent are gonna be things like continued payment for terminated employees, or even a system where employees that are no longer there were fraudulently still getting a paycheck and possibly being deposited in a similar named type of account. If there's a separation in terms of the entering of the payroll data and the distribution in some way of of the pay cheques, then that may be a way to to help, to find out these problems, meaning, if we don't, if we have some type of verification in the distribution process of the payroll, as well as the entering of the payroll and the data input side, as well as stolen paychecks still on prior to distribution. So these were gonna be just a couple of things that we want to be able to safeguard against . And again, some problems could happen with payroll in that payroll being processed for employees that don't exist or prior employees possibly being deposited into bank accounts with similar names, those types of fraud that could take place, as well as just errors with the payroll never removing someone from the payroll records even after they have been terminated. Payroll documentation and retention. When considering the payroll documentation, we really want to make sure that we're holding onto the payroll documentation for a good while, probably longer than many other types of documentation, because we want to make sure that if anything happens later on in terms of payroll, we have that documentation. It is very possible for something that happened in the future and US toe have toe look into the payroll documents. It's also something that has a bit more complex city. Given the fact that we are withholding information and pain various sources on behalf of the employees, we want to make sure that we are in compliance with that obligation because if we're not, then we have a problem not just with not paying payroll taxes, but with possibly being charged with, um, taking money from the employees and not paying their responsibilities like we basically are required to dio. So we wrote, We want to be very careful with the payroll tax records. Now the taxes basically mandate a seven year recommendation, which a statue show statute of limitations for many other types of documents is like three years, possibly five years. So seven years is an extended period of time. It might be recommended to even hold payroll documents longer than that. And if there's a case of fraud, we should note that the iris would require documentation basically indefinitely at that time. So we definitely want to make sure that we're retaining the payroll records in a secure way for, ah, good time so that we can safeguard against any problems in the future. When disposing of papal records. We want to make sure we do it in a safe way in a secure way. And typically, that would include shredding or incinerating the payroll records to make sure that they don't said someone doesn't get ah hold of sensitive payroll information, including Social Security numbers and other sensitive data that can be used against employees, are in a harmful way. If we have the information in a database program, I want to make sure that once we get rid of the information that we have purged the database and completely I got rid of the information. So once again we can be certain that that sensitive information is not being taken, buy or stolen 30. 100: in this presentation, we will take a look at Form 9 41 within QuickBooks. Here we are on the home page. We have the open windows open. In order to open the open windows, you go that you drop down. It's like the open windows list. The form 9 41 is going to be one of the payroll forms. It's gonna be a quarterly form. And the nice thing about QuickBooks is if we're running, they paid version of QuickBooks. We can then generate the payroll tax forms. As long as we enter the data into the system correctly, then we should get a 9 41 that will be processed correctly fairly easily. The way we do this and again, we're in the paid form to do this. If you want to practice in the manual settings, then you can't do so. But you wouldn't be able to process the payroll forms with the manual or free version within the QuickBooks desktop. So to do that, there's a couple ways to get in there. I typically processed the forms by going to the employees up top and go to payroll tax forms and then process payroll forms and that'll take you into the employee's center. So we're in the payroll side. We're in the file forms. We're looking here at the form 9 41 So then we could just go right in here and process the form 9 41 again. Assuming that we have all the details into the system correctly, the paychecks have been entered correctly. We've got the correct dates in there. We correctly set up the settings in terms of the payroll items. And once that has all been done, then weaken Do the 9 40 ones now the 9 40 ones. We are gonna be quarterly forms. So when we think about the quarter ended, we could have a drop down over here telling us the last calendar quarter, which would probably be the most appropriate thing most of the time. That 3/4 there's three months per quarter 12 divided by 43 months for 1/4. So Janu, February, March 03 31 1 date. We're doing 2018. So March 31st 2018 would be the first quarter We were to run that. Then we have this detail Ah, within the forms. If I say next. Then we've got our our detail here and then it checking out the first quarter, and it will basically populate this information for us. What? We won't go through the whole calculation here again. We'll take a look at it when we process the Florence within this problem several times, so we'll be able to get a chance to see it. The point here is that we want to be ableto see what QuickBooks is doing to understand it enough to to give ourself a check and say, Hey, it does this look right? Does it look like it's doing the right thing so we can have some idea of QuickBooks spits out something that is that can't be right. We want to be able to go in there and recognize that be able to check it and see what is going on. So as we have these automated systems that start to process thanks and start to do things in an automated, automated way, then that's great. But we can't completely lose our ability, Teoh assessed. If what's being generated is correct to some degree, and what that degree is can vary depending on what the circumstances are. But to some degree, we want to be able to go through here and say, OK, do these numbers look reasonable and be able to make that assessment gonna close this back out? And of course, we can do the A similar type of process if we were to go back in here and choose the second papers of January, March, April, May, June 06 31 8 So the June statement and would be processing the's similar data and we would have for April, May and June for the second quarter of the year. And we would want to go through the similar information to make sure that everything is being populated in the correct format. We can then continue. And of course, if everything looked correct, we can finally submit the form, which is great. We can process everything here closing this back out, closing this back out. Now, if there was a problem, we even have the amended form the 9 41 X, so we can try to make adjustments if we need to. I highly recommend to check it before, because making adjustments is is not could cause problems. These one of the things. It's better toe. The old term is toe measure twice and cut once. If you're Carpenter, measure twice cut once. This is one of those areas where it's probably better to measure twice and cut once and rather than having to change things. So if we go back in here, not that I know that I've haven't changed things in the past. But if we go back 12 31 18 to the end of the year, December 31st and say, OK, then we've got our year in information. Similar type of calculation. There's gonna be the 4/4. Of course, we'll have to do this four times. Just won the show this one, because it's got this extra data down here because of the payroll information. And so we'll take a look at some of these forms and how these numbers are being generated in more detail. In example, problems 31. 110 Form 940: In this presentation, we will take a look at Form 9 40 which is the employer's annual federal unemployment or photo tax return. Here's an example of the form This comes from the I. R s website, which you can find at I r s dot gov. We've got the 10 40 currently for 2017. It has the same information up top that we see in the 9 41 which will include the E i N number. Ah, the employer identification number, name, trade and address note Over here. However, even though we have a similar looking box, it's not the same as we see on the 9 40 ones, because this is a yearly return rather than a quarterly return. So this box includes stuff. If we had to amend the returned or some other special circumstances like it, it's like the last return or something like that. Then we would select the appropriate items here. But this isn't a quarterly return that the thing we really want to remember here They sound very similar, of course, one because of the numbers and to because it's a payroll tax form. But the 9 41 is actually the quarterly returns that 9 40 if the yearly return. So it also seems kind of funny that the 9 40 the thing we do at the end of the year, has a number that's before the 9 40 ones that we do on a quarterly basis. Note that they're not related in many different ways. The 9 40 at the end of the year. In other words, it would be makes sense for us to think that the IRS would want us to make a 9 40 return 9 41 return quarterly for 4/4 and then re sum up that data again in the yearly return in this form. But 9 41 That's not what it's happening, however, There are actually two different types of taxes that we are dealing with for the 9 40 ones and the nine forties. In other words, really, what's happening for the 9 40 once is it's reporting our main taxes, meaning it's reporting F I t. Federal income tax, Social Security for the employer and employee side and Medicare for the employer and employee side. So my guess is the reason that we need to record that on a quarterly basis rather than on a yearly basis, is because of its significance. We're recording the main taxes there. The 9 40 on the other hand, which we only have to report at the end of the year, is only reporting the food attacks, federal unemployment tax, which is a much smaller tax. So, really, what's happening here is the irises saying, Hey, we're gonna give you some pity here and not make you report this on a quarterly basis, but instead just on a yearly basis. But we do want to see that quarterly taxes for the F. I T. So security and Medicare. So, in other words, this one lines up closer to what we think of and know of with our personal taxes, like the 10 40 that we have to file at the end of the year. That is also an information return that we would basically say, Hey, this is how much we owe. At the end of the year, we should have already paid it, and we file that one time. That's similar to the 9 40 here that we do for the federal unemployment tax. We go down to the calculations, then we got our registered data up here. That's gonna be our data from outward register. We will use then to fill out this form 9 40 were here in part one. So the 1st 1 says, if you had to pay state unemployment tax in one state only we're gonna pick the Nevada. Just pick a state here. Note here that you might think, Well, why do I need a state? Because it's a federal tax. Aren't all states equal win considering federal taxes? But notice that the food attacks is the law got kind of mixed up with the state taxes, meaning the food attacks is lower If you paid suit attacks, in other words, the state would have to have a suit, a tax law to pay the suta to get the lower rate for FOTA, which most states did and therefore, in essence, will have a lower rate of food. So when you think of food, we really are applying a lower rate, pretty low rate, but it's only applicable if we're paying suta taxes generally. And that would only be applicable if the state had a suit attacks. Which because of that requirement, most states do So we're just gonna pick a state here. That's why we need a state on the B. Says, if you had to pay state unemployment tax in more than one state, then we'd have to make sure that again. We kind of paid the suit attacks to calculate the food at the lower rate. And then two says, if you paid wages in state that is subject to credit reduction, so we're not gonna deal with that here either. So then we have the total payments to all employees. This is going to come from our earnings record. So we have the 2 41 206 from the earnings record. It's not gonna differ than, in other words, we may have different types of earnings wages. If we're talking about F I t earnings or for talking about O A S T I earnings, it could defer. We're just gonna take that total earnings, typically here for the Fruita earnings. Next thing says payments exempt from fruit attacks. In our example, we don't have any exempt payments from food to tax. Line five says total of payments made to each employee in excess of 7000. This number can be confusing because it's often not the number that we have calculated when we're calculating our payroll calculations. In other words, we didn't really calculate the amount that would be over the 7000 for each employee and therefore not to be used within the calculation for the food taxes, we calculated the number that would be included, in other words, the wages for food. So then we can use that to calculate what the food attacks would be. So we would already know the photo wages, and we would actually know what the food attacks was based on those fruit toe wages, which would be the food of wages, times the food rate. So what we're gonna do is actually skip down to what we know, and then we'll back into this number. What we know is this number line seven total taxable photo wages is 28,000. That means that this calculation these wages were the food a wages for all employees who reached that cap of 7000. So this is calculated as you keep on increasing the food toe wages until you get to that cap and then you stop calculating food or wages so note the photo wages will be much different than total earnings. It will be much lower. Most employees will reach that cap. The only reason they would not is typically or the main reasons they would not is if they were laid off sometime in the year and never reached 7000 or if they were hired towards the end of the year. Other than that, most employees will reach the cap. In our example, we had four employees and they all reached the cap of 7000. So we just have 7000 times four employees. 28,000 is our wages. Then we're gonna most by that times, the food to rate. And that's where we already have the food to calculation here. So in other words, we know this number already. Then weaken back into this number. If this is the future wages and these are the total wages, then all the wages above the food to cap is just the difference between the two or 2 41 2 of six minus 28,000. So that's 2 13 206 So then we'll kind of back into this number 2 13 to work six. So the iris wants is going to read it this way. They're going to say that we have to 41 206 minus 213206 to get the photo wages that we're actually going to use. And we calculated it this way. We basically said, Hey, we already already found that food, toe wages and we didn't know how much was over photo. So we know these two numbers 2 40 2 41 206 minus 28,000. And that gives us the 2 13 2 or six. Once we have that then line ate, says food attacks before adjustments. We're gonna take that line seven times 70.6 So we'll just take that calculation 28,000 times 0.6 That's the 1 68 and we would already have. We can already probably have that on our worksheet and knew that this will be a worksheet. Not part of the register register shows the net pay the gross pay to the net pay. And this is an employee er tax on Lee and therefore we need ah worksheet. That would probably be included. Teoh, the register calculation. So there's are 1 68 if we continue down to Part B or Part three that there's nothing import . Three. It's as if all the taxable food toe wages with you paid were excluded from T State unemployment tax. Multiply line seven by 70.54 In other words, if there's an issue where we didn't play state Suta tax, we would have to pay more Fouda tax because Fouda is tied to Suta. So if if we paid the state tax than typically we have this nice lo fu tau rate. If, on the other hand, for whatever reason we did not pay Suta tax, then we're probably gonna have to pay more for food toe. We're not gonna deal with that. In our example, we have been lying 12 food attacks after adjustments which will remain the same at 1 68 Then we have the deposit amount and just like the 9 40 ones, we have to make sure that we know the difference between this amount, the liability calculation and this amount which will be the amount we actually paid. They're going to be the same, but a number, but they're coming from different sources. This is us recalculating food, telling the Irish Hey, this is our food a liability. And we should have already paid it in a similar way that we already have paid our taxes when we report our 10 40 individual tax return at the end of the year. In this case, however, it should be exact because it's a flat tax, easy to calculate should offer to be paid. This, in other words, is just information return, not a return that's gonna tell us Hey, this is how much we owe and write a check for. So we're gonna get that from our payroll register and in this case are journal entries. So we're looking at a journal entries. This is when we paid payroll, we paid 17. 30 17,073 15 and then 3 16,048 um, for these two journal entries and we're picking up just the food portion in this case, which is this portion. So it's gonna be a smaller amount, of course. So it's the 1 25 38 the 40 to 62. If we were to pull out the trusty calculator and add that up 1 25.38 plus 42.62 We get 1 68 So that is our 1 68 And that's gonna be the amount that will go here on our food to return . It will match. It will be the same and therefore we won't owe anything. But we want to make sure that if we get audited, if they double check on that that this numbers are payments that we can go back and see if they have been paid. We can also see if they have cleared if they cleared that the the bank and therefore no if the if the IRS has deposited those amounts. 32. 110: in this presentation, we will take a look at Form 9 40 within. QuickBooks, Here we are on the home page. We currently have the open windows open and order. Open the open windows. You go to the view dropped down and the open windows list. We're gonna take a look at the form 9 40 This time the form 9 40 is a form that can be generated by QuickBooks if we have the paid version. If you have the manual version, you're testing it out. Can't generally run the form 9 40 within it. Although you can run reports and test things out in that format. Here we got the paid version, so we'll take a look at the form 9 40 processing. We can get in there a couple different ways. I typically go to the employees up top, go to the payroll tax forms and w twos and the and then good. The process payroll forms that's going to open up. The employee center were in the file forms section. Now the 9 40 remember is at the end of the year. Don't get confused with the form 9 41 It's going to be down here. And if we have anything, if we have everything in process for the payroll, if we said if the Pedro properly set up the payroll items properly, went through the whole interview section, set up our employees correctly and process the payroll correctly throughout the entire year and then the form 9 40 shoot process find by QuickBooks within QuickBooks, it's one that we often overlook because it's it doesn't only happens at the end of the year , unlike the 9 40 ones, which will be quarterly. So just remember the end of the year you got the 9 40 Uh, it's not gonna be a summary of the 9 40 ones. It's gonna be different because it's just calculating for the fruit of federal unemployment . So if we just double click on that or we can create for my like to just double click on it , I'm gonna put it for the year 2018 which is what we are working on and say, Okay, and we're gonna say, OK, it'll process that form for us, and again, we can go through this this process, but it's pretty self explanatory. Take to go through this, and it'll populate the numbers for us. If we have filled out again entire year's worth of payroll correctly, having setting it all up correctly, have an entire worst of years worth of payroll in the current system and then ah, having entered the data in the proper format so we won't go through all the numbers here once again. But we just want to note that we want to be able to look at the 9 40 at the end of the year and possibly do some of reconciliations between the 9 40 That nine and the 9 40 ones and the W two's just t be able to verify to ourselves that what is being generated from the payroll system from QuickBooks is looks proper. Looks correct. Ah, and again the the level of how much we need to do that it will, Very because part of the purpose of having payroll process it is that we don't have to read ejaculate the entire thing. However, we don't want to be completely to the point where we have no idea if what's being generated is at all correct, because then we're completely at the mercy of from the payroll forms and then the government if they were to question anything about it. So we want to be able to consider these and just have an idea. Okay, Does this is this reasonable? Does this look correct? And then if there's anything that is not correct, I have an idea of how we can go back and do some verifications. How can we check this out to the data within the system? To the reports Teoh to the W twos that we print that w three the 9 40 ones to get some very for verification. Some check figures within it, but we could go through this and again. This is going to be at the end the year weaken. Go through this process, and it will help us basically generate the 9 40 Once complete, we can then go ahead and submit this information within the QuickBooks system again. Of course, within the paid version of QuickBooks 33. 120 Form W 3 & W 2: in this presentation, we will take a look at form W three and form W two. Here's a copy of a form W two from the I. R s website, which you can find at I r s dot gov. This is just a demonstration form. And of course, the W two is a form that most of us are most familiar with. A form that we see a form that we get as employees at the end of the year. Ah, form That tells us how much we've earned and the with holdings we have so that we can then use it in order to fill out our responsibility. Our individual form 10 40 at the end of the year. If we go through this from an employer standpoint, it's important to note what the form W two is saying to us and what they're doing on their side. One. It is, of course, reporting to us, our wages and what was withheld from us and therefore I form that can be used to fill out our tax return. That's one major purpose of the form. It's also form that they're going to be sending not only to us but to the I. R. S. And that's important to note as well, because the iris is really not dependent on us to report our information. In this case, for the W two, they already have it. They have a copy of the W two, which is given to them by the employer is required to be given to them by the employer. So whenever you get a W two and 10 99 for that for the same which is similar, you gotta note that this is not only telling us what we've earned, it's also telling us Hey, this information is reported in this format to the IRS. If you report something differently, even if you believe it, be correct as different. You're gonna have an issue with it because the iris is really just matching what you report to what we report here. So that's the first thing T note with the WTI that we want to make sure that we have a good understanding of if we go through the components of the W two. We, of course, have the employer identification number. The E I N number needs to be recorded every time we have some type of payroll information for the IRS. We got the employer's name address. We've got the control number. Then we have the employees, first name and initial last name and the employees address. Then we go through the points where we will spend most of our time looking at the actual reporting of the numbers. We're most familiar, probably with the first box, which is wages, tips and compensation. Note that this box, however, is not the best representation of total wages because it will be reduced by things such as a 41 K plan and possibly a cafeteria plan. So when we look at the total wages, when we try to say, how much do we earn throughout the year, most of us will go here and look at Box one, but it's not the best representation because it's probably lower than what our total earnings are because they've been reduced for the calculation of taxes by things that are not including the gross income for tax calculations. So we'll look a little bit more of that when we put the numbers here in box to, of course, is the federal income tax withheld. We have withheld taxes. It's been withheld from US, meaning we've made payments throughout the year for the employees now. We didn't actually write the check, but the employer was responsible for taking the money out of our wages and pain for us. Then we have the Social Security wages, and this could differ than from Line one, and it could differ based on hitting a cap for Social Security. And it could be differ based on something like a cafeteria plan. Then we've got the Social Security tax withheld, and then we have the Medicare wages So the Medicare wages could differ from lines one and three based on one if there's a cafeteria plan and to there's no cap. So this one Line five is probably the closest to our actual wages of the three wage categories. So if we're gonna look at the W two and try to figure out what we actually got paid, what we're actually earning Line five might be the best or closest to. It Still might be low by, say, the cafeteria plan. If there is one and then we have the Medicare tax and then we have the sole security tips. What? We're not gonna get into too much as allocating tips. What? We won't be dealing with tips here verification, code dependent care benefits, non qualified plans. And then the, uh, the whether or not we have a retirement plan here. So line 13 is whether we have a retirement plan. Box 12 We're gonna go over. Some of the things that could be exempt typically are kind of things that could be in box 12 including things like a retirement plan that would be coming out of box one and a reason that Box one would differ than, say, Box five. And we could have a cafeteria plan that would be reducing pretty much all three of these items if it was qualified to do so that we would indicate down here that would be an informational format or informational purposes down here. Then we've got the employer state I D number, which we're not gonna spend time with here because it will differ from state to state. But then we have to state wages, state income tax, whatever the state law is, and it could mirror the format that the Fed has, or it may be typically a little bit more simplified than the Fed s, so it could probably be similar or possibly more simple, simplified up sometimes. But if changes from state to state and in local wages and local taxes note the W three, in essence, has the same stuff here. So we've got lines 1 35 to 46 wages. So security wages, Medicare and then federal income tax if I t. So security tax and Medicare tax. And that's because the W three will just be summing up all the W twos. So if you think of all of our employees like is one big conglomerate thing of oven employees, then they then the W three would basically be reporting all of their stuff all of their wages in one group. So it's going to sum up in other words, the W two's. That's mainly what we want to get on the W three and is gonna leave the W three at that. We'll do a little bit of a calculation for this now. If we had the earnings records for it in this case, four employees here Anthony, Cindy, Jill and Judy. Then we're gonna take this data and create the W twos from it. So this earnings record will have one for Andy. We got the total earnings. We've got the O A S T i earnings, which in this case, we're gonna be the same except for Judy, which differs because Judy reached the cap and the cafeteria plan is not There's no cafeteria plan reducing these, So they're the same for her and other employees. Then we've got the FOTA wages, which isn't gonna be on Fruita is not on the W two because it's an employer tax suta as well Food and suta. And then we got the OSD. I we've got the actual amounts that were taken out of each employees checks And then we've got the H I Medicare taken out of the each employee's checks and f i t the amount taken out of each employee's checks insurance, which is not a cafeteria plan not qualified to reduce net income taken out and then union dues and the 401 k which will be a reducing federal income tax and then the net pay. So these are our totals. We're gonna then go through each of the deputies pretty quickly. So here's just a copy of a W two. That's kind of like a simulation form, and we would take that information and fill out Box one. Wages and compensation, which would differ in this case from Box three, is different from Box three, in this case from the retirement plan that was here. So the difference between the 20,008 12 50 the 19 7 16 96 85 can be seen in 12 a indicated by a code, which should be the retirement plan. And it's also indicated here that we have a retirement plan now. If there was a qualified cafeteria plan, it could be down here with a D D, which would, which would be just an informational piece as well. But ours isn't a cafeteria plan. It's just a note that, uh and then we So we've got the Social Security, and then we've got the Medicare wages. These two are the same because this employee hasn't hit the cap, and therefore these two will be the same note that this number's probably closest to the actual earnings of this employee, then the federal income taxes. Based on these wages, the Social Security is based on these wages note. The F i T can't be derived directly from these wages because it depends on the amount of exemptions and all that, which will be calculating on the form 10 40. This one, however, should be, ah, flat tax, so we can actually see that the 20 81 20,002 810.5 times 0.62 is this 1000 to 90 and we can see that this 20,000 for Medicare Times 0.145 should be the 103 78. So these two, we can actually re calculate this one. We cannot. And so that's gonna be the first employee second employee Similar. We've got the wages in box one differing from Box three for Social Security and Medicare. Because Box one is being reduced by the 401 K plan, which we can see in box 12 A then sold security and Medicare will be the same because this employee did not reach the cap. F i t. Federal income tax being calculated based on box one. But we can't see a direct link because of the complexity and the f i t. Federal income tax, Social Security 6.2% Medicare, 6.2% of box three and box five, respectively. Same thing for our third employees. Fox one differing from Box three due to the retirement plan in blocks 12. And it being this box three, same as box five. Because this employee didn't match the cap. Same calculations box 24 and six, then our last employees a bit different. This is our high earner here. This is Judy Jones. Uh, she has wages in box one, differing from box three. Social Security wages differing than total compensation one because Box one has the 8000 7 50 for the amount that was in the retirement plan but also because she hit the cap, which is at 1 28 400 So if we start to see higher wage individuals, this one's just going to stop at whatever the cap is. In this case, it's 1 28 400 So, notice of these three numbers, they're all differing. The Medicare is probably the closest to what the actual earnings are because the Medicare does not have a cap and is not being reduced by something like the 41 K or retirement plan that if we were to add all those up, then this would be Box one wages. If we were to add up all four boxes for our four employees, this would be boxed three wages. Social Security wages for four employees, Medicare wages for four employees, federal income tax for four employees, which cannot directly be tied to this number because it's too complicated. Social Security, however, and Medicare can be calculated on ah total basis as well, meaning the 1 94 66 times 660.62 gives us the 12,065 57. And if we were to take the 2 41 206 times two point over 145 we get the 4 3097 there, so these two we can calculate because they're nice, flat taxes. 34. 120: in this presentation, we will take a look at forms W two and W three within QuickBooks. Here we are on the home page. We currently have the open windows open. You can open the open windows by going to the view, drop down and selecting the open windows list. We're gonna take a look now at the W twos and W three is thes again. You're in forms that can be processed within QuickBooks if using the paid version. If you're using the manual version, you won't typically be able to process the W twos and W threes, although you can enter the payroll and practice with it and then generate reports which could then be used to generate their creator and make the W twos and W threes. So there's a couple ways to get in there. I'm gonna go to the employees, drop down and go to the payroll forms and a W twos process payroll forms, and then we're going to go into the employees center or it will open for us. We're on the employee tab. The file forms tab. This is, of course, the paid version where we then have the ability of the process the W two and W three within it. It processes great as long as everything is going to be set up correctly. As long as we set up the beginning items correctly, these the lists, items, the payroll items, processed, all the checks in the proper format, and then everything should be okay. We and if there are any issues in terms of us voiding checks or deleting checks, if we had to start the payroll in the middle of the year and there was payroll before that , that's not in the QuickBooks system. These types of things, of course, will cause problems when running the year end reports. But just if everything is put in smoothly and we were able to enter all the data in which should be the case, If we're running an entire year of payroll and it's not too complex and we didn't have to avoid any checks or anything, then the W two and W three should process fine. We can take on this and going to create forms or just double quick on the W two and w three , and I'm gonna change it to 2000 and 18 and say OK, We only have two employees in our system here, but you'll note that I'm just gonna review and edit for now. It's going to generate this information for us, and we can go through here and it'll populate most of the information as we go when we can basically check through this if we go to the next item. We've got our two employees, Judy and Anthony, for this payroll for the year. And then here's the information for Judy, and we could see this is kind of like a fill in form, but it should look familiar. As a W two form. This is gonna be the W to the data that will be used to generate the W 24 Judy. We have the wages, Social Security, Medicare, which is these all being different. And this is a huge benefit to use the payroll calculations when the payroll is complex. For example, if we have an employee that hits the cap, then the deputies all of a sudden become a lot more complex where the Medicare is going to be different than then. The total wages, for example, if there's gonna be a 401 K plan or something like that. A retirement plan. Then payroll starts to get more complex. Even if there's only two employees as there is here, then we have the federal income, the self security in the Medicare, which should look familiar. Other information will discuss more of this, this information, but just note that this has to do with a retirement plan retirement plan. Just note that it is. These tax of information, of course, is what we're really paying for. One of the things that we're paying for, because this is part of the complex city as well as the state information down here, because that'll differ from state to state. So that's just it's easier to federal up for the federal forms to be standardized. But even if we have that down when we go to state to state, then that's gonna add complexity, especially if you're in a state that likes to have different taxes, like California. Then you got to keep up to date on that stuff, and then we'll talk more about these items as well. But if I go to the next, this is our second to employees. So this is Anthony, and so we have the wages here against Social Security different from the f i t wages. And so it's helpful to see that these items being affecting the tax. So if you have complex items such as a 41 K or some health insurance or dental insurance, then these. These are going to be useful for QuickBooks toe help to populate W to correctly the S S D I for the California again and California taxes gonna go next to the W three. And the W three is very nice. Even if we have a couple employees to be able to use software for as well, it's just being really a population of all the W twos. So here we have it filled out for us. Box one being some of the two employees we have in terms of their W two's now here on the W three. Same with box three in Box five for the wage wages and then the federal income tax withheld Self security, Medicare. Same thing we can. I kind of think of this is just as if all of our employees were one employee and we had it all reported on just one line item that doesn't work fully because obviously the calculation for the federal income tax, for example, wouldn't work in that way. But that's one way kind of it kind of works to think that way. So this is a summary of all the box to on the W two there. Okay, so then the deferred compensation and the same, of course, for the state. So the W three summing up all that data very, very nice at the end of a year to have a system to help with that in some format or another again this year, only having two employees. It's still being very, very nice to have a system that will help to generating process. The W Tuesday they're going to be necessary, that numbers that will be necessary for them and the W three summing those up. We need to note, though, that it's only as good as the information that we put in the system, and we want to be able to basically double check this and look at see if it looks reasonable, possibly compared to the 9 40 ones. T make sure that the numbers are looking reasonable and what is being reported on the balance sheet and the income statement to see if everything is looking reasonable within the system if it's not able to troubleshoot what's going on. 35. 130 Reconciling Year End Payroll Forms: In this presentation, we will reconcile our year end payroll forms and, in essence, double check vet. They've been filled out correctly, So we have here our forms 9 41 and the W three. These are the two forms that we can use to reconcile each other and make sure that the two forms have been filled out correctly. We can double check, in other words, our quarterly form by tying it out to the W three and vice versa. Check the W three to the quarterly forms. Remember what the's quarterly forms are doing is there are calculating the three main taxes , which are the F I T federal income tax for the employees, the Social Security tax for employees and employer, and the Medicare tax for employees and employers. This is gonna be done on a quarterly basis. So we've got January, February, March, April, May, June, July, August, September, October, November, December or quarter for work, or 3/4 to quarter one. The W. You three, of course, is just a yearly form that will be reported at the end of the year. Summarizing all the double YouTube is that we send to both the employees and the I. R s. So what we can do is double check these forms because we can see here on the totals. Here we have the total wages, soul security and Medicare wages, as well as the calculations for federal income tax, Social Security tax and Medicare taxes, which have been withheld. So to do that, we're gonna try to match these out. Now, what we don't show here is the 9 40 than that form 9 40 which is the year in form. And that's because it's reporting Fota, which is just a tax for it's an employer only tax and therefore not reported on the W three . It is possible for us to kind of compare the food of wages, but we still have to do some reconcile ing to make sure that we're picking up the correct wages on food on the food, a form which is a yearly form the form 9 40 So common misconception would be that the quarterly forms that 9 40 ones. The iris wants us to report everything quarterly and then summarize that same information again on the yearly form. 9 40 Not necessarily the case that forms 9 40 ones report the three main taxes, the big taxes, the F I T federal income tax, Social Security and Medicare, which the IRS wants to see on a quarterly basis. Whereas the Form 9 40 reports attacks. That's usually a lot smaller FOTA federal unemployment tax and therefore the iris is happy or content enough, I guess, just to see that reported on a yearly basis rather than on a quarterly basis. So they're actually two different things. We're reconcile ing there. So if we look at what we have is we have quarter three and quarter four in this example, we only have 2/4 rather than 4/4. And that'll make it a little bit easier for us to show how this reconcile in process would work. If we had 4/4 of data. Then, of course, we were just at of the 4/4 of data. So in the 19 forties, over here this box box to is the wages and tips box and these are really wages and tips for F I T. Calculation. Meaning this and this for the 2/4 should add up. Teoh this box one. So if we were Teoh tie this out to double check everything. At the end of the year, we're gonna say, OK, but 914 to 5 point wound plus the 135909.9 should add up to the to 27 +335 and you might even have been subtracted. Sometimes two to seventh UH, 7335 minus That should go to zero. So that would tie out. And then we're taking a look at the federal income tax withheld Box three should tie out to the federal income tax box to on the W three. Now again, you can't tie this number to this number because it's too complex because it'll change by employees, but we can sum them up and double check that way. So again, it's not flat tax, so we can't do a simple calculation from the wages to the tax. We can take the 17 of over 3.26 plus the 25212.4, and that should give us to 42 to 15 66. If we subtract that 42 to 15.66 back to zero, then we'll take the social security wages. So we have the social Security wages here and here. Vecchia tile to sell security wages here on the W three. So if we're Teoh had the Social Security wages up, we're adding the 96973.5 and the 97632.5 to get the, um 1 94 6 So six. So if we subtract out what we have 1 94 6 So six back down zero and then we're looking for the Social Security here. Now, this is where it gets a little bit complex. This is the actual tax. And, uh, this could differ from the tax that we're going to see over here. So let's see why we're gonna add up the one to go to 4.71 and down here, the 1 to 1 of 6.43 And that's gonna different. It will always differ, by the way, the 12,065 57. Why? Because we multiply this by twice the amount. This, in other words, is not 570.62 but 0.1 to 4 or twice the wages. In other words, it's the employer and employee portion. So if we take this amount and divide by two, we'll get just the employee portion, which is what Sport reported on the W twos in the W three. Same is gonna be here. So this is the Medicare taxes on these two lines. If we add those two lines were going to say, That's the 96973.5 plus 2144232.5, giving us the 2 41 60 to 41 206 So if we subtract that out 2 41 206 back down the zero and then we're going to the same calculation for Medicare wages. So we will add those to, uh okay, So that's going to be and hit some funny there in Russia to 812.23 plus the 4182.74 That's the 6994 97 again, that's going to differ from what we have here, because we see this rate of 0.29 which is really twice the rate that we typically what probably no 0.145 because it's both the employer and employee portion. Therefore, if we take this number and divide by two, we're gonna get there 4 3097 which is the number we want the 4 3097 These are the numbers that weaken generally reconcile. In most cases now, there may be some reasons why these numbers would differ. And if there were, we'd want to make a reconciliation and know exactly what the differences are. So when questioned, if questioned, which we quite possibly could be by the IRS in terms of some type of audit, we could give responses to any kind of differences between the W three and the 9 40 ones. Remember once again that we're talking about. We only had 29 40 once here because it was our first year of operations, our first year of payroll, and we only had 2/4. If we had 4/4 we would have to add up the 4/4. Then we're having the Form 9 40 which we can't tie out as neatly with with the other forms the W three and three W two's. Why? Because the W threes and the W twos are employee taxes and this form is an employer tax, and they don't tie out also to the quarterly forms at 9 40 ones. Because those report different taxes, they report federal income tax. So security and Medicare. So but 9 40 ones do report some employees, er taxes that are portion the employer portion of Social Security and Medicare but doesn't report the employer attacks of Fouda. This is the only if tax form that reports the employer attacks of photo. We can, however, look at the total payments for all employees, the total compensation, and try to reconcile that in some way to the amounts that are on the W three and UH, 9 40 It may not reconcile exactly Teoh any particular box. It be closest to box to the Medicare box on W three, but it could differ by a cafeteria plan, but we can reconcile that difference and know what the difference would be. Between the total payments here and the Medicare calculation on Box three of the W ah twos in the W three and Box three of the W twos. And the W three would, of course, also reconcile to adding up the nine forties, which we just did on a Box five C in part one 36. 315 Payroll Calculations: in this presentation, we will take a look at payroll calculations. We're gonna start off with the comparison of annual salary to hourly salary. This could be important when discussing and considering what type of salary to have and the comparison between the annual rate and an hourly rate. If we're given something like an annual rate of 50,000 year and we want to break down Okay , what is that? In terms of basically an hourly rate, we can take the 50,000 and then divided by. And this is the key 52 weeks in the year. Rather than doing something like trying to divided by 12 months, remember that 12 months is gonna be a little bit less accurate. And just because of the way timing is, it's not perfect. That's why we have the calendars a little off. Got the leap years a little off. Ah, but 12 months is gonna be more inaccurate than using that weeks in a year, which would be 52 a bit more accurate. Teoh. Use the 52. We do want to know that number for payroll calculations. There's 52 weeks in a year that would give us the 961 54 per week Note that this is rounded typically gonna be rounded toothy penny when we're talking about payroll Ah, and s so just be careful of that when you have it in Excel Excel will even though you see it rounded to the penny use whatever number is actually in the cell when making calculations. So be careful there if we then take that and divide by 40 the 40 hours in a week and that would give us the hourly rate of $24.4. Now, of course, if we had any kind of calculation where we had a $50,000 a year and we were agreed to work some other a number of hours other than 40 like 35 hours or something, then we can divide by 35 we get our hourly rate in the similar fashion. So, of course, the calculation 50,000 divided by 52 weeks in a year, gives us 9 61 53 8 right, rounded to 54. If I used this ungrounded number and then divide by 40 hours in a week, I get 24.384 blah blah, 24.4 So just be aware of that rounding. Now we'll take a look at a commission. That situation. I remember that a commission basically just means that we're gonna get paid based on sales , typically. So our sales number, whatever the sales number is, we will typically get a percentage of that. And the point of the commission will be to try to get people, of course, to be more motivated to create sales. So there's going to be pros and cons to a commission based system. Ah, the pros are gonna be that more people are motivated to spend their time more productively to make sales if they're going to get paid based on a commission basis. The downside to that is that we could have sales situations. Where are more sales driven and people feel more pressured. So if you're in a type of industry where customers don't want to feel pressured or think the sales fourth, maybe to pressuring or having problems between sales individuals, then the commission based can't have some problems there. So pros and cons with the commission also note there's pros and cons in terms of how do we deal with that minimum wage again in terms of commission? Because if we don't have the hourly salary, we need to make sure that, in essence, we're over the minimum wage. Through the commission, Teoh comply with minimum wage requirements. But the Commission is pretty straightforward. We will take the sales amount times. Whatever the commission rate is, if it's 5% if we're gonna pay 5% Teoh whatever sales were made by an individual, then that would be 3000 in this case. Now we'll take a look at a pay base based on piece rate pay, and that's gonna be the concept that we're not gonna pay people based on just hours. We're not gonna be basing on the sales because if they're not in the sales area, but we may still want to base our sales on performance. And one way to do that is to say, if we're making things how many things were made, we will pay by the units that were produced, So that's gonna be ah, pretty traditional type of payment method. How many units were produced will pay by units produced so units completed. If we have 50 units completed, whatever the rate then per unit for saying it's $12 per unit 50 times 12 would give us the 600. Then there's pros and cons to this kind of pay rate. It only really applies. Given situations where we're actually producing units and typically units that are all the same, we want units that are all the same in nature. If we're dealing with areas where we're have more creative type of units or the quality could defer ah, lot within units, then this method could have problems. The downside being that people will try to produce more units of lesser quality to try to get paid more, that's gonna be the type of incentive. So if we're making all the same units that have to pass a similar type of quality assurance thing and they're all the same, then this method could be a useful method. The benefit of it, of course, is that if we pay just hourly, then the tendency, just the incentives that are there are for people to spend less time being being productive because it doesn't pay anymore to be productive. Eso the pro the benefit. The gold here would be Teoh. Have people spend their time being productive and pay the more productive people more money through this system? Another problem, of course, though, is that since we're not paying just on hourly rate, it's difficult to apply rules and regulations like the minimum wage. So once again, we have to be careful here to make sure that we still need to track, in essence, the hourly rate so that we make sure that they payment is qualified and over in compliance with minimum rate wage requirements, which are not going to be based on units we produce. Because that's gonna differ from company to company, the minimum wage will typically be based on traditional our hourly type of pay. 37. 320 Overtime Calculation: in this presentation, we will take a look at overtime calculations were first gonna look at a time calculation to consider the fraction of ours. Time seems like a fairly straightforward thing to calculate, however, because it's based on 60 minutes in an hour. We have to have that conversion in order to do many types of calculations. In other words, are rates in payroll are usually not in terms of rate per minute, They're typically in terms of rate per hour and therefore any types of minutes. If we have fractions of hours, we have to convert them from minutes to fractions of hours. So to do that, if we have an employee that worked 45 minutes, for example, if we had that 45 minutes, we divide that by the number of minutes in an hour. 16. That 45 divided by 60 would give us the percent of your time, which would be 75. That would be the percent of an hour. So 7.75 oven our now. This, of course, is important because when we haven't rate, we don't want to take our hourly rate in multiplied by 45 minutes. That won't work. We have to multiply it by 450.75 hours. Now, if we're considering overtime rates, then typically we aesthetic of overtime. That normal overtime rate would be a time and 1/2 time and 1/2. Now, when we consider time and 1/2 we have to consider what that means. So if we're saying that we pay someone $10 an hour times time and 1/2 we could calculate what that is is basically a 50% increase. And over time you can think of you got a 50% raise so you could calculate that times 500.5 , another 50%. And that would be $5 plus the $10 that would be $15 time and 1/2 the other way. You can think of it, of course, if if you have to $10 times 100% which would be 100% or one and then another 50% which would be 50 so 150% or 1.5 or time 1.5 0.51 point 550%. If we move the decimal two places to the right, that gives us our $15 so time and 1/2 150% of the original pay rate. That's what we're gonna get. Typically, that's the typical overtime calculation. Other rules can apply to overtime in that the federal law basically means that we can't go over the 40 hours. Anything over 40 hours, in other words, would typically be considered over time. If the employees is subject to overtime wages. However, many states also imply or impose of law that says that anything over eight hours in a day needs to be paid overtime wages. And let's just consider that rule eight hours in a day s O that we can see how over time might be thought of. It's pretty straightforward. Teoh. Look at it in the individual case. But again, if we start to accumulate a lot of data, they start to get more and more complex. So, for example, on Monday, if we had hours worked, 7.5 hours worked in the day, then we're just gonna say seven point for it. Five hours is all regular hours, and there's no overtime because we're not over eight hours Tuesday for saying that they worked 8.5 hours, which would be eight hours and 30 minutes. If we convert, you know 0.5 to how many minutes? 30 minutes. We're going to say that that's eight hours of regular pain and 0.5 hours, 30 minutes of overtime that would have to be paid at the overtime rate that, if we had Wednesday, were saying nine hours. That, of course, would be eight hours of regular pain. And then one hour of overtime Thursday were saying eight hours. All of its gonna be regular pay. No overtime. We got Friday. We work total of 9.5 hours. According to the time sheet, we're gonna say eight hours of it is regular 9.5 minus eight would be the 1.5. So that would be the totals here, then the 7.5 plus 28.5 plus the nine plus eight plus the 9.5 gives us 42.5. We know that the regular pay is that 7.5 plus eight plus eight plus eight plus 8 39.5 and then the overtime is the 0.5 plus the one plus the 1.5 or three hours, we can calculate that in two ways. We can, of course, take the 20.5 0.5 plus the one put 1.5 for the three, or we can take the 42.8 minus the 39.5, meaning this is our total hours. This is our regular hours. These then will be our overtime. Or, in other words, that regular hours 39.5 regular hours plus the three OT hours overtime gives us our total hours of 42. Now again, we're applying on eight rule a day type of limit. Hear anything over eight hours a day would have to be paid time and 1/2. That's our assumption. If, on the other hand, we're just talking about a 40 hour work week, meaning anything over 40 hours would be over time, then we would just take the 42 5.5 minus 40 to get 2.5. So you just got to be aware of what the overtime regulations could be. It could be on a weekly basis where we would take the the total per week I'm subtracted from the whatever requirement would be and in this case, 40 to give us the 2.5 overtime or if we haven't some type of daily requirement, whatever that daily requirement is. And it can be note that companies do have a decision if they want to pay overtime as well. So they have to comply with the minimum regulations, which which would be federal regulations and typically the state regulations being some type of higher limit. And then they can apply whatever they want in order to incentivize people to work overtime and it So it could be whatever the overtime law is, so just know the theory of it and then be able to apply what if ever it Maybe it might be a weekly rate, which can be nice because some people would prefer and you can give options. If you are an employer and you have something like a 40 hour weekly rate and then anything over that would be over time, because then you can tell people Well, how about you only work a few like less days a week, four days a week at a higher number of hours, more than eight hours a day, and you get to that same 40 hours, whereas So if you work four days a week for, like, 10 hours a day, then instead of five days a week, you get a whole another day off and put four days at 10 hours. Many employees might like that better, even if they don't get to paid the overtime. So it's note that, huh? A daily limit. While it could help people to not be working too many hours in it in an individual day, it can have some detriments as well, by basically preventing employees from possibly having options to work different type of pay schedules that they would enjoy working. So there's pros and cons, whatever that. Whatever the payment structure is, though, note how to put that in place. Note that the daily method is a little bit more complex as well. It's not that hard in any individual day, of course, but as we start to compile data for long periods of time for an individual employees and long periods of time for multiple employees, it could start to be more complex. Next, we want to look at a standard type of rounding system. Note that if we're paying someone hourly. Typically, they're gonna be logging in and out of the system, and the system will just time stamp whatever they log in and out of it. So if we have a digital system or some type of time clock, we can imagine the old time clock with a punch in. Or if we have a time clock, that's online. Then we check in and out. Clearly, it's not gonna be exactly on the hour. So if we if we, for example, going at 903 a. M and punch out at 105 p. M. Well, what do we do with those those minutes? Typically, we're going to round two like, Ah, 15 minute type of estimates. So every 15 minute type of vestment, because that'll make it nice and clean for us to do our payroll calculations. So here, basically around nine Teoh around one would be four hours burnt 9 10 11 12 1 And then, if we are going back from lunch, 1 30 about 1 29 1 30 then we leave at 5 25 Then again, this is close to If we round this up, Teoh 1 30 it's gonna be close to 5 30 So we're typically going to say that that's gonna be 1 30 to 5 30 and therefore four hours now again, different companies might have different types of conventions. And you could argue, well, that if this is the case, people have an incentive to come in, you know, a few a few minutes late or leave a few minutes early. But typically, if we're talking about a few minutes, it's not gonna affect behaviour too much, and therefore, that's typically going to be the rounding type of convention we can use in our time sheets when calculating number, amount of time at the end of the time period in order to calculate our payroll. 38. 330 Payroll Register: in this presentation, we will discuss the payroll register and what is included in it. The payroll register is gonna be one of the most important types of documents that will be used in order to track record and accumulate payroll information. It will include broadly broad categories, including the wages, the growth pay growth pay being paid before the deductions. So, of course, that's not the Net paid. Not what we actually receive as paychecks then will record the deductions in the payroll register and then the net pay what we actually receive as a paycheck and disbursements. So the payroll register is gonna start to show us some of the complexity in paid role notice that no one component of payrolls that complex whenever we think of payroll laws and types of laws that relate to payroll taxes. When we think about it in an individual case, it doesn't seem too overwhelming. We could say what we can apply that individual law in an individual employee for an individual payroll. But when we start to apply ah, lot of different sim fairly simple laws to payroll, we can see that it does start to build up the complexity and the calculations in just the amount of data that we need. And we start to see that when we build the payroll register, so we'll go over just some of the data that will be included. And then when we work a problem, we'll see that the payroll register and how to do some calculations with it. So first we need the marital status. Why? Because the marital status is going to be needed in order to calculate federal income tax, which is a progressive tax system in a marital status. Married or single is one of the components to that number of with holdings are gonna be what also gonna be needed for federal income tax calculations, salary and hourly rate. So clearly we will need the rate there so that we can calculate the wages that will be there for if their salary or hourly number of regular hours worked. So we're gonna need the hours worked in the hourly rate in order to calculate the regular rate, and then we need the number of overtime hours worked, however, that be calculating whether it be based on a 40 hour work week or a 40 hour work week and an eight hour day. We need to break out the overtime, our list and the regular hours. Then we can calculate the regular pain, that being the regular pay rate times the, um, regular pay hours. And we can calculate the overtime pain, that being the overtime rate, usually time and 1/2 150% of the regular rate times the overtime hours. Then we want to the growth pain, which will include the regular pay plus the overtime pay. Do you get the gross pay? Meaning the amount we would get, if not four deductions, including taxes and other types of deductions. Then we have the federal income tax. That's what we're gonna have to with hold on. So and that's gonna be a bit difficult of a calculation that are working probably the most difficult calculation in our worksheet, because we're gonna need to know marital. There's a few things to take into consideration. We need marital status, We need the number of exemptions and we need the pay period that is involved. Is it monthly? Bimonthly? Is it weekly? And then we need to look up based on that information. What the federal with holdings will be now. Of course, the computerized system can help that process a lot. But as we look at the manual process, what's actually happening? It's It's a pretty complex system to do by hand. At least then we have the Social Security, and also not just to do by hand. It is a lot easier to do with a computer, of course, toe. Look up this information, but to explain it, to be able to understand it for an employee to know what's going on, then it helps to to see the actual process, what's actually being used. So we'll take a look at those calculations. The most complex thing will probably do. Social Security taxes, then, is something that we need to withhold, and it's a lot more straightforward. People probably don't understand Social Security as well as federal income tax, because whenever we think of taxes, we typically think of 10 forties and income tax. That type of withholding and the soul security is another form of tax, but it's going to go into a separate fund. It's still going to the Fed separate fund the taxes a lot more straightforward, however, because it's gonna be a flat tax, in essence, So we're just in for the most part, is gonna take the wages. The growth pay times a flat rate. Generally, it is currently around 6.2, but percent. But the rate doesn't matter. That's not really what you want to memorize as much as the process, the rates easy to look up. What we need to know when with regard to taxes, is what type of tax is being applied and then just look up the rate and apply the tax that is being applied. And this is more of a flat tax. Medicare with holdings will have to with calculate that as well, based on grows paid times, Medicare. Same thing. It's more of a flat tax that's easier to Dio will just take. The girls pay tens the rate, which is currently, I believe, 1.45%. But again, the percents not as important, you need to know Well, it's just basically ah, flat tax based on the gross pay. So whatever that rate is easy to look up. We just take a flat tax much more simplified than doing the federal tax, which is a progressive system. And then we have the estate income tax withholdings that will differ from state to state. Now, if we're in a different state or even a different country than all we need to know is what ? What is that state applying again? There's no new taxes under the sun. Typically, the question is, Are they applying some type of progressive tax rate where we have to look at the tables and take into consideration different factors or they apply in some kind of straight tax rate? Ah, flat tax, where it's a lot easier. We just take the gross pay in, multiply at times with holdings. So whatever they're using, usually the state won't will either copy the Fed in some way. Ah, and you use a similar system or, um, use a simpler system of flatter tax, other state taxes, local taxes. Again, These will change from state to state and location, toe, live location. Ah, for a one K or other retirement plan, this is gonna be a benefit now. So, um, these air things that a company may choose to offer or UN employees may choose to participate in or not. But when we give the growth pay. Of course, when we give the pay check out, we have to subtract this out because we're gonna pay into the 401 k for the employees and give them the net check. And that's kind of like a benefit to the employee, as opposed to you might think the taking the self security in the federal tax and the Medicare is a requirement. So offering the 401 k and offering to take it out of of the check and put it into some type of retirement plan for the employees is a benefit. Those are good things for the employees and not necessarily mandated. Like taxes are insurance deductions, same type of concept. If we have insurance that is being taken out of the check I out of time period again, that's usually a benefit. That's usually a good thing, that the company is doing that for the employees as ah has a choice, and we have to take that out and the register. Garnishment and levees may not be considered a good thing, but again, it's something that's gonna be required by law. So if there's some type of garnishment that is given by a court order. Something happened. And then they're garnishing the wages, taking money out of their wages directly, rather than, uh, you know, waiting for the person to pay there the legal fees they're taking over the wages directly from the employer again putting the emphasis on the employer. Now the employers responsible for making the payment in the form of a garnishment rather than the employees being the one responsible Teoh make the actual payment. Union dues are something that could be taken out again that will apply only in cases where there is a union involved and then any other deductions that we're gonna take out. So there's gonna be a you know, a long list of stuff that we're gonna put into a worksheet. And some companies may not include some of this stuff, some of these other type of deductions, especially over here. State taxes could be similar or different. But ah ah, money. Many of these things will apply here, and we'll put this together when we start to put together a worksheet. If we were just looking at work sheet now and we don't go through the calculations, it just looks like a a lot of members on a worksheet, so it's best to really build this register step by step and concentrate on each calculation . And then when we see the full product, when we see all the employees on it and we see just a bunch of numbers and this calculations of all these things, if we can then focus in on one individual thing like, what is the marital status? What is the number withholding? What is the salaries? Why do I need it then? It's not that complex. But if we look at a completed payroll register with with multiple employees and state taxes and especially if we have some of these other deductions, it's usually more intimidating. Then it needs to be if we break it down piece by piece, so that's what we'll do. Going forward will start to create the payroll register. We'll look at it piece by piece, and we'll do a problem where we calculate these calculations in a payroll register 39. 330: In this presentation, we will take a look at payroll register and payroll reports within QuickBooks. Here we are in the home page. We currently have the open windows open and orderto open the open windows. You go to the view, drop down and select the open windows list. This is an Excel worksheet to give an example of the payroll register that we typically think of when we process payroll by hand. When learning payroll. When learning how to inter payroll, we typically think of the payroll information within a payroll register broken out by pay period and then the employees and then processing in this horizontal fashion. Generally, what the growth pay is, what's gonna be taken out of the gross pay and getting to the net pay check. The other main form that we typically think of is then flipping that and thinking of the data in terms of the earnings record and that will flip the information so that it is first by employees and then by the pay dates for each employee. And this is the information we need in this format. In order to them give the information per employee e rather than the payroll register, which is giving all the information per pay period. When we think about Excel, when we think about QuickBooks, rather, it's gonna look a little bit different. We're going to think about the same information as we process the payroll, that same information when we have the payroll register as we process payroll when we enter the payroll data. So, for example, when we go down here, we pay the employees. We can think of that as, ah, form of payroll register. That's where we're actually entering the data per period into the system. And we're gonna record that by employees per pay period. Let's take a look at an example of that by taking a look at a paycheck by going to the banking up top use register. We're gonna go to the checking account and say, OK, and then we're gonna go into, let's say, Anthony more and double click on that check and look at the paycheck detailed. This is actually the data entry screen, and this is where we enter the information. As we might think of if we were to do this by hand, we would enter into the payroll register. We would say here is gonna be the hourly rate. Here is the overtime rate. Here's the calculation of the hourly rate, the overtime rate, and this is what is being deducted from this employee to arrive at the Net check. That's typically what we're going to see in a payroll register in apparel register. However, we're going to see it in, ah, horizontal type fashion, typically. So, if we were to do this by hand to calculate this out, the easiest way to format this in Excel is to have each employee listed in a vertical fashion and then say horizontally the calculation of the net check for each employee. So that's how we would do it by hand and calculate this information in QuickBooks. Of course, we're going to do it by this little worksheet and enter the information by employees per time period. Once we have that done, then we could see the information and sort the information in different ways. So if I close this out, close this out, we go to the reports up top, and then we can see down into the reports. We're gonna go to employees and payroll. The main report that is the summary report that would probably they go to reports. And if we go the payroll summary, select that item and changed the dates from, Let's Say, a 10118 to 12 31 18 We're gonna get by employees Anthony and Judy. We have two employees for the year, and this is grouping up all the information, all the paychecks into one by employees. So all page X for Anthony, all paychecks for Judy Jones. And then, of course, the total note that this is closer to an earnings record type of format because it's broken out by employees. And that's often typical in the reporting side, because that's often what we're looking for. We're often looking for once the petrol have been processed to see it by employees, and this gives us ah, quick look of that There's many other reports that can be generated within QuickBooks if we're doing this by hand, of course, were limited toe how we want a maneuver, this data. But if we have QuickBooks, QuickBooks can do that automatically, and so we have some other reports. It's it's nice to just see and compare them to our major to reports that we would do by hand when processing the payroll. If we go to the reports, drop down and we go to the payroll and taxes. This feature is nice this summary data in Excel, which will export many useful reports to excel that we can then navigate through. So I'm gonna go to summary reports in Excel, and we'll take a look at an example of those reports and how they're formatted as relation to the payroll register. We're gonna change the dates from 010118 to 12. 31 18 That looks good. Going to keep those and then get the QuickBooks and data. Here we are in the Excel Report that was generated from QuickBooks. We have our tabs down below, which will give us our reports. First half first report generated from QuickBooks is the employee journal. By check, you'll note that many of these reports are gonna be in the format of the earnings record type format more than in the format of the payroll. Register the payroll register often being the useful format for entering the data, and then once we sort the data, we often want to see it grouped by employees. So we have this information by Anthony, the the employees Anthony and Judy Jones. And then we have the compensation laid out in this format, and we could see that the Net check is at the end here. This giving us a detailed information. If we scroll back to the left, we can see that we have the employees, and then we have the check dates within that employees E given us the detail per employee if you go to the next report. The year to date summary report. We have a similar type of layout. It's broken out by employees E. But now note that QuickBooks has simplified it in a way giving us the quarter data and the year end data. And in that format, it's just a little bit easier to see. It's still more like the earnings record rather than by the payroll register, because that's often the format. We want to see it, but it gives us less detail, which is nice. So that's the benefit that we have with all the data is there. But when we do it by hand, we really have to lay it out in basically a couple of reports because we can't just sort the data as easily as we can within QuickBooks. We can put that data into different formats in a in a simple way, in an easy and fast way by just re sorting the numbers and doing that automatically. Then we have the year to date note that this is just a similar report to the earnings record, but now it's in more of a vertical fashion. It's in a format now that we would possibly see it closer to a paycheck stub given us the employees and in the gross wage and then all the deductions getting to the Net check notice . What's not being included in most of these reports is the employees, er, taxes, because we're really focusing in on the employee E information. Getting us to the Net Check not showing really what's happening over and above in terms of the employer taxes. We have some other reports related to ours rates and hours, and then the state wage listing the deferred compensation quarterly reports. Another one here that is going to be useful, this one being broken out by employees again as well, but also given its more details by quarter, and then it gives us the total in more of a vertical fashion rather than a horizontal fashion if we saw in a traditional earnings record or payroll register and payroll register . But it's also giving us the employee and employer, er, data here. So we have the items that aren't included to get to the Net check calculation, and they're giving us things like the employer matching the federal unemployment, the food to attacks. So these are gonna be items that are employee and employer. So it's a nice report to have for payroll. So that's just a bit of the comparing and contrasting. When we take the terminology, I'm gonna bring over our report that we're gonna do more by hand in a traditional four matches. Working the problem in Excel. If we were to do payroll by hand, we typically think in terms of a payroll register type report that will be in terms of date and then by employees e giving the information by employees by papered first by papered and then by employees. And then we need to re sort that data, and we typically resort that data into something like an earnings record so that we could have the employees e and then the pay date information for it so we can get that year to date information when we consider it in QuickBooks. We have more options. We're gonna use more options in terms of just format in these numbers around. They're based around the same concept as with these two reports. But because we have the option to sort them around in different ways, we can sort them around and have larger reports. Smaller reports group in information in ways that might be easier for outside real readers to see and pick up the information that's necessary. 40. 410 Fringe Benefits: In this presentation, we will discuss fringe benefits. French benefits are important within payroll because, in essence, they're going to be a form of payment. Their rewards for services done, however, and that's just like any type of payment. Their rewards for services, however, they're typically going to be non cash compensation. And when we consider non cash compensation, the question is, well, do we need to include that in wages? Even though we didn't get paid cash? Is it still wages? And a big implication of that are a big problem with that, Or a big concern as to whether it is wages or not? Is, is it subject to taxes? Is it subject to federal income tax, state income tax, the self security and Medicare tax? So that's gonna be a big component. Now there's gonna be different reasons and incentives why an employer might want non cash compensation. They may be providing just just types of benefits through their business, further employees as perks of the job that are non cash compensation. But clearly there's also an incentive to try to plan for non cash compensation in the areas where it may lead Teoh compensation that cannot be. It wouldn't be taxed in other words, and employees who was either to receive cash, which then would have to pay federal income tax, state income tax, all security, Medicare or was to receive some other kind of French benefits. Some other type of, in essence compensation. And even though it's not cash, not as liquid possibly not is preferable in that, for that reason could still be preferred because if it were not subject to taxes, so that's gonna be a big issue now. Of course, most things if they're going to be something that's just non cash doesn't necessarily mean it's nontaxable. Most things are, in other words, so if someone received some, like a car or something for a compensation or some other type of type of reward, that would be a costly type of thing, or a vacation or something like that. Typically, that would still need to be included in income. That's a form of compensation. Typically subject Teoh taxes on it, so there's questions in terms of words. Are those limited things possibly that could be received by employees and reduce the payroll tax not need to be included in the payroll and one is going to be de minimus benefits. And that basically just means small benefits, minimum benefit, small, small type of things that if an employer gives small French benefits and you know, you kind of think of that in terms of accounting terms, it's something that's in material meaning there kind of your basically saying, We're basically saying they're too small to manage to matter about there, not something that, uh, when someone goes to work somewhere there, they're gonna take into consideration as part of their compensation package to influence their decision as to whether to go one place or another. So that's one type of French benefit we don't typically need. Teoh include education assistance is often, ah, benefit that can be provided by the employer and be a really great way that an employer can give incentives for an employee to continue toe skill up and improve themselves, and show that that you value the employees and give some tax benefit there. If they're able to basically reduce the growth wages because then that could reduce taxes on it. Ah, employee discounts. So and there's gonna be another type of area where, if you're in a particular industry, and there's discounts than within within limitations. You can basically apply the discounts and as a bonus for working in certain industries. And of course, certain industries have different types of discounts that could be available within that industry. Meals, meals gonna be something that will again within reasoned the determined as to whether it should be calculated as as wages or not. Is it part of travel? Is it part of? Is it basically is it for the benefit of the employer? Or that something that's gonna be extravagant for, um, the employees? Those are gonna be some concerns as to whether or not it should be part of compensation or not moving expenses. Reimbursements It could be. It could be something that would be beneficial to the employee and the employer transportation benefits and again that the questions here are whether or not it's it's a benefit to the employer typically, or the employee asked of whether it needs to be included in payroll taxes or not. So we're not gonna get into a lot of detail on the fringe benefits. We're just gonna point out here that there are there is a concern, of course, that if wages are typically given in terms of cash, then or check or direct deposit, then there is, ah, an incentive for for companies and employees to try to find compensation in other ways which possible, or look for ways that would not be included in payroll for compensations that would not be included in payroll taxes to look for those types of things. Now, most things the default will be that compensation is compensation. And if you get paid in something, if you get a car or some other kind of equipment or or a present or something like that, if it's over, you know a certain value that's not de minimus and value, then typically, we would have to find the fair market value of it and included as wages. But there are some types of things that could be beneficial, and those are things that are nice for a company to look into, because they can have some advantages in some effect. In terms of giving the employees MAWR through these types of compensation, French benefit types of compensation 41. 415 Deductions From Gross Pay: In this presentation, we will take a look at deductions from gross pay when considering deductions from growth pay. We may 1st want to look at what is growth pay? Gross pay is going to be before we have the deduction. So growth pay is going to be what AARP April would be if we did not have deductions, including things like taxes. So we're getting from growth pay, in other words, to the end result, which would be the Net pay and deductions then are gonna include things like mandatory deductions, which are federal and state income taxes, deductions by law, deductions we have tohave. So remember that the business is, in essence, required to make these types of deductions. It's important to note that the federal income taxes we're talking about here that are coming out of growth pay are the responsibility of the employees. In other words, there the employees taxes now that the employer is responsible and required to take them out by law. But they are these taxes related to the employees and again that concepts a little bit confusing because who's who has to pay the taxes? The employer is the one that's actually write the check, but the money theoretically is coming from the employees. It's coming out of their paycheck. So we're taking this money out of the employee paycheck by a law because we're required to do so as the employer. And then we're paying it. Teoh the state or the Fed the government on behalf of the employees. Then we have the Social curium Medicare. Same type of idea here. These air, both federal and or this is a federal income tax in federal income tax, Social Security and Medicare, Federal income tax and we are once again taking that out. Were required. Teoh. It's not a payroll tax that is necessarily in this context for the employer. It's being paid by the employee. Now we'll talk more about who pays which taxes, the self security Medicare is gonna have an employee component and an employer component. But when we look at our pay step, when we look at what's being pulled out of our paste home, that's of course what we theoretically paid it came out of our taxes. The reason I say theoretically is because we could debate in terms of, you know, what's the employer actually going to do what happens to the market when we when we impose taxes, what happens to whatever the negotiation will be? Four pay in terms of the negotiation. So from an economic perspective, you can kind of have a question as to you know, who's really paying the tax based on what happens in terms of markets. But what happens in terms of the actual paycheck calculation is that we have gross pay. This is going to be Social Security and Medicare that's being taken out of growth. Pay for our check, and then the business will have to pay their portion. They're a portion of soul security, and Medicare is something that we don't see on the pay stub not coming out of our check. That's an added piece that is actually payroll taxes to the employer. This piece, these things that are being deducted aren't really payroll taxes to the employer. They're just part of wages. They're part of what the employee has earned and therefore the employer. All the employer is doing is just taking it out and pain some of our bills for us. Ah, and that's what's really happening here. The payroll taxes to the employer will be the employer portion of Social Security and Medicare and some other things like photo, federal unemployment tax. So then we have the voluntary deductions when we get from growth pay and we're working our way down to net pay, and those are gonna be things like retirement plans and that these are These are good things, these air voluntary detections. So note they're similar because when we talk about federal income tax and Social Security, those air really the responsibility of the employees. Theoretically, we have to pay them as good citizens were supposed to pay our taxes And the, um and we can think of the business has kind of doing us a favor by taking him out of our paycheck directly so that they make the payment for us. It makes our lives easier. But of course, these are mandated to do so, and the main reason they are mandated is because the iris trusts and has more leverage over a company to force them to to comply. Then they do over individuals. So therefore, these air mandated now voluntary is the same kind of idea. If we have a retirement plan, well, the the company is providing that retirement plan in some way, and they're giving us the option to participate in it and the option then to take the money directly out of our paycheck and put it into the retirement plan. And that's typically a good thing. So that's gonna be a good option. Same kind of concept, however, that we're still just taking money out that belongs to the employees and pain it to some other area. In this case of retirement plan for the employees retirement cafeteria plans, usually some type of insurance plans are another type of benefit, typically that can be offered huge benefits and note that if you work in somewhere, ah, deductions that are mandatory don't tell you a whole lot about the culture of the employer . But if they're giving the voluntary deductions than those air things that do, because those are gonna be things that the companies deciding to provide as part of their benefit package. And so those are the things that are really differentiating one company from another company. So other types of insurance voluntary deductions could be included as well, so Section 1 25 plans Section 1 25 being a section of the Internal Revenue Service code, the iris code and under the Section 1 25 plan, we typically have plans dealing with medical expenses so they're typically going to be benefits related Teoh medical expenses. So pretax deductions Healthcare eyes typically what will be covered under the 1 25 plans. And, of course, the goal here is going to be to incentivize and hopefully make the medical plans or health care more affordable for employees. 42. 415: In this presentation, we will take a look at mandatory and voluntary deductions within QuickBooks. Here we are in the home page. We currently have the open windows open. In order to open the open windows, we go to the view, drop down and select the open windows list when thinking about mandatory and voluntary deductions. This will be driven by the payroll items, which we confined by selecting the lists, drop down and go into the payroll items list within the payroll. Items will find the items that will be taken out of the girls. Pay that mandatory and voluntary items being guided by this information mandatory will include things like the income tax, so the federal withholding will be mandatory deduction. We got the Social Security is going to be for the employees, a mandatory deduction to take out of the employee paycheck. And, of course, the Medicare will have an employee of mandatory deduction for map. We'll also have things that are voluntary. Voluntary will mean that the employee has the option to choose them or not. Once chosen, we're going to set up a payroll item, for example, for group life insurance, maybe an item that would be voluntary. Employee, 401 k could be something that would be voluntary. Once set up, I will use this payroll item to then entered in the Employee Information Center, which we could find at the Employees and Employees Center. And we're gonna select our first employees just to take a look at these. Anthony within, Anthony, we're gonna go down to the payroll section and we see that we have these items which are going to really be driving, whether they be mandatory or voluntary in this system and how they will be acting as we've process the payroll. So we got the 401 k that's gonna be voluntary. That dental, the vision, the health insurance. Many of these are going to be voluntary items that we will be taking out of the paycheck. If we were to process that, then we close this back out and then go to our banking section and use register and take a look at an actual paycheck. We're gonna take a look at an actual paycheck by going to the checking account, and then we're gonna take a look at Anthony's last paycheck on 12 31 double clicking on that paycheck and go into the paycheck detail. Here is the paycheck detail we could see now that those items are used to record the information in the paycheck. So the 401 came employees e typically a voluntary. The dental typically voluntary vision voluntary. And then we've got the mandatory things, which will, of course, include the taxes F I t Social Security and Medicare. Close that out. I'm back on the paycheck. Note that if we also go to the print tab and go to these pay stub, this is the pay stub that we're gonna basically see. I'm gonna preview this paste up when we get paid. We'll see a pay stub such as this, whether we get paid Elektronik Lee or not, we should have a paste up such as this, and we'll see the break out here as well. So we've got the current period and the year to date information the gross pay. And then we got the deductions from gross pay, the 401 K and the vision. Those typically being the voluntary type deductions the taxes down here typically being mandatory type deductions, and then we have some more adjustments for this paycheck. Dental, which is typically going to be, ah, voluntary type, deduction union and garnish mints are typically won't. They could be considered voluntary, man it or not depend on the union regulations, and then the garnishment are typically court ordered. So although they're not normal within the payroll process, they could be a required mandatory deduction, given the law of the circumstances for a particular employee. 43. 420: in this presentation, we will take a look at retirement plan options within QuickBooks, here we are in the home page. We currently have the open windows open and orderto open the open windows. You go to the view, drop down and select the open windows list. We're gonna be taking a look at the retirement plan options. Once we've decided what type of retirement plan, then we set those up, and those are going to be payroll items, so they're gonna be in the lists, dropped down. We're gonna go to the payroll items list. So the payroll item list. This is gonna be something that we may set up with the actual payroll processing as we go through the interview process. So we could set them up when we go to the employee, drop down and set up payroll. Or we may set it up at some later time and decide that we want a retirement plan. Here we have the standard retirement plan, that being the 401 K and the matching. But there are, of course, other options for the retirement plans. Those could be found if we go through the payroll items and add a new payroll item and say We want next and we're looking here at the retirement plan and benefits for a one k simple IRA and so on will say next. And it'll give us a new interview process to help us set up the retirement plan that we have thought about an agreed or want to put in place within our accounting system. Within QuickBooks, it includes the 41 K that we have set up here, the simple, the 403 b, the accept and the 4 57 B and the 4 37 b plans. So you could take a look at those. Of course, you would want to research these information, see what type of retirement plan fits best for your organization. And then, as we set them up, we would set up another payroll item in order for QuickBooks to be able to run the payroll in accordance with the options that we have chosen. If we close this out, we can then take a look at a paycheck. If we were to look at an employee first for, can it go to the employees, drop down and go to the Employees Center Once we have our 401 K item set up, we can then go into our employees, and we could go into their payroll information and add the appropriate 401 K in accordance with what we've had agreed with the employees. Once that set up, it should process for us as we entered into payroll. Closing this back out will go to the paycheck now banking drop down and we'll go to use register use. Register. Checking account is the one we want. We're gonna go down to Anthony Anthony's last paychecks in 12 31 2018 and check that out. We're going to go to pay check detail within the paycheck detail. We see the for a one k here. This is the employee E portion, and we also see that there is an employer portion of matching fortune in this example that on the employer side. So here's the employee and the employer on the items, the employees coming out of the paycheck, the employer on the other side, that's gonna be matched, being paid over and above by the employer over and above the growth pay. So that's just an example of how the 411 K plan can be set up in how it will be then processed or used in terms of the payroll item to calculate the paycheck and be processed through the payroll processing. 44. 425: in this presentation, we will take a look at post tax deductions within QuickBooks. We are in the home page. We currently have the open windows open. In order to open the open windows, we want to go to the view dropped down and the open windows list when considering post tax deductions were thinking about those items that are not gonna be included in the tax calculations. Those will be found and will be regulated by the payroll list items. So we're gonna go to the lists, drop down, we're gonna go to payroll items list, and these are gonna be all the paid role items that are gonna be guiding through this process. We have the items that will be affected in terms of the tax calculations as well as the taxes themselves. But we'll have some items here that are gonna be grouped after the taxes and not to be included or affect the tax calculations. Some of those air gonna be including things like a garnish man. If we had to set up a garnishment, that might be something that would be something that, if we set it up, would be not affected. The tax calculation but something that we would pull out of the paycheck. We could also have union dues, which is something that could be taken out as well. Those items can be set up by going through the payroll down here and going to new item. So payroll item new item and we would go to you. I'm gonna go to the easy set up, and many of them can be found in the other deductions. So other deductions and next and that'll give us kind of an interview process to give some of these deductions, most of which are not gonna be affecting the taxes. So these include the garnishment union dues If we have a charitable donation that we could set up or other miscellaneous deductions Ah, lot of things we made give our employees a benefit by basically saying, Hey, we'll take this out of your check automatically so you don't have to worry about it. Pay whoever you want to pay. And that really could be a service to employees because then they don't have to deal with that process themselves. It's gonna happen automatically, and so we can't set that process up. It just won't affect payroll It just means that we're gonna have to pay that. That add nothing would take it out of the paycheck. Not really a problem. But then make sure that we're setting up the payment on our side to pay whoever we have a creed to do. So, if we close this back out, then we would go in and set this up. Her employees, if we go into the employees and the employees center and we were to set this up, say, for Anthony, we're gonna go into Anthony, and we're going to say that he has a payroll item. And the item here are gonna be the union dues and the garnish mints that are gonna be the items that are not affecting the taxes. And it's driven by not affecting the tax calculations through the payroll item being set up within QuickBooks. If we close that out and then take a look at a paycheck for Anthony going to the baking, drop down and use register, then we're gonna go to okay and we'll take a look at Anthony last paycheck, double clicking on Anthony's paycheck and look at the paycheck detail. We'll see that we have on the items side, we're gonna have the union dues and the garnish mints, and they will be included over here on the wage garnishment and the union dues as something that's gonna be taken out of the paychecks. There's the union tubes. They're reducing net income. So here's the gross pay those air, reducing the income to get down to net pay as we enter it into the system. It's difficult to see which of these items are really affecting the tax calculations for the federal income tax, Social Security, Medicare and which are not. So we can see it on the paste up typically. So if we close this back out and we could calculate it and try to figure it out. But if it closed this pack out and then take a look at the printing options and look at the pay stub, this is gonna be typically what is given to us or given to the employees and preview the pay stub. We have the current and year to date information that growth pay, and then we have the deductions from Gross and put income from gross. The deductions from gross being the 401 k in the vision, these air two items, The reason they're up here is because they're saying, hey, these air gonna affect the tax calculation. Either the F I T and or Social Security and Medicare. These two are gonna be items that are going to be Justin, or they're gonna have a difference on the amount of taxes that will be paid as opposed to these items down here. Adjusted to net pay are going to be the items that are coming out of the paycheck. They're gonna be taken out so the Net pay check will be reduced by them. But they're not really affecting anything within the tax calculations. That's why they're below the tax calculations. And that includes, in our example, the dental insurance. And that's because that's the way we set it up. And then the union dues and the garnish mints 45. 505: in this presentation, we will take a look at the net. Pay a calculation within QuickBooks. Here we are on the home page. We currently have the open windows open in order to open the open windows go. They've you drop down and select the open windows list. We're gonna take a look at a paycheck step and look at the calculation for the Net. Pay for an individual employees by going to the banking, drop down, going to use register and then the checking account, and will once again take a look after Anthony Mawr. That last paycheck for Anthony, our employees, for this example. And like the paycheck detail, this is the paycheck detail, and the nets pay calculation as we enter, the data will be done on the right side. The left side. It's gonna be the calculation for the employer taxes of the employer information The employer paid stuff over and above the net pay calculation. And that, of course, will include the gross pay, which is gonna be up top the 4000 and 35 50 for the overtime in normal pay here. And then everything that's gonna be taken from that check in order to get to the net pay down here. Included in this case the 41 k that dental of a vision, the dues that garnish mints that medical for the for the employees paid the federal income tax, the F I T withholding Social Security, Medicare and then any state taxes, in our case, California taxes for withholding and disability. Finally, arriving at the Net check of the 8 2098 55 as we look at these agency could be a little bit confusing to know which of these items are affecting the actual tax calculations when we see it in terms of entering the data into the system. And a lot of this, of course, will be done for us if we have the paid paid role set up. So it's useful then to look at the paycheck stub, which can give us some more detail. So if we close this back out here, we go to the print and we look at the pay stub and go through the preview. This has given along with the check and once again we have the gross pay and our net check type calculation by check and the year to date information. This gives us to gross pay. And then we've got the deductions from Gross. Those are gonna be the items that are going to affect the taxes. So they're coming out of the net pay to get to net paid. But they're also affecting some of these items in the tax area down here. So these taxes then are then coming out of the gross pay as well, but are dependent on the deductions from gross pay for the calculation. Therefore, if these items change the 41 K for example, if it goes up, we would expect there be on effect on the federal withholding the f i T. Taxes. So these have an effect on these deductions. These are going to decrease growth pay as well as the taxes. And then we've got the adjustments to net pay that will not to be affecting the taxes down below these air items that we're gonna take out of net pay. But if they were to increase or decrease wouldn't affect the taxes that are being calculated. And then, of course, we get the net. Pay the net paper check in the net pay year to date 46. 510 Federal Income Tax (FIT): In this presentation, we will take a look at the federal income tax calculation or F I t. Now the federal income tax calculation. First, we should define what we're talking about here because when we hear federal income tax, you may think of that from different context. Most likely move. People think of federal income tax as what is reported on the 10 40 at the end of the year . And it's true. That's what federal income taxes what we pay, what we have to report. But we don't usually pay it at the end of the year. Most people don't Most people pay it throughout the year, and if we're W two employees, we pay it by with holdings that are actually done from the employer. So when we talk about federal income tax here, we're talking about the calculation of those with holdings. Note that we do want to keep in mind this big link. There's a huge link between the with holdings we have here and our reporting of taxes on the 10 40 at the end of the year, which is done primarily by the W two that we will get from our employer telling us not only what the tax will wages are, but how much what was with held. So the other federal income tax you may think of when we're thinking about the company side is the federal income tax that the company pays now. I'm not talking about the payroll tax company pays for the employees, but the fact that they were a corporation, a separate legal entity, pay income tax so in every instant, pays tax in some way, so pass through entities. Still, the income would pass through to the owners, and they would pay income tax. So in essence, in other words, there is a federal income tax that the company or the business pays in some format as well . A corporation being easy to imagine They're gonna earn income just like we, as individuals dio and then pay taxes based on what they have earned. This federal income tax for payroll taxes is not at all related Teoh the taxes for the company. Although these taxes are part of payroll and therefore can be deducted as an expense, it's an expensive of having ah, business and paying employees. It's really an employee expense. But in any case, we are talking about federal income tax calculations for with holdings throughout the time period. For each of the employees, this is one of the most complicated ports of the taxes. Once we you know, when we look at Social Security, it's complicated for a few different reasons. One that reason that federal income tax will be confused between different types of federal income tax or whose federal income tax are we dealing with and the type of year. When are we dealing with it? We're dealing with the withholding or the federal income tax on the 10 40 at the end of the year related but different also one of the most confusing taxes because it's impossible to get it perfect. Um, all we can do is make an estimate on it, and the estimate process is gonna be structured and formalized through a series of table. So this will be the most confusing type of tax we dio, especially if we do it by hand. If we do it with a computer, then the computer can just generate it. But we probably don't have much idea of what is going on and probably couldn't explain it to well do anyone else or do much tax planning with it if we didn't have a better understanding of it. So the federal income tax that we're gonna need to withhold from each paycheck will be based on a few different things. We're gonna need marital status. We're gonna need to pay frequency. Meaning When does the company pay period? Do they pay weekly monthly, bi weekly, semi annually. And we need the taxable income for for this calculation. Now, these things these things are gonna be necessary, of course, because if you think about the 10. 40 at the end of the year, it's based on these things. That tax we pay is a complicated calculation, by the way, we also need the number of allowances. So the these four things are gonna be types of things that are gonna be in our 10 40 at the end of the year. So the income tax is not a flat tax. It's a complicated tax to calculate. In order to calculate it, we need to know if they married or not. Why? Because marital status will change. The tax brackets were in and how many exemptions we have on the 10 40 at the end of the year and therefore the with holdings we have will have to be in such a formatted kind of lineup so that if we add them up, they will cover the tax and the envy of the frequency. The pay frequency on that, of course. Ah, well, when we look at the tables, which is how we'll have to do these types of calculations, the tables will be broken out by how frequent we pay. So do we pace weekly, semi weekly monthly or ah bi monthly so well that will determine what table we use and then that the taxable income we need to know the taxable income for the pay period, how much they're getting paid for this particular time period. And that's an indication of what the total tax will be as well, because obviously we have a progressive tax rates. If you think about your 10 40 the more income you make than the higher tax bracket you're latest dollars will be in. So we need to know that in order to do the calculation for but with holdings throughout the year and then the number of allowances is gonna tie in loosely Teoh the number of exemptions we know on the 10 40 exemptions like ourselves, our spouse, our dependence and the allowances may not line up ter perfectly to that number, but they're kind of based on that number as well, to try to calculate what the with holdings will be. These are the types of things we needed in order to calculate with holdings these attacks, things that were provided to us by the employees on the form W four when they became employed with us. Once we have that into the system, we don't really care about tax planning anymore. Way never do as a payroll. We don't do tax planning as payroll side of things because that would be confusing, you know, issues. We've got to separate that those duties out. So what we're doing now is just saying, Okay, this is the information that was given to us. How much do we withhold? That's what. That's the only question here that we eat. And we need this information in order to do that. Now, to get that, if we were to do this by hand, we would get that orphan into this by a computer the iris is going to give that information , and we could do that by using tables which are given to us by the circular e employers Tax guy. This is for 2018. You could look it up. Just goto iris dot gov and look for the circular e. And within it we can find the tax tables. Now a computer system will have those tax papal tables for us already and just pull that number out. But its really useful to go through the tables at least a few times to see the complexity of it and even going through the tables. We really don't understand what the table. How did the table get constructed, right? It's not a flat tax. It had to take these into consideration these calculations into consideration to make the table. So you can tell from a planning standpoint, this is kind of a confusing issued t get this federal income taxes. There's no guarantee, in other words, that the federal income tax withheld will line up Teoh what will actually be a taxable at the end of a year on the 10 40 calculation. But we do our best, so the tables will look something like this. If we go into the circular Eem and we find the tables, it'll be broken out. We gotta go to the correct table. So, for example, this is the table for a single person for a company that pays weekly. So if we pay weekly and we have a single individual, we can go to this table and we can look into whatever the weekly earnings were. If our employees earned 0 to 70 dollars, that's how much they're They're gross wages were and they had no ah, no allowances. They chose zero. Even though they have one exemption for themselves, they chose zero on and then they wouldn't. Why would they do that? So they don't have any with holdings. Typically, you know, So they got and that would be zero would be taken out now. Obviously, as as the income goes up, the withholdings would typically work. So if there wages were between 1 35 and 1 40 and they claim zero, then we would withhold $7. Now, this is only the beginning of the table. That's why there's all zeros here. But as the income goes up, then if they had one exemption, they would pay zero. And as the exemptions go up, of course, if they had zero exemptions, they would. We would withhold MAWR because we would expect them to go more money at the end of the year . When they do their payroll calculation. At the end of the year, these tables will go down. Teoh. Fairly decent amount of income. They will stop at some point, you know. So if someone makes a lot of money, then we won't be able to use these tables, and we'll have to use a different method in order to calculate their withholdings. So if they're married and weekly, then once again we pay weekly and they are married, Then we find there how much they got paid weekly for that particular papered. And then how maney allowances they have from their W four and then wherever that lies. If they were at one allowance and they made, you will say here somewhere between 3 55 and 3 65 like, say, 3 58 then they would go here. Also note that the way the table is, it's got 3 55 here and 3 55 here so way have the question. What if they made 355? Do we pick up the $5 withholding or the $6 Now, typically, we want to be more conservative. I we we as the business would rather just withhold mawr than less So will typically air on the higher withholding because we'd rather have our, you know, over withheld. And then anything we over withhold like they'll get back on the 10. 40. So we'd rather have them not owing money on the 10 40 than owing money Obviously a dollars not gonna make a big difference, but typically well, we'll air on withholding too much rather than too little. Ah, and in this case, so usually that's the case. So then if we have ah, single person still but now they pay bi weekly. Now this bi weekly is a decision by the company. So obviously the company pays people bi weekly, which is different than semi monthly Thes tables will differ than semi monthly. But once we know what table we use, we'll just use the same table each time. So this will be bi weekly again looking at the paid tables, the only things changing are gonna be these These stats up here and obviously the amounts withhold will change based on the papers. How much was earned in this case by weekly the earnings for employees? Ah, that get paid by weekly. You would think that they would earn, you know, more than than the weekly table that up here. So then we've got we've got married bi weekly, same type of idea and obviously that things are gonna change. Why? Because marital status will change the amount of with holdings. And these tables originally were built on the concept that we only have one income because obviously the employer only knows of that single income. So the tables air kind of constructed as if there's only one income. And we know that families typically have more than one income now and other income sources . So these tables are far from a perfect, you know, estimate. Unless we make that w four calculation more accurate in some way. Okay, so then we've got the semi monthly for single. So remember, semi monthly is different than ah bi weekly. So because there's 24 compared to 26 pay periods, So this table will differ, then semi monthly, two by two by weekly because there's they're slightly different a number of pay periods and then met married semi monthly. Ah, and then we have single for the monthly if we pay monthly and then married monthly. So a note. If you're doing this by hand, you got to find the right table. You gotta find you know where they were earned for each employee. Look at how many allowance or at and then look what the deduction would be again. Most of these all have zeros because we're only looking at the head or the first portion. And as the wages go up, then more with holdings would go up as well. Okay, so we were going and then we have daily, of course. So the other method is going to be the percentage method. So if we can't typically, we're gonna use the tables. But for example, if they earn too much money, then we can't use the tables. We have to use some other method, and that would typically be a percentage method. And you can think of the percentage method. It's kind of like this is kind of how they would create the table. So these air useful to look at and try to calculate just to try to figure out OK, you know, how are these tables being built? And if you if you look at these, of course, we know that the tax rates are progressively going up as income goes up. And so if you're trying to build a table, you basically and these won't line up with the table exactly, but they'll give you an idea of how this is being built. So if they earned between 71 254 so what that means is, if they if they had less than the 71 they wouldn't pay any taxes. But if they had between this mount, we're gonna have to subtract. Ah, you know, whatever they have. If they have 100 minus the 71 that's what they're gonna pay taxes on. So we don't we lending to calculate that 10% on that portion, and that would be how much tax they would pay. If if we're in this bracket, if they made somewhere between 2 54 and 815 then no, we kind of already calculated the tax up to 254. This this lining up to here? We've already calculated attacks on that. So we don't need to re calculate that what we need to do is just calculate the tax on the portion above to 54. That's below 815. So if it was, like 909 100 minus the 254 and then we're just gonna take the 18 which is the amount of tax on the to 54 plus the difference between you know, the 900 ah minus 22 54 and that would that be a 12% rate that rates going up as we make more money? And then if they made something between 815 and 1658? Then again, we already configure the tax. As of this line, that's the last point. So so as of that point, they had the tax would be eighties 5 62 and then whatever they made above that, So if they made 1000 200,200 minus 288 15 times the higher tax rate of 22% 47. 520 Medicare Tax: in this presentation, we will take a look at the Medicare calculation when considering Medicare. We're talking about the federal Insurance Contribution Act that they Fike. A type tax pica federal insurance contribution can be broken out into the Social Security component and the Medicare components. We're concentrating here on the Medicare component now, like the other fighter component, like Social Security, it has thes two layers to it. It's got the employer layer and the employees layer. This is going to be the most confusing component or part or thing to understand within the Medicare taxes, because we can confuse these two once again, we could confuse Ah, the 1.45 as if that's the only thing being paid or whose pain these taxes and the idea of this tax is similar to the 41 K plan. Again, that 41 K plan is not the same thing as a Medicare plan or so scary plan or a fighter plan in terms of the benefits and the payouts. But in terms of the pain into the program, you can think of it as a similar type of set up, meaning the employer is mandated to put in 1.45% which you'll notice it is a lot smaller if we if we move the decimal two places, it's 20.145 and the employer is is mandated to match that, in essence, putting in another 1.45 So what does that mean then? This is a Medicare is gonna be a payroll tax that will taken out. But remember, from the employer standpoint, the employee portion is not really a payroll is not really a payroll tax. To the employer, it's just payroll. It's part of the payroll. So in other words, the employees gonna earn whatever they earn and of their earnings. They're gonna have to take out 1.45% which we will take from them and just do them. The service have taken out their earnings and paying it not to them, but to the government, were mandated to do that sets. But in essence, we're just taking the employee wages that they've earned and allocating it to someone else that they owe. Whereas the employer portion is a payroll tax to the employer, meaning it's not coming out of girls pay, it's coming out of our you know, their employers checking account. In addition, Teoh, the employee tax. So in this in, in essence, this is really the payroll tax to the employer. This is really kind of a payroll tax to the employees. The employer sees it as just part of wages. It's something that's got to be owed to the employees. Now again, from an economic standpoint, you can. There's arguments in terms of what's really the effect of taxes. Who is really paying the taxes if you think about markets and whatnot. But from a logistic standpoint, from a record keeping standpoint, the accountant sees this as just the employees, part of the employees wages. It's not a separate tax. We just pay it out. Two things for the employees. This will be a separate tax and its attacks. That's not being called on the corporate income. It's been based on the employee wages. So this is going to be broken out typically as payroll taxes on recording when we have record the income statement. So that's usually the confusing piece. So note that really, the tax that's being paid between the employer and employee, the total tax being received or paid for Medicare is the sum of both of these taxes on the earnings of the employees. Often, miss people often think that it's only 1.45 This is what you'll see on the paste up actually coming out of the pay stub. But it's really twice that, because the employers put it in a portion as well. Because it's the same portion. It could be confused, and it can be confusing in terms of who's paying it or how the calculation is working. The calculation will be based on the gross profit for the employees each employee. So then there's no cap as there is with the Social Security type of payment. In part of the reason for that. And just if if we were to speculate on, part of the reason, if you're trying to find reasons for the tax code, can be difficult sometimes. But if we were to speculate, the Medicare is more of a pure safety net program now. So in other words, you have to qualify to get the benefits for neck for Medicare out at the at the end, whereas so security you get the benefits just for paying into the program. So so security. Kind of morphing into more of a, uh, kind of a retirement type of plan, in some sense, from the federal level. Whereas the Medicare really is paying in, it's still really a safety net program to help people that are having problems. Andi need the Medicare assistance, and because of that, it's ah, it's also less costly 1.45% of a lot less than the Social Security rate, which was it was a 6.2 now, no, that's really it's really twice that it would be 12.4 for Social Security and 2.9 for for Medicare. But again, it's substantially less so. There's no cap, and we don't deal with that that camp issue. It's the flat tax of the actual calculation for both these components is pretty straightforward. Whatever the gross wages, we just take a flat tax a lot easier to do than the federal income tax. We do have an an additional 9.9% big difference Saudi 0.9 addition for wages over 200,000 and this is another kind of component, that's all that's clearly ah, debatable component. As to as to whether that's your change or how that should change to this, this is likely more likely of a cap that could change over time, possibly than possibly the rates, which could change over time to, but probably not as often. 48. 605 Taxes Employer Employee: in this presentation, we will take a look at taxes for the employer and employee, or look at taxes and deductions and determine whether or not it's the employer tax or employee tax and deductions. In other words, we're looking at who is responsible for pain these items. Is it the employer or the employee? Now this is a confusing question because in one sense you might argue that they're all employer responsible taxes because employers really the one that's facilitating the payment , making the actual logistics off the payments happen. However, the question is really whether or not it's being taken out of the employee's gross pay to get down to net pay. Or is it something that the employer is paying over and above and outside of the calculation of gross pay? And that might be a more accurate way to think about it, because there's a lot of implications when we say that an employer tax on employee taxes at an employer deduction or an employee deductions and again, from a economic standpoint, you could argue who is actually paying the tax what's really happening. If we didn't have, you know, the laws that we have here so it might be more accurate and easier to think about in the context of which taxes are going to be coming out of the growth pay to get to the Net, pay for the employees in our payroll calculation in which taxes are gonna be paid by the employer and not be involved in the growth pay calculation. So we're gonna list these out. And if the thing says if we say yes in each column or in either column, I yes means that it's gonna be an employer responsible type of item. If we say no, it's going to be non employer responsible in that column. And if it's yellow, then that's gonna depend. And that's how we'll go through these. And if you memorize the last slide, then you have an advantage here. If you contralto recall what you remembered on the last lied. So we're gonna go through these here. We got Social Security. What type of taxes? That is it an employer tanks and employees tags or both, And we're gonna say it is an employer and it isn't employee tax and confusing a bit. Why? Because remember that the Social Security they set up kind of like as if it was a form one K matching type of thing. So there's an employer portion to it and there's an employee portion to each pay it. Currently, I believe, 6.2% off the employee wages, so that's gonna be on both sides. So when we see the growth paycheck calculation, the amount coming out here is really only half of the total amount that will be paid. The other half will not be coming out of the paycheck. It will be coming out of the employer's payroll taxes on their side on their checking account. Then we've got Medicare. Is it an employer Tax? Yes. Employee tax? Yes, same thing, because these are the two fighter taxes and they're set up in a similar fashion in that the employer will pay for a portion of it, half of it kind of like a matching type of idea. And then the employees will pay for a portion of it, so it will be calculated in the gross pay, reducing the growth pay, but only by half. That's only half that will actually be paid, the other half being paid by the employer not included in the calculation of net pay. Gross baited to net pay paycheck calculation and then we get the federal income tax. Is an employer tax? No. Now note that this you might say well, with federal Doesn't a corporation fate pay federal income tax? Yes, they dio, but we're talking in the context of payroll, federal income, tax meaning federal income tax that's calculated on the basis of employee wages, not federal income tax, calculated on the basis of the corporations. Net income. That's that's a different type of federal income tax. A note. Uh, we have to be careful in the context. Here we're talking about federal income tax as a payroll type tax. In this case, it's not something that the employer pays but is responsible for calculating and pain for the employees. In other words, the employer does the logistics of taking it out of growth, pay to calculate net pay and then paying it. Teoh the Fed to the government. But it's being paid on behalf of the employees out of their girls pay not as something out of the employer funds again, theoretically, so then we have the federal unemployment tax isn't an employer tax Yes. Is it an employee tax? No. So this is going to be something that does not come out of the calculation of Net pig roast paid to net pay. It's not gonna be part of the paycheck calculation. It's not gonna be on the pay stub. The employees won't even see this. And so for that reason, and because it's a lot smaller, we may not have any familiarity with it just by being an employee. The employer, On the other hand, we'll have to feel how yearly 9 40 pay this tax. So it's smaller tax, but it's still something that that's a pain, because you gotta calculate it. There's a little cap on it and everything so on. You have to report for it so that one comes out of the employer portion. Not out of the employees state unemployment. Is it an employer tax? Yes. Is it an employee of tax? It depends on the state. Now, this one room is that unusual one, and that we usually are not touching it on the state taxes here because we're gonna it's gonna change from state to state. We can apply the same principles most of the time to the states. But remember that the state unemployment tax is closely, closely tied, linked to related Teoh the federal unemployment tax because of the way the legislation basically happened. So that means that every state really kind of has a minimum standard in order to meet the regulations that were basically put in place as the federal unemployment tax, what's put in place. In other words, in order to get a lower tax rate for the federal tax, the state has to meet some minimum requirements and therefore all the states will do that so that they can keep the money in this team in the state rather than go to the Fed. So therefore, we're going to include the state tax, and we're gonna say, Yeah, it's gonna be an employer tax because that's part of what's kind of standardized. But it could also be a partially on the employees as well, and that's gonna depend on the state. The state has more leeway. Thio Thio have an important portion there, so it will be paid by the employer not included in gross pay, and it possibly could have a portion to it depend on the location. That will be a reduction from our gross pay to arrive at net pay for our paychecks. Workers Compensation compensation is that employers acts. It is an employer tax. Is it an employee tax? No, not an employee tax. So workers compensation something that's gonna be paid out of the employer taxes. And obviously it's four compensation for employees. We don't have any employees. We don't have worker's compensation. But it's not gonna be a calculation to arrive at. Net Income is not coming out of the employees Gross income to arrive at net income. Then we have the 401 came math. If we have a matching plan, is it an employer tax? Yes. Is it an employee tax? Yes. Now? No. This is where specifically have to say that it has a matching plan. Like many. For one case, dio. If we're talking about other attacks of retirement plans, then it's still a benefit no matter what, because it usually has a higher amount, you can put into it. But there may be differences as to whether the employer put or who puts the money in and how much is by each of these. But if there's a matching plan, then it's kind of similar to what we said in Social Security appear they're not the same thing. The so security is not Ah 41 K because the Fed isn't really holding onto the money in a similar doesn't have to account for it in that way in a similar way. But the ah withholding is similar in that the employees gonna put something that's gonna come out of the employees check, and the employer then is going to match it in some way that coming out not from the employee check, but from the employer, uh, general checking and then voluntary duck deductions. Are the employers know? Are they coming out of the employee? Yes, so anything that's voluntary. Typically, the employee has an option as to whether they wanna have the deduction or not. And the employer is giving the benefit the service, not of paying for it but of facilitating the transaction of taking it out of the employees , check for them and making the payment for them so that the employee doesn't really have to worry about it. If the employer wants some voluntary deduction to go to a savings account, or something like that, then the employers is just taking it out of the check and putting it directly to where the employee wants automatically and more of a service. It's going to be calculated in the calculation for net pay, however, because it's gonna be paid by the employer but four and out of the funds that was earned from the employees. 49. 615 Federal & State Unemployment Tax: In this presentation, we will take a look at federal and state unemployment tax calculations when considering federal and state unemployment tax calculations. We are considering types of taxes that are employer taxes, so we're focusing in here on employer type taxes. FOTA is going to be something federal unemployment tax is going to be something that is not a employee tax at all. Unlike the fighter taxes, Social Security and Medicare, which have a employer and employee component, the food to tax is a pure employer attacks. It has no employees component to it, meaning when we look at our paycheck and that paste of the calculation of our net pay, it doesn't have any Fouda removed from it. Fouda is a payroll tax. There will be an expense on the corporations or the business books as a A payroll tax and not part of the wages paid for the employees. So the food attacks then is going to be on the 1st 7000 Now this could change, and this is something that's really kind of confusing toe look at meaning. We're gonna take each employee and we're only going to pay food attacks. The employer is paying the food attacks based on the 1st 7000 of wages for the employees, that means that after they make you know 7000 and $1 we don't pay any more tax on food of after that for that next dollar. So for that kind of is a little unusual in some ways. Meaning that means that if we have more employees, then we're gonna have rather than pain, employees more money. We're gonna end up paying more food at because most likely and employees, even poor time employees, if they're employed by us for the entire year, will earn more than $7000. So for each employee, if they're employed for the entire year, then we're probably gonna be paying more than 7000. We're gonna have to pay. You know, the maximum food attacks per employee by the food attacks is fairly small as well. So that's another area that's really a bit confusing. If you have test questions on it, it's a bit confusing if in practice it's it's more straightforward. So the way you'll see this is that it'll it'll say that the food attacks is 6%. And remember, when we talk about these percentages in these caps that they could change over time. But if they these ones are more stable than other things we talked about. But the types of taxes that we're talking about are going to be a types of applicable standards. So once anything changes, we want to just go back and make sure that we are checking the correct rate and apply it and use the same principles that we're using to calculate the tax. So the rate, the way the wrong on the law set it up is basically saying that the rates gonna be 6% however, that we're gonna try to mandate the states in some way Teoh implement their own suta and therefore we're going to say, Hey, the federal taxes 6%. But you get a 5.4 rate reduction if the state complies with suitor requirements in accordance with the Fouda loss. So within the food to the law, the federal income tax law, the feds basically said, if you states put together a Suta State Unemployment Tax Act that complies with this A, B and C, then we'll give you a 5.4 discount or deduction, which means that the net tax, the actual food attacks and for all practical purposes is 0.6. Now, notice is pretty low tax rate 0.6 for the food to tax. So again, if you look, if you look at it and they ask you, what's the food? A tax rate, What's the federal unemployment tax rate? It's really 6% with this deduction, which basically every almost every state or ah complies with and therefore the rial application rate, the one you're actually gonna use most likely to calculate is gonna be this 10.6%. So from an application purpose for all practical purposes, most the time we're gonna have a food to rate that we're gonna use at 0.6%. But, um, the wording of it's gonna be 6% if the state complies with its from the 5.2. I mean, the 5.4 and the deduction given us to that 0.6% Now note. This isn't 6% of 60.6. So if we were to convert this to a decimal moving at two places to the left and that calculatedly 20.6 so it's 0.6 of the 1st $7000 earned for each employee for food attacks, which is an employee er tax. Uh, that's going to be paid, meaning it's not coming out of the of the paycheck. And then the state Unemployment Tax Act will vary. We've noted here that all states typically have some type of state unemployment, and the state unemployment will typically meet the minimum so that they qualify for this 55.4. In other words, you know, the state would rather set up their own system and collect the 5.4% rather than have the have the Fed take it at the sixth at you know, the 6%. So if the state has to impose a tax, they would rather take the tax typically, so they're usually going to comply here. But that would be kind of like a minimum standard, and they could add some more standards to it and vary the tax in some way for the suit attacks. But oftentimes it'll it'll mimic the same type of calculation. Some type of low, um, cap here, like 7000 would be for the 1st 7000 or 8000 or something like that and then have a similar type of rate up to that point. So reporting period and tax deposits notes that different There's gonna be different requirements for when, in essence, we have to pay the deposits for our payroll, and it really depends on how how larger payroll is. So the laws is gonna try to give more flexibility to painful periods that have have less employees and less total payroll. So, in essence, you know, the larger the payroll is that the more frequently we have to pay so we could end up pain, you know, on what we could. Our payroll periods and taxes could be a monthly, semi monthly or the next business day, and we won't get in a lot of detail in terms of what those paper, you know exactly what the dollar amounts are because those could change. And very just be aware that as we report the payroll, we need to make the deposits as we go. And so if we're, um, if we're doing payroll weekly or or bi weekly or semi monthly or monthly, once we process the payroll, there's a question asked you, how long can we wait until we give the money to the government, meaning after every payroll period, we're taking money out of the employees. Wages for the with holdings. How long do we have until we have Teoh remit the money to the government, pay that government out, pay that money to the government? And of course, they want their payments sooner rather than later. And eso we make those payments as we go and then we verify the reporting, kind of like we do with a 10 40 for individual income taxes. That's what the quarterly reports will do. And 9 40 ones are not there to calculate and pay the tax the 9 41 zehr there to report and verify the tax code and the payments that theoretically and should have actually physically been made by that time. So when we do the 10 40 I mean, when we do the 9 40 ones at the end of the quarter for payroll taxes, the quarterly reports at the 9 40 at the end of the year for Fouda we should not be beach pain at that point. Kind of like your 10 40 at the end of the year. We shouldn't owe money on the 10 40 at the end of the year for everything was done right. We should have actually overpaid on the 10 40 and get money back for the same thing is true for payroll taxes that we should be pain as we process payroll and we have some time period after payroll processing t make that payment, and then we're just gonna report that we have paid and the liability on the nine forties Quarterly and the 9 41 at the end of the year. Note, too, that, unlike the 10 40 we're not thinking and we're gonna get money back because it's not. It's not a complicated it's not a A system that is more complicated, like the income tax, meaning it's more flat tax that calculations should be exact. We should know exactly how much we owe. We should have paid exactly what we owe. So if we did it all correctly, we can conceivably make it exact. And it should be as opposed to income taxes, which that's an impossibility. You're always gonna be off, and hopefully, hopefully there's a bit of a refund because that makes things easier. At the end of the year, 50. 620 Form 941: In this presentation, we will take a look at Form 9 41 The form 9 41 is a quarterly federal payroll tax return so that form 9 41 is going to report those federal taxes of those federal taxes, including the federal income tax, the Social Security and the Medicare on a quarterly basis. Note that when we talk about the federal income tax where we're not talking about the taxes for the corporation, which are going to be reported on the corporate or whatever business entity we're talking about, it's not the income tax for the for the corporation. It's the income tax for the employees. So note that the Form 9 41 is going to report the payroll taxes and in this sense, were talking payroll taxes for both employer and employee. Remember that when we when we record something on the books as payroll taxes on on the income statement for payroll tax expense, we typically just think of the employer portion. That's what were we will record as payroll taxes on the income statement. The employee portion will be included in just the payroll expense because it's really payroll expense that has been earned by the employee. That's not the taxes that were paying over and above what we would pay the employees anyways. It's just so happens we're going to pay that portion to the government rather than to the employees, although the employees earned it. When we talk about the 9 41 we're going to be reporting not both components. The with holdings we took from the employees and the component for the payroll taxes that we owe on top of those with holdings now quarterly then will mean that there's going to be four payments we're gonna have divide the year in the quarter. So there's 12 months in the year. If we divide 12 by the 4/4 that we're gonna have, we're gonna have three month time periods. So the first quarter of, of course, January, February, March, then April, May, June, July, August, September, October, November and then December 3 month time periods. And when you first start looking at this, that can seem a little bit confusing. When we see quarters. You might just start to think it's easy. Sometimes people start to think that there's four months because it's 1/4 but remember, we're taking 4/4 off a 12 month year. 12 divided by four is three. We've got three month quarters that we're talking about whenever we break the year up into the quarters. And then the question is, when do we have to report the 9 40 ones when we actually have to turn them, turn them in? Well, the first quarter is January, February, March, and then we have till the first of next month. Teoh, turn in the 9 41 Meaning we have to record everything and get it all set up and report it by April 30th the second quarter being the same April, May, June. And then we have to compile that data as of the end of June for the three months into June and get it done and and, uh, turning in by July 31st. And then the third quarter, which includes July. August, September, has to be turned in by the end of October or is due by the end of October. And then the quarter of October, November in December is going to be due by January 31st of the following year. So that's gonna be our quarterly returns when they're due. This is gonna be a copy of the 9 41 and you could find this on the IRS website. You can just go to the I. R s dot gov and type into the forms section and 9 41 and you can get a copy of what the 9 41 looks like. This is just the first page. It's typically a two page document, but this gives you the major components of the first page. If we zoom in on this a bit, we're going to say that we have the employer identification number. That's gonna be the I. D. Number for any payroll calculations. And again, any entity, no matter what, the entity, will typically need an e I in number and report the payroll. We got the name trade address. Then we need to report which quarter that we are filling out the 9 41 4 and then we'll go through these calculations. We'll fill this out a little bit more completely later. But note, of course, we have the wages, tips and compensation. This is will be for the for all of the employees here. So we're talking all of the employees kind of combined together. When we do the payroll checks, we're and do the pay steps will actually have to break this out by employees as well and give give the similar information for the employees. But this is gonna be combined. All of our employees. Then we've got the federal income tax withheld. Ah, for wages, tips and other this number. There's no calculation here. Note. We're not gonna basically take the wages, times, anything we can't because it differs. It's not. It's not a straightforward tax. Um, it'll differ from employees to employees. All we can do is is basically add up what we came up with based on our calculations on what we withheld from each employee, then we have the Social Security and Medicare calculations here. Now what we have is the Social Security wages and then the Medicare wages. And then we have the tips broken out separately, which, if we have tips that would be applicable. Otherwise, we put the total wages here. Now, note that this may differ than line to the Social Security wages for all of our employees may differ from line to for For one thing, I hear there could be a cap on the Social Security wages, and this will be reflected again on your W twos. You may see that there's three lines for wages for self security wages, federal income tax wages. Federal income tax is decreased by things like a 41 K plan, whereas the Social Security is not Social Security wages have a cap on it, whereas the federal income tax does not, and then Medicare doesn't have a cap on it, whereas the Social Security does. So we could end up with three different, you know, wages, lines one for federal income tax, which could differ from these. The self security wages which could differ from the Medicare for the entire company. Then we're gonna take the Social Security wages and multiply it times point 1 to 4, which, of course, is if we move the decimal place two points over 12.4%. And remember, we said that it was 6.2. That's how much we pay and the employer times two. That's where you get in there. 12.4. Removing the decimal two places over This would be 12.4% or 0.1 to form on the Medicare side, we have the points, Um 0 to 9, which is 90.45 Oh, point or 145 which is what we pay on the employee and employer side times two for both. And so we're paying 20.29 between the employer and employee. So that's where we could see that we're reporting both sides here, the employer and employee side. And then we're going to basically add those columns up here, t get to get our total taxes that we will. Oh, meaning we're adding the federal income tax, the employee tax on Lee and the Soul Security and Medicare, which is adding up the employee and employer or portion of federal taxes. Then we have some other lines, like adjustments, and there's gonna be some fractions of a penny type of things that are off. So if something's if our calculations are different than what what we calculated to be by fractions of a penny, then we can make some adjustments there, and then we have some other type of adjustments we won't go into at this time to finally arrive at the taxes after adjustments, whether they be just rounding adjustments or any type of other adjustments involved reporting those three types of taxes this is reporting than the liability component. This is how much we owe. We've re calculated it. We've already recount. We've already calculated it as we've done payroll in our payroll registers and actually withheld what should be reported here. Because this line here, this is just going to report what we already calculated for the federal income tax. And we've re calculated a flat tax, that flat tax just being a percentage times each individual's each individual's pay rate. So if we take the total times the pay rate, it should be the same. So our tax should be pretty much exact. And then we have this rounding thing that we could round if it's not exact. Now, Line 12 is total taxes after adjustments and credits, and then line 13 is gonna be the deposits we make. So these are gonna be the deposits we've made. So notice what we're doing here. We've got the liability that's been fully adjusted here, and then we've got what we deposited already. So this isn't a formal. We're gonna make the payment at this time. We're not trying to determine how much do we owe. We're just basically double checking how much we owe calculating it in kind of a different way and reporting it on a quarterly basis Here. So So this is just a reporting requirement. Shouldn't be on area where we are filling out and pain taxes at this point in time. So then we have the balance due, or overpayment, which again, hopefully there isn't any balance. Do our overpayments. If we had made an error somewhere, then there could be. But hopefully it's all it's all been paid up, and we're good, and we're just gonna report what has been done successfully already. Then we have a section B of the 9 41 the section B is going to give us some of the payment type of schedules. Now, Section B is only going to be required if we're over a certain amount of income amount. Otherwise we can weaken, have ah, summary. That's part of the 9 41 that is a bit less detailed. But of course, what we're gonna have here is we're gonna say there's three months within, um are quarter that were reporting for the 9 41 whether it be quarter 123 or four. And we're gonna actually break out the payments that were made here. So we'll just actually break out the payments by month and list out those payments. And of course, then we can sum up those payments for a month, one month to and among three. And if we add up the three months, that should then add up to our total payment that that we have our total payments, the sum of all the payments we have made designated to this quarter. And as we can see here that the total here online 12 on formed 9 41 So whatever we come up with here should this should be supporting what we reported on line 12 of 9 41 And if there's any discrepancies, if the IRS says, Hey, we didn't get paid in this and that and then, of course, then we have to go through. These will give us a list of the actual payments. We can see if they've cleared the bank and see if these payments have actually cleared and then we can talk to the iris and actually go through the list of payments we have and take anti them off and ask the IRS Hey, is this what you have on your side? And the problem will typically be if there is a discrepancy that the iris either doesn't have the payment, didn't clear or it's been applied to the wrong quarter, which is very possible, depending on how we reported it. If we accidentally made a payment at the end of the third month and applied it not to quarter one, but 2/4 to then it got applied the wrong quarter in, which has got to make sure that we have our applications to the correct quarters, and that should be a way that we can fix any tax of problems related to that. 51. 625 Form 940: in this presentation, we will take a look at Form 9 40 9 40 It's gonna be the annual federal unemployment or the Fouda tax return. So the 9 40 is going to be something that is gonna be an annual return, as it says here, and it's really just reporting the food. Now you might think these these numbers air so close to each other the nine forties, which are the quarterly returns in the 9 40 ones. That one. They're easy to get mixed up. For that reason, remember that the 9 40 ones, for whatever reasons, are the quarterly returns, and the 9 40 is kind of like the yearly return. The other thing that's confusing about them is one because numbering is so close and and to just because they're both payroll tax forms, it's easy to think that the 9 40 or the year inform is going to sum up in some ways, um, the payments that have been recorded or the types of taxes that are on the 9 40 ones. But that's not exactly the case. The 9 40 reports of completely different federal income tax, which is the food a tax, the federal unemployment tax. So note that the 9 41 is gonna be covering all other federal payroll taxes. So the 9 40 ones the 4/4 9 40 ones cover the federal income tax again. Not for the corporation on their net income, but for the employees payroll taxes, the income tax, the F I T and then the Social Security and Medicare. For both the employer and employee sides. Those are the 9 40 ones. The 9 40 isn't going to recap that again on an annual basis. What the 9 40 does is calculate just thief Ouda Tax The federal unemployment tax. Um, and the reason one reason this is the case is that it's kind of a waste of time to record the 9 40 once. Or maybe it's it's thought of as in material or not worth the effort to record to report the food attacks on a quarterly basis. Because it's such a it's a smaller tax. There's not as much being recorded, so therefore, the requirement is really just an annual requirement. So it's not really that we have quarterly requirements and an annual to sum everything up. It's more along lines that we're not gonna add the food a requirement to be broken down on a quarterly basis, in part because it's a smaller type tax therefore will allow. It's not to be reported until the end of the year, although the payments, like in all taxes, should be paid on the way as we go. So because it's a yearly form that's gonna be do, it's, it's we're gonna record the whole years worth of data from January to December, and then it's going to be due by January 31st. So clearly, obviously the end of the year is gonna be a a big time for record keeping. So we've got to do that last quarter and then we've got to do that nine forties so the 9 40 will look something like this. This and again, you can get this from the IRS. Gonna iris dot gov Look up the forms, look up form 9 40 you can get an idea of what the 9 40 looks like. It will be much. It'll be pretty much the same typically from your two year, but we do want to make sure if there's any changes to we need rates or anything. It will be reflected, of course, in the new in the newest form. So I want to make sure that you that you're down, whatever you're working on, downloading the newest form, this is the 2017 form here, so I will have the e i n number. Once again, we always need that guy in number. No matter what type of entity we are in the employer identification number, name, address, then we're gonna check the boxes that are applicable up here. Note that it's not the quarters, of course, because it's an annual return. But if it's an amended return, we got to say it's amended. If there's no payments for employees in 2017 we wanna have that. And if it's a final return, then we got a note. That, and the final returns can be a bit of a pain. We want to make sure that we close everything out for, um, for a corporation in terms of payroll taxes as well as everything else. So the first portion is gonna tell, ask for the state and asked, Basically, have we paid the state taxes? Are we subject to state taxes? Because remember that the state taxes or that are in some way related suit attacks is related to make sure that we have the lower food to rate. So if we paid the state taxes, we typically have that lower food to rate, which is gonna be the point. 006 or the 60.6%. Now, when we calculate the photo wages, it's a little bit confusing, cause you might remember that we talked about the fact that the food has a $7000 limit, her employees. So in essence, we're gonna be paying food attacks up to $7000 per employee, which pretty much all employees will will hit that if they've been employed for the entire year. Unless we hired them in, like, December or something or, you know, the last quarter, then they're probably gonna be paid 7000 orm or and so we're gonna have to pay food A for each employee for around 7000. Typically. Now, we've already calculated that probably when we did our when we did our calculations in the register to see what our payroll wages are for food or food, A payroll taxes. But the way we're reporting it here is we're gonna have to say that Here's our our payments to all employees. Basically what we paid and then any exempt payments we have, as well as the total of payments made to each point in excess of 7000. So we're gonna have, in other words, to have total payments and minus everything paid over the 7000 to get Teoh the number that we basically are gonna be using to calculate FOTA which we which we probably already have, which is, which is the, um, line six here, the sub total. That's kind of like a business kind of like our food toe wages that will have to make the calculation on, and that will be here. And then we're gonna apply the fruit attacks before adjustments is going to be the 0.6 It will take line seven food of taxes, times 70.6 that's 6%. And that, in essence, is going to be our food a tax. Now, if we go down to part three, we're talking about that as types of situations where the food of wages are you paid were excluded from the state unemployment tax and that's a case. Well, if you didn't pay state unemployment, you're not gonna get the 6% or you're going to get that higher rate and you're not gonna get that exemption. You have to add back in. You know that that that higher percentage for the federal percentage. So if that's applicable, we'd have to fill that part in here for any exempt wages from state taxes and pay the higher food to attacks once again similar to the 9 41 We would then have our our tax liability that we would calculate. Here, this is is a basically a recalculation of the tax liability because we've already calculated it and paid it. And this is going to re calculate it on a summary basis, meaning we're taking it and kind of as a whole and applying the tax rate, which should work because it's ah, it's ah, flat tax. So even though we calculated it as we wind on each individual wages on each individual pay period, it will still work out if we take the total the total wages that are food wages, times that the same rate. So we're gonna report that there and then we're going to report the food attacks. Ah, deposits that we have made. So we're gonna do the comparison and we're not gonna pay the food attacks now. We've already been paying it. The government wants their payments as the paychecks are being received. As we take the money from our we're not withholding money in this case, but as, ah, it big. As employees earn money, they want to be paid their food attacks in relation to the employees earning money throughout the year. So we've already made the payments and we're gonna report this So this form is just a reporting form. In other words, it's not a form to calculate how much tax well, and then write a check. Typically, if we do, we'll probably owe interest in penalties on it if we're paying for pain right now. So line 12 and 13 should be the same. If they're not, then we're gonna have to owe money or we're going to get a refund on it. But if we did it correctly, then they should tie out. Unlike like a 10 40 which is impossible to do that the payroll taxes typically is possible because the flat tax. So we should have paid pretty much exactly exactly what the taxes, and we should be able to just report it now and say, Here's a recalculation A recap of how much we owe for photo. Here's a recap of the deposits that we've already made. You can go ahead and verify that those deposits are made on your side of things, and just that will be the summary report for food. 52. 920 Form W 3: in this presentation, we will take a look at the form W two and form W three. So of all the payroll tax forms, the form W two it's probably the one that we are most familiar with. One that we have received it from our employer, one that we have used in order to fill out our form. 10 40 our income taxes at the end of the year. What we'll do here is go over. Some of the components of the W two will discuss how it relates to the other payroll tax forms and part of its functions, basically beyond just recording the taxes for our 10 40. So first we'll take a look at that function here. Of course, we receive it in order to help us toe to create and report our income on the form 10 40 our responsibility to do just by being the citizen. So we're going to self report how much we've earned and ah, and and that's gonna be on the 10 40 now that's gonna be one purpose. But the WT should also basically be ah firm statement to us as well that hey, the government is giving us the W two. And I mean, the company's giving us the W two and has also given the W to a copy of the W two to the I . R s. So w two is also saying, Hey, this room has information that we're giving to you has been provided directly to the IRS as well. And therefore, if you don't report this information, you prat, you're almost certainly going to get some type of some type of letter, like unaudited, some kind, some letter saying, Hey, there's W two income that you didn't report because it's being reported to the iris. So that's one thing to just be aware of that we have This is gonna be a red form of the w to you basically indicating that, you know, one cop is going to go to the to the employee. One copy is going to go to the I. R. S, and therefore the information is known on both sides. And therefore, it's something that basically you just have to report on your 10. 40. Um and it's already known by the I. R. S. If we go through their components of the w two, we of course have line one That's gonna be our wages and tips. And you would think that would be if you were to ask someone how much they earn. You would think you can look in the W two and just look at the Line one and say, That's how much we earn. But it's not an accurate number in all cases, because, really line one lines up. Teoh. What we earn for calculating federal income tax is typically main. It lines up to kind of like the withholdings calculation were making for federal income taxes and the amount we're going to calculate to use how much we owe taxes on on the 10 40 . But it's been reduced by some things like, for example, it's been reduced by the amount that we put into our 41 K plan. So it's not really what we've earned, possibly in that case, the Social Security is another wages, but it's in. It's geared towards the wages for Social Security calculations, and remember that may not be accurate in terms of how much someone earned as well, because there's a cap on how much Social Security wages are reported. We don't pay taxes over that cap. So if someone made over a certain amount of money than the Social Security wages wouldn't actually be accurate and how much they earned because it would be capped at that amount. The Medicare may actually be the most accurate wage calculation. If you look on the form W two, if you want to know how much someone actually earned the Medicare, maybe in many cases, the highest, um number because there's no cap on Medicare and there's no deductions like there are for Line one, such as the 401 K type deduction, which is gonna be a nontaxable for federal income taxes. But Medicare, we pay the rate. Ah, there's no cap on it. So we have these three wage calculations. We use the 1st 1 in order to calculate the taxes on the 10 40 but the other two will help us to calculate the taxes for Social Security and Medicare and make sure that those are in alignment as well. Line to has to do with the federal income taxes. We report that on the second page of the 10 40 that ties into what we've done in like the 9 40 ones where we reported the federal income tax on the 9 41 from the from the company side . So from an individual side, this is the individuals portion of what we reported on the form 9 41 As as what we withheld from company from employees and gave to the government eso Then Then we have the Social Security tax withheld, and this these two should line up. So we should be able to basically see Line three in Line four. Line up this again reporting and reflected in the numbers reported on the forms. 9 41 as is the Medicare. So here's the wages. Here's the Medicare taxes. We should basically be able to take our rate here in just the employees rate. We should be able to take our Social Security wages reported here times. Whatever the rate is just for the employees portion. Not for the both of them, as you see on the 9 41 just the employees half of it, which is currently 6.2% and that should give us our Social Security amount. Medicare. We should be able take our Medicare wages. Whatever's here times the employees half which is currently 1.45% and we should get the Medicare tax here. So those are gonna be the main the main components of the W two we're going to use to report. Now. Some of these mayor may not tie out to, like if we added up the 10 forties if we added up the wages on the forms 9 40 ones, depending on a couple things that could differ like tips. Um, you know, we should be able to reconcile at least the total wages from the 9 40 ones to all of the W two's on the wages. If we were to add them up, we should be able to reconcile them in some way. Same with the Social Security and the Medicare. If we were to add up the Social Security and Medicare wages, then for all W two's, which will dio in a second on the W three, then it should. Basically, we should be able to reconcile that, too. The 4/4 on the 9 40 ones. Same is the case for the Social Security tax withheld and the Medicare. We would add them up for all employees. We should be able to reconcile those toothy 9 40 ones. Ah, so then we have tips. What? Won't go? The tips? The vacation. We, of course, have the employees first name and initial last name. Then we have whether or not they are in a retirement plan or they component or participant within a retirement plan. If they are, we typically will report over here how much was withheld for the retirement plan, and that will be one of the major record styling items. Why lied? One will differ from Line three and line five could be that they put into a 41 K plan and that will be reflected typically down here in the box 12. And then we've got the State I D number. And if there's any basically any state withholding. So we got state wages and state income tax if there is a state income tax, depending on where they are located, so then we have the W three and W three you can see is very similar to the WT we got lying . One. Wages Line one. Wages Line three. Social Security and Line three Social Security wages Line five. Medicare. Why? Because the w three is is in essence, gonna add up all the employees w two. So it's kind of like the summary. So if we added up all the employees W two's, we basically have a W three, which represents, if all employees were one employee, kind of and the numbers for for all the employees put together. And this is one. This is the form, then that we should be able, tow, take and reconcile to some of our other payroll forms. And if we can do that, then we can have a little bit more assurance. So are 9 40 ones. We should be able to reconcile the differences between the 9 40 ones and for the for the. For the wages for the federal income tax for the wages for the self security and the wages for the Medicare as well as thief. Federal Income Tax Withheld The Social Security tax withheld in the metal Medicare tax withheld. Now there can be some components that will complicate that tips. Is is a component. They can complicate that calculation as well, but we can see how these forms they're all gonna be related in some way on note that when we report that they've amounts on the W two, and when we create the 10 40 then whether or not we get a refund will depend on the with hell withholdings that were reporting that have been made by the company by the business throughout the year. So when an employee, then if we over withheld on the employees for the federal income taxes, then they'll get a return once they they do, they're reporting so that basically the form 10 40 is the year end reporting. That's supposed to verify kind of like the 9 40 ones at the end of the quarter of the nine forties for the corporation. The individual is reporting the verification that they've made their payments. They're double checking the liability, reporting that they've made their payments through the corporation, withholding the money from them and then hopefully getting a refund again, if never exact. For the 10 40 for the federal income taxes and possible is too complicated. But hopefully it's a little bit over, and then you get money back. The Social Security and Medicare can be checked on on when we report our our taxes. We note that we put that into our tax calculations as well on the 10 forties. We probably don't notice them as much because those will be exact. Typically, when we get a refund, we get a refund. Typically for over withholding for the federal income tax, the Social Security and Medicare should come out. Exactly. It should. We shouldn't have any over withholding on those components. 53. 250 Paid Payroll Set Up: in this presentation, we will set up paid payroll within QuickBooks, starting a new company file and then setting up the IT paid payroll process. Here we are in QuickBooks. We currently have new company open. If you have a company open, you can always go to the file, drop down and you can close the company. Or you can start from here and start a new company from scratch or move forward. If you already have the company set up, we're gonna go through a process of setting up a company and then starting the payroll process will step up just a mock company company with nothing in it. So we're gonna go ahead and go to the file tab and we're gonna say a new company and we'll go through. They set up options. I'm going to go to the quick set up and set it up with as minimal options as possible. This just bare minimum what we need, because we want to concentrate just on payroll. Gonna skip this and just enter the minimum. I'm gonna say it's gonna be An S Corp. And I'm gonna say it's gonna be called paid Hey, role because it's a test document. I don't want any accounts other than the bare minimum, so I'm going to choose an industry and say none, and that will mean no chart of accounts except just the bare minimum. I just want to look a payroll it so we can concentrate just on payroll and we'll say OK, and we'll do the same thing for, well, the business type. Then we're gonna say it's An S Corp And that might sound confusing because an escort may sound a little confusing to some people. But ah, that's because then escort sometimes has natures for the one owner. So I want to keep it as an escort. That its payroll itself, for once set up, will be much the same, no matter what type of itself. Were sole proprietors to be similar to the L. L. P. It's just really what Differs is when we won't get into what differs. But it will be much the same in this and this format on the S Corp in terms of the different types of entities dependent for the payroll processing, for the most part, So we're gonna say OK, and then I'm just gonna create the company, so we'll create the company once the company is created. It's going to try to give us a couple things that we may want, including PAVE role. But I'm gonna close this for now and then, as if we're just have the company open, there's different options. It's always going to give you some payroll options within QuickBooks because it wants to you to purchase the added payroll. But we're gonna close this for now and go into it in a different format. I'm gonna close this out as well. Also note that QuickBooks didn't really tell me where I want to save the file. So if I have no idea which is put the company file, I could go to the file tab here and say, Where did you put that thing? And and here's the location of it. I'm gonna go ahead and screenshot this and now I've copied and pasted that into a word document so you can go. This is the mapping on your computer, so it's under the sea, driving this where you can locate it, copy and pasted, or cut and paste it to where you want to put it. That's one of them downfalls of QuickBooks kind of quick set up process. Sometimes they don't ask you where you want to put the file. So then you go find it and read, Report it somewhere. Remember that if you do cut and paste the actual QuickBooks file, you're probably gonna have to close. You will have to close the QuickBooks file in order to do so and then reopen it. Once we're in here, there's a There's a bunch of different places where we can purchase the payroll again. You're probably going to get some pop up from time to time in QuickBooks. Who's going to save you? Want to purchase payroll for the added purchase? And oftentimes it's worthwhile to do that, depending on our payroll needs. We do want to consult on whether or not what type of payroll we should be working with that would consult on account for that. So to do that, we're going to go. We could go up top to employees and go to payroll and turn on payroll here, and we also have some information down here where it says turn on payroll as well, so either of those will work if we select those items, it will conduct the Internet. So you need toe Internet connection. Teoh, connect and turn on the payroll cuts. You're gonna pay for the payroll and download the options. Here's the payroll options. We have the 30 day free trial here, which is nice. We're gonna go through the basic and enhance and then the assistance. You can take a look and compare and contrast these items. We are going to take a look at the enhanced enhanced, and that's gonna be the one that would be most recommended, most popular. So to sign this up, we go ahead and say I want to try it for free and then we would have hopefully those 30 days that we can take a look at it. If you were to set up the free trial, you would have to take a look and put in the credit card information and need to have if you have to cancel it at some time. If you wanted to do so, you could set up the annual plan or the monthly plan on you can work out, which is, you know, the better option for you, depending on your needs. Typically, of course will be cheaper to pay for an annual plan than the monthly plan. I'm gonna go monthly just for the example here. Continue. Then, of course, we have the payment information. Note that we will be using the state of California for our example problems. So if you're following along with the example problem, we'd want California. Once you enter the required information into the payroll process, then you get this screen here and you can get started or you can walk through. Ah, the set up process. We're gonna go through the set up process latest later, so we're going to get started once you do. So if you go back to the home page, then you'll know what has been adjusted on the employee's side of the home page. You. If you didn't set a payroll, there'd only be two icons. Once PayPal is set up, you'll have multiple icons here about the Enter the time pay employees pay liabilities in process the payroll forms. When we first set up the payroll, we're gonna get a warning saying that we should probably reset the close and restart the programs to make sure everything has been updated properly. we're gonna say OK, and okay, A And it says a Newt Tax table and order updates to your payroll tax form have been installed on your computer. Click OK to read about the changes. This will then take us to the payroll wizard, which we're gonna need in order to set up the process. I'm gonna close it for now, however, and we're gonna go back into setting up the payroll Whether we set up the paper old manually or threw up a paper roll, We probably want to go through that paid role set up process. We'll do that at a later presentation, and we'll do that. You can get there by going to the employees. Drop down, payroll set up right here. So I'm gonna go to the employees dropped down and payroll set up. And that'll take you back to a wizard, which will help you to go through and set up the payroll in a step by step process. So I'm gonna close this back out once again. 54. 255 Run Payroll Setup Process: in this presentation, we will run the payroll set up process within QuickBooks. In other words, we will run the payroll wizard in order to set up the payroll items and peril settings within. QuickBooks, here we are on the home page. We have the open windows open. We're gonna go through the payroll wizard now and set up the payroll process. Now, you need to do this whether or not you're running the payroll on a manual system or if you have a paid payroll, you're still gonna go go through here and set up the payroll processing. In order to do this, you're gonna need to know some things about the payroll. We need to know how often we pay period. And if we're going to set up what type of benefits we have, do we have ah, health insurance of 41 K retirement plan. What kind of exemptions will be in there? So we'll go over those as we go through this. And if you're gonna enter the the employees through this process, then you're gonna need to know the employees as well. It is possible to go through and inter employees later too. So you can add employees at a later time. But if you're gonna need to add, typically at least one employee through the important the set up process the Wizard and then this process will also set up the payroll items and everything we need in order for payroll to run properly. So let's do this. We got we've here. We have the paid payroll set up and we're gonna set up this wizard. And again, you wouldn't do the same process even if you were using, like, the manual payroll as a test function as well. So we're gonna go up top to go to the employees, and we're gonna go out down to the payroll, set up payroll, set up employees and payroll set up. That should give us a ah wizard that will then open up, which will give us kind of a walk through an interview type process to set up our payroll. First question have have you or any employees ever received a paycheck yet? And we're gonna say this is a new payroll set up for us, so we're going to say no, no, no paychecks have happened of thus far. If you are running a continuous payroll. Then you gotta have the issue of, uh, making sure that all the payroll is in place for the current time period. And if it's for the new year, that's not too bad. If it's in the middle of the year, you gotta be careful and make sure that you have. You have the payroll set up properly because there's gonna be some caps, as we'll see when we do the payroll processing that will need in the system. Somehow, in order to calculate those taxes correctly, do you need to pay employees today? No, hopefully not. We're not setting them up today, so we're gonna go ahead and continue from this item. Most people will be using the typical new employer set up where we have QuickBooks automatically provides all the pay types and benefits commonly needed by new employers. You can add to these later when you need Teoh or the customs set up where we're going to set it up ourselves. I'm gonna go ahead and keep it at the typical new employer, set up and continue their well. Now add payroll information, and this is going to include employees, and they're suggesting toe have the W. Ford's. That's what we usually have. The employees fill out before we start the process, having the W four forms for the Social Security numbers and what not needed for the employees. So we have the new employees here. We typically need to add at least one in order to move forward. So we've even if you want to set the rest of it up and add new employees later, you typically need to add at least one here in order to move forward. We're gonna add our employees information. It's gonna be Anthony were just made up this name. So Anthony, there's a mocking boy mawr and we're gonna give us the address is gonna be necessary here because we need it on the W twos and Debbie threes. Here's the address that we're going to use. This is and this is just a home for sale in California. Beverly Hills. Very expensive. Hold if you'd like to look at it. But there's a random address here for our mock employees for our just a test our data. So we're going to say next once that has been input, then we're gonna need the Social Security number we're going to say it. ISS 68 1848347 Mock Social Security number Date higher. We're going to say is January 01 Ah, 1 21 That's January 1st 2021. We're gonna start this at the beginning of the year. The year 2021. No release date, date of birth. We're not gonna add. We're gonna say Mayo here and all. Obviously the ones with the ass tricks is that are red are required fields and so will say next. Now we're gonna check off the information that applies. We're going to say that he is an hourly employees as opposed to salary. We're gonna put the rate at $25 then we're gonna check off what applies here. Do we have double time? I'm going to say that we have the time and 1/2 is something that's going to apply. We're not going to really have a bonus situation. We're not gonna have a commission situation where piecework, which is basically they would be making stuff a piece by piece. We're getting paid by what was done in piece by piece, a 1.5, we could put the amount, but it should calculate automatically at 25 times 150% or 1.5. So I'll keep it there and will say and note that pay periods up here we may want I'm gonna change, for our example purposes monthly. Just so we have fewer pay periods, most typically would probably be bi weekly or semi monthly or even weekly. But I'm gonna give it monthly so that we have less pay periods within the year. So weaken cr example process. So I'm going to say next. So we have cash advances, mileage reimbursements, these they're all options that we could have. I'm not gonna include it for our example here. We're gonna keep him basic for this example. So we'll say next. Direct deposit information can be input here. And that would be for direct deposit deposit directly into Anthony's ah, checking account. And then we're gonna have the state information. We're going to say that we have the California State subject to unemployment. We're gonna say California. So we're going to say the state will be the California for both. While working 2018 did live in any other state. We're gonna say no if if they do live in other states, that's going to complicate things of all a bit in terms of the tax calculation. So we're going to say next This is where you would need the w four to enter this information because we need it for federal income tax. That's not what we're not just crying. This is this is needed in order to calculate the federal income tax. So we need married or get we need that. It's gonna have four exemptions from the W four. No extra withholding non resident doesn't apply, doesn't apply subject to Medicare, Social Security and federal unemployment. So we're gonna keep it at that and say next once that has been completed, state, we're gonna keep that the same it might. They could differ from the state and the number of allowances. I'm gonna keep it the same at four and with holdings, and we're going to say, subject to state unemployment, employed training, tax and disability. Those will change from state to state. And that's really where the paid service helps a lot, because the once we get into different states, it starts to complicate matters a lot, even though the state will mirror the Fed in terms of U. S. Taxes, for the most part. But you know, it's helpful. Have QuickBooks to help us out with that stuff. So we'll see him next. If we have more employees would go ahead and say Add new. But I'm just gonna go ahead and continue. So we're gonna continue with the one employee at this time, and then we continue here to go to the tax setups, so I'm going to go to continue, and that will set up the tax information, set up your payroll taxes so we'll say continue. Ah, do you file your 9 40 ones or forms 9 44 Now this is going to be the 9 40 ones of the quarterly's, which most payroll will have to do unless you don't have to, Meaning if your payroll is minimal, then you have to 9 44 so typically would be the 9 41 I'm gonna keep that as the default Allied. You have to look and see what the requirements are for your individual needs, based on basically how high your payroll is. So here are the federal taxes were going to say Okay and continue knows QuickBooks is basically setting up all the rates for us, which is great. That's the point. QuickBooks can pull in all that information and set up the rates and do those calculations for us, including the complicated ones, which which are the progressive tax and not just the flat tax calculations and the states, which will differ, which can add complexity. So now we have the 9 40 payments include the federal unemployment and shoot assurance FOTA . We're going to say we're gonna pay by check or e pay. We're gonna keep it at check. It's gonna be paid to the United States Treasury, the Fed, the iris and we're going to say quarterly, usually frequent. That's what we're gonna keep it with quarterly Again. That could defer depends on the needs Based on basically how much Ah, food tether is the typical was quarterly. If it was, if he had a lot less food toe, you may only have toe pay it annually. So we'll say next. Same thing for the 9 40 ones of the 9 44 This is Social Security, Medicare F I t. We're gonna pay that by check were gonna pay it to the United States Treasury. The I rest the Fed, and then the payment here will depend on what our needs are based on what our payroll is. We're gonna keep it here at monthly for this example, and we're going to say next, here's the California payments to the E D D employment development Department. For this is California still change from state to state? We're gonna need a state number here. I'm just gonna add a number for our example, and then we're going to save payment frequency again. This will depend on how much payroll that we are, so it would have to look at that by payroll requirement. Ah, and it could differ. Obviously, if we if our payroll goes up, then the state wants to be paid more often. If we have less table they make let let us pay later. Also depends on our payroll frequency. How often we run payroll. Here's argue I, which is our state unemployment and every state will have ah state unemployment of some kind. Remember? So we'll have that here will keep it at quarterly. Same here and say finished and see if I can read. Put a number that they will say it's appropriate. Gonna try this one and say finished. Now we'll continue through here and so now we'll just go and finish this up and go to our payroll center. So that will take us to our payroll center. We should be set up and ready to go. If you If you also check on the drop down list up top and go to the payroll item list. This is this is similar to items for a invoice for for the invoices. So if I gotta lists and I goto item lists, remember that we had items here If we had items head up, that would be for inventory items and service items to help us to inter date it into gonna go to company home into an invoice or sales receipt. And there's those are gonna help us to know what accounts are gonna be hit and what not when we when we sell inventory were a similar thing for payroll. We're gonna use these items, these items, they're gonna help us to basically just set up this information and apply this information to the correct accounts when we run payroll so you can go through some of these items and start toe. Look at them. I mean, if you double click on it will give you information about how the items air set up. We'll take a look more about these items when we set them up on the manual payroll because we'll have to. We'll have to go through and look at those items of what those items air doing. And you may want to go through and make changes to those items to see where they're gonna be reporting on the financial statements. 55. 260 Process Payroll Plain Payroll: In this presentation, we will process payroll and QuickBooks, a plane payroll, a payroll with one employee and no benefits so that we can see how this information will process and use it as a comparison going forward. As we add levels of complexity within QuickBooks and we are in the home page. We currently have the open windows open toe, open the open windows, go the view, drop down and open windows list. We're gonna go down here to the employee section. We're gonna run a payroll, a simplified payroll with our one employee by selecting the pay employees section. If you're in the free version, you could still test these out into similar tests in the manual version, which is great, but this tap might look a little bit different here were on the pay payroll tab, and we're gonna were on the Pay employees tab. We're gonna go to pay employees here. Once you do this and go through this process that screens will look similar. Whether you're in the manual version or paid version. We're gonna go ahead and say pay employees in this paid version, and it's going to say, Hey, we haven't set up a checking account yet. And so if you haven't set up a checking account, we're gonna set up a checking account so that we can run things. So looking to say yes, let's sit one out. It's gonna be a bank account, and I'm just gonna call it the checking account. It's gonna be a checking account, and that's all we need for the account type. And we're going to say save and close. And now we can move forward and process our payroll. We're gonna be entering the payroll as of the year 2018 here. So we're gonna start with January 31st 2018 the first month. Just be aware that if you're kind of testing the payroll, the paid version, the system has toe have the pay tables in it in order to process the payroll, and they only have to pay tables up to a certain point. So you may be a little test, in other words, in the past, because the pay table should be there. If you try to test too far in the future, it'll have problems unless it uses the same tables, which it could. But it may have difficulty. So we're going to stay here in 2000 and 18 and we're going to then into the date. So if you want to test this in other words, at different time periods, you could do a similar process in either the year we are in or possibly the prior year may even be safer because then it should have the tables all the way through to the end of the year. If you're testing the data, so we're gonna go in January 31st 2018. We're gonna pay it on the next day 020118 So we're gonna pay each month, and so it will be at the end of the month. That's the end of the pay period for that full month. And then we're gonna pay it on the next day, so we'll have that kind of timing difference. And we'll see how QuickBooks deals with that when we process the reports. So then we're gonna check off Anthony here, and we're gonna have hand written checks. I'm gonna goto handwritten checks and 1001 uh, here, and I'm not gonna spend too much time are going over the check process will take a look at that and later presentations. What we want to do is just see how the calculations will be formatted. So then we're gonna check off Anthony, and then we'll go into Anthony More here once there. Then we're gonna say the hourly rate, this is all we should need to fill in. And QuickBooks should then fill in the rest. The data forest. That's the best. The beauty of it. So we're gonna say for this entire month of January is 1 61 hours and over time is one hour of overtime. So 1 61 and one hour of overtime and then QuickBooks just populates everything else for us . So notice, of course. What it did gross pay overtime 25 times 1 61 and 7 37 50 times. Would it will give us that and then the federal with holdings. This is really what we're paying for here. We don't know. That's tough to know because he had to have tables to do that. And that's a real pain to Dio by hand will see that in a later presentation, but it's not something you really want to have to dio for a lot of employees or even one really. So then you got the Social Security and Medicare, which is a pretty easy thing to calculate, typically, for the most part until the cap is hitting. So that's 4025 plus 2 37 point point five times point point 062 So it calculated that for us rounding it to the penny, and we say that the Social Security and then the Medicare for 25 plus 37.5 times point 0145 gives us the 58 80 91 to get round into the penny here and then the California taxes again , these air to that that we want help with because the state taxes will differ. California. This will be a similar kind of progressive tax, meaning it will have different tax rates, as does the federal. And therefore we have to look used tables, typically and Adametz again, something that we don't really want to have to do. And so it's nice that the system will well, that's what we're paying for, really, and then the disability again Nice that the system will pay for that, then we have the employer. So the net check years, of course, This amount the gross pay bindis what we took from them. Here's the Net check and then on the employer side, we've got the California training tax again. Something very nice that the system helps us to calculate, not coming out of the paycheck. It's a California tax for the employer, only Social Security matching. We've got the Medicare matching. We've got the federal unemployment, which is employer only tax. So it's here. It's not coming out of the paycheck at all. We're paying over and above these air, all being paid over and above what's being pulled out of the paycheck and then the California unemployment. All these very nice to have paid system. So QuickBooks will calculate what they are again. The soul security, Medicare. Not too difficult, flat taxes to understand. But the rest of, um could be a little bit more difficult to to no and calculate. And therefore we rely a bit more on the system, typically for them to do so. So then we're gonna say save and close, safe and close. We'll check it. Everything looks good. Everything looks proper. dates. Fine. Everything's good. Then we will continue with this process, and I'm gonna go ahead and create the paycheck. Once the paycheck is created, we can either print the paychecks or look at the stubs and know if we're given this by hand . We still need to give the employees some things. I'm gonna go to the stub and just preview it. So even if we hand write the check, we can hand write the check for the net check. But we still need to give them something like this to tell them. Hey, this is what you earned. This is what we took from you and why? Because we're not gonna keep it. We're gonna take it to the Fed and here's the Net pay. So I'm gonna close this back out, close this out, close this out, and then let's just check the banking account, the check register by, go into banking up top use register. And OK, here's our one check that we just wrote. If we want to see the detail on it, we could double click right on that paycheck, and it will give us the detail and then pay check detail here. Kisses back to this detail. So when it closes back out, close this back out. Next time, we're gonna take a look at the reports and analyze what's going on with the payroll reports . And actually look at the W two format as we go so we could see how that's being differentiated as we add levels of complex complexity and the form 9 41 which is going to be, ah, the quarterly reporting forms. 56. 262 Payroll Forms After Plain Payroll W 2, 941: in this presentation, we will take a look at payroll tax forms after running a plane payroll for one employee to see the effect on the forms w two and 9 41 And then we'll add levels of complexity into our payroll and see the changes as we go within. QuickBooks, here we are on the home page. We have the open windows open. You can open the open windows, going to the list, drop downs and choosing. Sorry that the You drop down and go into the open windows list. We're now going to take a look at the reports and the forms for payroll. We we ran an easy payroll. One employee, nothing special to it. Let's link and see what happens to our where reports from that. So we're gonna go to reports drop down. We're gonna go to the employees and pave role. We're gonna go to the payroll summary report. That's kind of my go to a report for payroll within QuickBooks. At least we're gonna change the dates from a 10118 to 12. 31 18 So we've got our one employee. This looks kind of like the pay stub that we would give. And we have the hourly and the, uh, hourly pay in the overtime for the growth day. Then everything that was taken from them, including, like we would see in the pay stub, the taxes in essence. And this has given us the net pay. And then we also have the employer taxes, the stuff that we paid over and above as the company as the employer over and above the gross pay. The total is, of course, the same because we only have one employee if we had multiple employees than the total would differ. So here is our report from that one payroll that we have entered. Let's take a look at what would happen if we were to process the quarterly reports the 9 41 and the yearly report just from that one paycheck, the W two and W three. To do that, one way we could do that is go to the employees up top and then scroll down to the payroll tax forms, payroll tax forms and w twos, and we could see here we've got the process payroll forms. We got to create the W two e file and we've got the view tax form history. We're gonna go to the process payroll tax forms. We're not actually going to finalize the process here, but we want to see what it does that we're gonna go to the process forms and go through the the worksheet that we will be using Now. This, of course, takes us to the employee center, which we could have started going to meeting here. Employees Center and in the paid version were on the far tab over here. This is what we cannot really do on the manual virgin. We won't be able to process the payroll tax forms. That's what the paid version does for us. That's one of the benefits of having, of course, the paid version. It'll start to generate this so we can see what how it's putting it together as we go. So we've got the 9 40 ones. The quarterly. The W to the W three. We're going to start here. The 9 41 could just click on it, create or just double click on it. Take a look at it. We're going to say that this needs to be into the first quarter So it's gonna be January February March 3 months in 1/4 because there's 4/4 in a year, so it's gonna be a ho 3 31 18 That's what we want. Uh, 3 31 18 March 31st into the quarter. Okay, and then it's gonna process our report. It gives us this little interview worksheet here. I'm not gonna go through the worksheet. I'm just going to say next at the bottom and just want to see what it's going to be generating for us so we can see here. It doesn't look exactly like the former might look a little bit different in this worksheet format, but it'll this ties out pretty much exactly to a 9 41 form. It's for the first quarter here. If we scroll down, we see. Okay, here's ride one. We've got the number of employees and we've got the wages and tips. This one doesn't seem populating quite right. You think you'd be one, but that's okay. We're gonna keep that for now. Obviously, the problem is that we had to other pay periods that should have been in the payroll period . Most likely that aren't there yet? Any case, we have the wages and tips of the 4062 that is going to be straight from the wages and tips that we have entered their growth. That's gonna be both the regular and overtime. Then we've got the, uh, the line three federal income tax withheld, and that is what it is that I can't really tie these two numbers together. Remember whatever QuickBooks came up with with that number using the tables or whatever they did, it is what it is. We can't double check it, really. We just we That's what we took from the paycheck, as opposed to these amounts, which they're gonna make us recalculate. So noticed this number is the same, which is the taxable Social Security. Because we nobody's hit the cap yet. This number is double double employed er and employees portion. So if we compare that to our data input, we would have to add together that employer side that was on the bottom left of our data input and employees side, you'll recall, and to get that number and then this number is the same as our wages as the Medicare wages and and notice These will change as we had complexity, because this f I t could change. If we had, say, a 41 K plan, it might be decreased. And this one could change if we had a cap. And so so just be aware that they might not always be the same, even though they're some form of wage number and are simplified method. This is where they start, and they are the same the way most flight times Point ode to nine. That's gonna be twice the rate for Medicare for like a single Medicare, so employer and employee portion within the rate to give us that 1 17 Then we add those up . We had all of them up, and that's where we basically end up, and we still owe it because we're not paying it in this example. We haven't paid anything yet, so we're just going to say that that is what it is and the balance is due, so we'll go ahead and close this back out. Now let's take a look at the W two and W three this form, so I'm back in the payroll center forms W two and W three C what it looks like. I'm just gonna double click on it. And we're going to say all employees for the end of 18 4018. Just see what happens and say OK, note it's using the old formula because 2018 isn't current like here, But this is a test, a test, So we should be okay using these forms. So I'm gonna say next on this screen and we'll see that we have this information here. I'm going to scroll through here. We're not gonna go through the interview process going to go next and see what we have. So this is the W two should look somewhat familiar to what we would see in the W two form here. So we've got our information. And then, of course, here's what we're concentrating on. What's it doing with the numbers? These three numbers are gonna be the same for Anthony More here. So we've got these three. They're not differentiating between Social Security wages and Medicare wages and F I t wages. And that's because we don't have things that would differentiate them, such as hitting the cap here on the Social Security or the 41 cape. The federal income tax for that one payroll that we ran is what it is. That's what we withheld. So that's what basically, Anthony more paid to the ire s so far by us taking it from them, not giving it to Anthony and given it Teoh the IRS. And then we've got the Social Security and Medicare. This is what Anthony has paid just the employee portion Notice it doesn't tie out to the 9 40 ones now because you have to double them for that to happen. And then if we scroll back down, we've got the California wages as well the withholding for SD I state disability. And then we have the California withheld here. So this looks like the standard w two we would we would expect if we move forward, I just sit next to times to the W three form. Then you can have the same information. We only have the one paycheck. So the W three is summer summing up the W two. So the major numbers we're looking at here same wages, same withholding federal soul security and Medicare for the one employee that we have, this summary summing up the data on the W two's. We only have one paycheck for one employee, so the W three will match that, in essence, for the major income numbers and withholding numbers. 57. 264 Add 401(K) Payroll Item: In this presentation, we will add a payroll item into QuickBooks, a payroll item it related to a 401 K or retirement benefit. This will add a level of complexity that we will then use as we process payroll into our payroll problem within. QuickBooks. Here we are in the home page. We currently have the open windows open toe, open the open windows, go to the view, drop down and select the open windows list. We are currently in the paid version. If you're in the manual version, you may want to go through and enter these types of items by going through the interview process again, made and go into the employee's tab and then go into the payroll, set up and go into that interview process because it will give you more of a a questionnaire kind of format, which you may not get in the manual introversion. If you go straight to lists as well do here and the paid version, we're going to go here to the lists. Drop down and we're gonna go to the payroll item list. The payroll item list. These are gonna be the things that kind of drive the payroll processing. And what we're gonna do is we're gonna add one related to the 401 k plan. That retirement plan. Add a lot of level of complex ethnicity to our payroll as we process the next federal. So we're gonna go to the payroll items drop up down down here, and we're gonna add new. So we're gonna say there's gonna be a new payroll item and we'll go through this interview process. Now we're gonna use the easy set up. I don't really want to do the custom set up. We're gonna do the easy set up so quick books will help us, Which is nice. We have the these options were going to set up a retirement benefit plan or simple IRA and say, next, we have different retirement plan options. We're gonna choose the four away K. I'm not gonna go through the different types of plans now, but those air worth researching, we're going to say next, the vendor, we're just gonna have a mock vinger for 401 k This is who we would pay. So we would collect the 41 came money and then give it to you basically the vendor in order to set up our 41 K for the investments that we would have. I'm not going to set up any regular payment schedule. We're gonna keep it as is and say next. And that's it will say finished. And there we have it should set up that 41 K I'm gonna maximize this items list again. And if we go through here, we'll see that. Now we have the 41 K match and the 41 K employees. So an employee and employer portion we're gonna now go to the employees and set up the 41 k for the employees were just going to set up the employee portion at this time. To do that, we're gonna go back up to the Employees Center, employees drop Down Employees Center. We're gonna go to our one employee, which was Anthony, and we say Anthem, we set up a forum or 401 k for you, and he says, Great. So we're gonna go in there and enter some information for Anthony's change. We're gonna go into the employee information down, actually, payroll information. That should say we're gonna go into payroll information and we're gonna add the additions on the right side additions, deductions and company contributions. These air with these types of items will go as opposed to the earnings items, which will basically be hourly overtime and whatnot. So we're gonna go over here to the items and we are going to add a 401 K and we want to add the employees, not the match, but the 41 K employees. That's what where we will start and we're gonna enter the amount of 203 So 203 is going to come out of the paycheck monthly. That's gonna be paid by the employee. No match for the employer at this time. For the 401 k we're gonna say OK, and that data has been saved. Next time we'd run the process, the payroll will see that difference and see what that change will look like in comparison to the prior payroll without the 401 k 58. 266 Process Payroll With 401(K) Plan: In this presentation, we will process payroll payroll that includes a 401 K employees e contribution so we can compare and contrast it to the plane payroll that had no contributions within QuickBooks, Here we are on the home page. We've got the open windows open. You can open the open windows. I go into the view dropped down and selecting the open windows list. We're gonna go ahead and run payroll now for the second payroll, this time with the new for a one K plan. So we're gonna be down here in the employee section. We're gonna pay employees once again. We're jumping forward to another month. We're going to say this is going to be the second month of our payroll. If you're in the manual version, you'll have the process. Payroll skin will look a little bit different here and the paid version we're gonna say pay employees and then we'll get back to a screen that will look similar. Under the two versions were going to say that the pay date the period end will be February for the end of February, which will be to 28 for 2018 is what we are working in here. And we're going to say that we paid it the first day of the next months 030118 and OK, so first day of the next month, we paid it, and then we have the hand written checks. There it is. We're gonna check off Anthony More and select Anthony more and see what we have here. Now, you know, we get this this pop up, and that's basically saying that some caps have been hitting. So let's read this and see what they're telling us you have. You may notice that the amount of one or more taxes on this paycheck is either smaller than usual or zero. This is because Anthony Moore has reached the annual wage limit for these taxes. So remember that Fota Suta has that low wage limit. So if you're used to entering data at the end of a year, for example, if you go into payroll and you start doing payroll at your end, you'll kind of hit a shock at the beginning of the year to look different. All of a sudden, because of these of these caps, that will happen so just be aware of those caps. And so we're gonna say, Okay, thanks for letting us know that it's entering the same amount in terms of hourly and overtime wage will keep that the same so that we can make the comparison. And so that's gives us our gross pay. That's the same as before. The only change here now is the 401 K has now changed. Well, that's not the only change. But that's the big change. We added the 41 k it's putting them there automatically. It's also showing over here as the other payroll item. Then we have the federal withholding also changed. And that's because we have to take into the 41 k the federal with holdings, which is basically our federal taxes that need to be adjusted by the 41 case that we don't need to go into the why you know, the calculations that look at the table. But that should happen because what's happening is the gross pay is going down for the tax calculation related to the federal income tax. So this is decreased. That's good. That's the other change. The Social Security and Medicare should be the same because it's not gonna be reduced that , for one kid doesn't reduce those items and then the with holdings for the California and disability. And then we have our portion the employees, er, taxes for California tax, Social Security and Medicare matching these to the federal unemployment. So these air the employees, er tax that we're paying over and above the growth pay. These are the taxes being paid by the employee and taken out of their paycheck to get to the net pay. So we're gonna go ahead and save those changes and there is our information and we're gonna looks everything looks good. Looks OK, So we're gonna say, continue and create the paycheck. So then we could take a look at the pay stub. Once again, preview. We have to give the paste of every time. Now we have the current check data and the year to date data, which consists of two checks now and within this information, of course, now we have the 41 K plan. It's pulled out kind of as a separate area because these are the benefits that we have, as opposed to the mandatory taxes. So it's closed this back out. Close this back out. Close this Back out. Close this back out And then we'll go to the banking up top used register. And OK, so the only items we have so far are this check and this check, and it's just processing payroll. So these are the two difference. If we double check on this will get back to that information and ah, that will be our paycheck. Here's what we're going there. Back to the paycheck detail. There's our payroll check. 59. 268 Payroll Forms After Payroll With 401(K) Plan: in this presentation, we will take a look at our payroll forms after running paid role. That includes a 401 K plan within QuickBooks. Here we are in the home page. We currently have the open windows open. You can open the open windows that I go into, the view dropped down and the open windows list. Let's take a look at our reports this time and then go into our forms the W two and W three and 9 41 to see how they differ. We're gonna go to the reports, drop down. We're gonna go to company and financial. Take a look at the balance sheet standard first balance sheets, dander. We're gonna put the date range of top from a 101 to 1. Teoh, let's say 010118 to 12 31 18 And okay, so here's all we have on the balance sheet. So far, we have our paychecks that we have a process double clicking on them. Here's our paychecks scrolling down. Here's the payroll. Liabilities will concentrate more on these financial statements later, but I just want to give an example to show these financial statements because these are the core financials. So here's the reports drop down company and financial and the profit and loss. The other main report changing the date range so far from a 101212 12 31 18 It should be. Let's do that again. No. One. No. 118 to 12 31 18 And all we have is the payroll. It's grouping all payroll into one group payroll taxes as well as the gross pay on the income statement. So we have no income. All we've done is run the payroll. So now let's run the payroll forms and see what those look like. We're gonna go to the employees, drop down, we're gonna go to payroll tax forms, and we're gonna process the payroll tax forms that 9 40 once in the 19 forties. I've 9 40 ones and the W two and W three just to see what that is doing with our to payrolls that we have done so far. Well, first, take a look at the 9 41 so we'll click on the 9 41 we could create or just double click on it like a double quick on it. We're going to say this is for the quarter ended over three. 31 18 So Janu, February, March the first quarter 03 31 18 And we're gonna say OK, and that will give us our payroll processing form. I'm gonna go past the interview process and just take a look at what it's calculated for us . So we've got the wages and tips, which should be the the to wages and tips there. Note. However, now that this number differs from the Social Security wages and the Medicare wages, Why? Because, in essence, this is the f i T wage and it's being decreased by the 41 K So that's gonna be one of the differences. As we start to fill this up, that will have to see that we can start to note on the 9 41 and this number over here should be the gross wage, and it's not being reduced by the 41 K That's what they earned not being reduced by the 41 k These numbers are gonna match our our to payrolls, but we have to have both the employer and employee portion weaken, Double check it by this rate being double the standard rate. These were gonna add those those two up an adjustment here and that will be basically our total liabilities. So we could see how that if we throw in the 41 K It kind of makes a bit of a tweak in our form here between these numbers which were the same when we had no 41 case. Now, if we close this back out and we're gonna go to now the w two form So we're back in our employees center where on the were on the file forms We're gonna go down down to the W two w three form double click on that. We're gonna change the date to 2018 and then I'm gonna say OK, and we're gonna say, OK, it's using a different version. That's fine. And then I'm gonna go ahead and say, review and edit, review and edit this and go next to the next page here. Want to look at the calculations that it is giving us? We're gonna go next and next. Ok, here's a mock kind of form that we have for the W two for Anthony and note what changed here? We have to payrolls that happen now. And the thing that changed here is that if we sum up those two checks than the gross pay is really these two, these two kind of line up to the gross pay and this pain, which would line one which we typically think of as our actual pay is really not actually right. It's being decreased by the 41 K So now we have these three lines which differ because of the 41 K So this one effects or this is what we report for the for the 10 40 of course, and the related federal income taxes, which also was adjusted in the second paycheck. Because of that, because of that. And then we've got this old security and Medicare. So remember, this is only the employee portion, not the employer portion. It's half, what with on the 9 41 And then if we scroll down here toe box 12 we can see basically our difference if we pull up the calculator were going to say OK, the difference between this 8125 minus the 79 to 2 is 203 That's the 203 That's the 401 K that the on the employee portion that was put in their retirement plan now checked off. So those are gonna be the difference. Is that more complications that we have, that we have state taxes here and the state with holdings? 60. 270 Process Payroll 401 K Employer Match: In this presentation, we will process payroll that includes a 401 K employer match so that we can compare it to payroll that with processed without a employer match and a 401 K and without any for a one k within QuickBooks, here we are on the home page. We currently have the open windows. In order to open the open windows, you want to go to the view, drop down open windows list. What we're gonna do is add the matching to the 401 k So what? To make that adjustment, we're going to go into the employees into the employees center. We're gonna go into our one employee. We said Good news, Anthony. We're gonna include matching now. So we're gonna match what part of whatever you put into the 401 k plan. So we're gonna go into the payroll and to see what would happen if we add matching within QuickBooks. So we're gonna go here, and I'm going to say Okay, we already had were in the payroll information. We heard it had a 41 K for the employees. Now we're gonna add that employer match portion and we're just gonna say OK, the match, Let's say it's a 50% so I'm gonna say 203 times 2030.5 is one A 1.5. So we'll say 101.5 had to be uneven had Teoh. So we're gonna say Okay, there it is. And okay, we'll run that. And now let's go ahead and run the paperwork payroll with that. So to do that, I'm gonna closes back out back to the home page. We're gonna run the payroll one more time or not. One more time, once again running the payroll, we're gonna be on the third month. This is the third payroll, and now we've include the matching. We're on the third tab here and the first half here pay employees, we're gonna go ahead and pay employees. Now, if you're in the manual version, then this screen will look similar. And also, if you're in the manual version, you should have the same information in the employee. And you can kind of test that out on the free version if you'd like as well. So we're gonna run the payroll now. It should be for the end of March. So it's gonna be, 03 31 18 and then we're gonna pay it on 040118 So those are gonna be our paid dates. We're then going to go through this. Everything else looks the same. We're gonna check off our employees and click on Anthony, and it should populate as it has in the past. We've got the 1 61 and the one everything populating over here as it has in the past. Hourly wage, the overtime wage. And then we have the 401 k This is the employee e. You'll note here the employees e portion and then we have the federal withholding, which it looks like it's the same because that didn't change with the employer matching the employer matching is not being included in here. The employer matching is going to be something that is going to be included in payroll or given to the employees over and above. In other words, us as the employer, our pain over and above this standard gross wage, as opposed to these items which are being taken out of gross wage. Really, we're just paying the grills wage and putting part of it to whatever we say. You're like the 41 K plan. This over here is adding over and above the gross pay. So So this amounts being calculated based on the gross pay which was decreased this amount minus the employee portion of the 41 K and therefore is the same as the prior check. Ah, and then we've got the Social Security and Medicare, which those haven't changed since the first check when we didn't have any for a one K because the 41 k doesn't affect those calculations. And then we've got the California and the disability states will change states that state. And then we've got the matching over here on the company's side. So notice over here. It's kind of like the payroll taxes which are the payroll employer taxes. It's being listed over here as something that will be paid over and above the gross pay. We pay the gross pay, take this out of the gross pay, but really we're only pain that grows pages depends who's getting the money, whether it be the employee or someone else. These are items that are being paid over and above the earnings. The growth pay of the employees, including the matching portion of the 41 K in the Social Security employer and the Medicare knows the federal unemployment and that in the California unemployment are gone now. And that's not because we made any change that doesn't have anything to do with the 401 k that has to do with the cap has been hit, and therefore we don't pay anymore. So notice how early that happens. That could happen in the first quarter of payroll. If we're running, Pero more than each month, then that will happen early and again. We won't even know what those taxes are. If we just started looking at payroll later on in the year and then in the first quarter will roll around and you'll say, Oh, that everything looks different all of a sudden, Why? Because these caps had not yet been hit in the first point quarter of the So that's it. We're going to say save and close and will process that paycheck so we'll continue here and everything looks good. So we should be okay to create the paycheck, take a look at the pay stubs, we would have to give these previewing the pay stubs, and once again it gives the current check that we just wrote. And now the year to date, which includes three checks. At this time, closing this back out. Closing this back out, closing this back out and checking our banking account check register, going to the banking, drop down and, uh, use register and the checking account. That's the one we want. So all we have are the three checks we've written now to the same employees. Here's the last check. If we double click on it, there's our information paycheck detail. There's the detail for it. 61. 272 Payroll Forms After 401(K) With Employer Matching: in this presentation, we will take a look at payroll tax forms after payroll have been run, which includes a 401 K plan and employer matching. So we can take a look at the difference between these payroll reports and those run before having a 41 K planned with no employer matching. And before that, not having any 41 K plan at all within QuickBooks, here we are on the home page. We currently have the open windows open. You can open the open windows by going to the view. Drop down and open windows list. We're going to start off with the reports, drop down and go to the company and financial and then go down to the balance sheet standard within the balance sheet. I'm gonna change the date to 12 31 1 it that's gonna be the year in. We're working on course. They checking accounts is negative. We just have those checks that were written. We have the payroll liabilities and the equity section, and so we won't get into a lot of detail here. Just wanna show that report as one of the main reports that will be going back to you, then we'll go to reports. Drop down. We'll go to company and financial. Take a look at the profit and loss reports and we'll change dates from a 10118 to 12 31 18 And once again I'm not gonna go into a lot of detail. But you can see that everything's being grouped together in the payroll expense. One account for the payroll that we've been processing. So it's all the gross pay. It's going to be included in there as well as payroll taxes. Now let's run the process. The payroll reports that 9 41 for the quarter that we've got so far and the form W two and W three. So we're gonna go to the employees up top, going to go down to payroll forms and process payroll forms. So we're gonna start with the 9 41 So we're in the 9 40 Once is in the paid version. We can't really do this in the manual version. Have an unpaid version. So we're gonna go with 9 41 create that form. We're gonna start off with the end of the third quarter's that ends on 03 31 1 date. So march 31st 2018. And okay, so we're gonna run this information, gonna go next down here so we can see the actual payroll report. Now, here's the payroll report. You'll note that it hasn't changed here, and we just ran the payroll for the third month, January, February and March. You would think that march would be in here. But note that we ran the check for March in the next months, and the payroll is going to be on a cash basis system. So just be aware of that. When we process the payroll, it's gonna be when the check is issued as to win, we're gonna report that information on the 9 40 ones and eso we're gonna have that timing issues. I want to demonstrate that now we'll show some problems later where we will simplify this process, that we won't deal with that timing issue and concentrate on the payroll. But when we also have to keep aware of the cash basis versus the accrual basis. So I'm gonna close this report. Let's take a look at the next month. So when it closes back out and let's see if we could run the payroll, go back to the payroll center and run the 9 41 again back in the payroll center and run it for the next quarter. January for January February March is the first quarter. Jan. Feb. March April, May June Let's go for, uh, the end of June 06 30.8. So june 30th 2018 and OK, and see what we get for that pay period. We're going to say next and then scroll down. So now we have this one. The one pay roll that we ran here for the one employee will be included here. So again, just be aware of that cause you would think that we ran the paper for three months January , February March. And it should be in the first paper in which it would be if we had issued the check within ah that month. But we issued to check the day after, and that's just an example, that kind of show that timing difference in this case. That's a difference you'll have to be aware of when you go from the cruel method Teoh cash method and you'll have to make adjustments for because the payroll reporting here, at least for the 9 40 ones, will be on the cash method. So here we have the wages that we ran for that one check, and then you can see that the wages down here for Social Security and Medicare are different. Why? Because this amount is being reduced not by the employer portion, but by the employee E portion. So it's gonna be a growth pe minus the 41 K that the employee put in. This is including the gross pay, still not including the for a one K, which pit was paid over and above the girls pay. Then we have that calculations for the 0.1 to 4 and the 40.29 That's twice employer and employee portion for Social Security and Medicare. This being twice what we would see on that one paycheck, which is all that it's included for this quarter now on on the employer and employee portion. In other words, this includes the employer and employee your portion, and then if we some those up, that's gonna give us the total liabilities. We haven't paid anything yet. We're not processing the liabilities in this example, so we owe the entire thing out in practice. Of course, we would process the liability and this should be just an informational return. So let's close this out and take a look at the W two and w three. So I'm gonna close this back out. We're gonna go back into our reports center, scroll down to the W two and W three, where the file forms W to Debbie three. And we're gonna change the date to 2018 and say OK and OK and then we'll process this. I'm going to review and edit. We'll scroll down and say Next and next and next. Let's just take a look at our forms here. So here we have our mock w two form for one employee. Now this, of course, is going to give us the data for year to date, which includes three payrolls. But it's not 1/4. This is would be what for the entire year. If this is all we had with the 1st 3 paychecks, so we'll see here once again that the 11 7 81 for the three paychecks is different. Lower in what the Social Security Medicare wages are. And that's because we took the Rose PE minus what was taken out in Box 12 which is the employee portion. So again, if we took the 12 1 87.5 minus the 11 7 81.5 we get the 406 the employees e portion that was taken out of the paycheck and thereby we get to reduce the earnings by that. Also note that, however, that this number will note first, that the Medicare is actually more accurate in terms of earnings for the employees, because it doesn't reduce it by what the employee gets to really keep. It's in their own. This is in their own 41 K plan. Also note that the employer portion isn't included in any of these in terms of the for a one K plan, which was matched over and above what's being reported here. So really, none of these are really accurate in terms of actual what was earned, because the mat, the amount that was given by the employer to the employee over and above grows pay isn't included in any of these any of these numbers, So just be aware of that. That thes thes numbers when thinking about actual earnings, actual value being received by the employees, they're kind of deceiving in some boys. We gotta understand the difference between the two, especially the 1st 1 because it will be reduced largely by a 41 K plan. So then we got the federal income tax, the security and the Medicare, these two matching Well, this should match what's on the 9 40 ones if we were to add both of them up for that for the first and second quarter now, because that's where we're at. And we had the first and second quarter because the 9 41 are on a cash basis and we wrote the check the month after it was run, even though we've only had the first quarter January, February March of actual payroll being process. And that just depends on when we write the check. I'm more that will be grouped in terms off the total for the year. It is what it is because those three months are for the entire year showing up here now, so the federal income would include what was reported for those three checks and on the 9 40 one's. Social Security and Medicare is going to be what was on the 9 40 ones. But we'd have to double this t match out what's included on the first and 2nd 2/4 so far of the 9 40 ones because this is only the employee side. And then, of course, we have the the employees E portion that is reporting here on the 401 k retirement plan checked off because we had the retirement plan the SD I and the state wages and with holdings. If we say next and next and we go to the W three, remember that the W three will be much the same. We only have one employee at this time that w three, in essence, summing up at least of a numbers standpoint, all of the W two. So it would be like a W three for if all the employees were grouped in one person, which they are only one person right now. So they would all be pretty much the same for these. These numbers 62. 274 Payroll Item Setup Dental Insurance Employee Paid After Tax: In this presentation, we will set up a payroll item related to a dental insurance dental insurance that will be paid after taxes so we can run payroll and see the effect on payroll as compared to payroll . Ran before we had dental insurance in the process within. QuickBooks, here we are in the home page. We currently have the open windows open. You can open the open windows, go into the view dropped down and open windows list. We're not gonna add a payroll item to do so. We're gonna go to the lists, drop down and go to the payroll item list. Now, if you're in the manual version, you just want to practice around in the free manual version. You may want to go Teoh the employees and just go through the full payroll process again. The payroll set up because I don't give you more of an interview process. This is the paid version which will give us an interview process here. We're gonna go to the payroll items drop up. We're gonna have a new item that we will set up. We're gonna use the easy set up, and that will hopefully help it out. and make it easier. So we're going to say next and go Toothy insurance benefits were setting up insurance benefits next. And I don't give us a little wizard that will set up for the insurance benefits. You can observe these benefits. Any of these are the ones. This is the place you go for these types of benefits so you can take a look at this list. We're concentrating here on the dental insurance at this time, so we're gonna add dental insurance. We're going to say next. Now we're going to say we have toe determine whether or not the insurance is gonna be paid by the company, pay for it or paid by the employee, or it's gonna be employed, pays for all of it. So part or all paid by the employee in this case, we're gonna just test out each of them and see what the effect will be on some of these different types of insurance. The 1st 1 we're gonna just look at is let's say that it's employee pays for, and what that means is that if that were the keys, that would mean that the employer is just basically doing putting them into possibly at a group, possibly getting a better rate for the dental insurance and taking the payment directly out of the check and making the payment directly out of the paycheck. So that's that's what would be happening. And we're going to say that the payment is then the question is, is the payment deducted for taxes? So, in other words, is there going to be something that we're gonna be able to reduce the growth pay for? And in this case, we're going to say that it's gonna be after taxes. If the payment is deducted before taxes, it would have to be part of the Section 1 25 plan in order. And if it qualifies, then that would be more of a benefit, Of course. So we're gonna start off here with the payment, is deducted after taxes and say, OK, next and we have the vendor. I'm just gonna call it the dental vendor. This is that we would be paying once we take the money from the employees paycheck, who are we going to give it to for the payment? We're not going to set up a schedule and next, so we'll finish this off and finish, and that will set up this payroll item. I'm gonna maximize this screen again, and we should have an item now for dental insurance. So here it is. We've got dental insurance here. It's a deduction and the taxable insurance. Now we're gonna go to our employees and add that for the employees who were gonna go into with the employees were gonna go into the employees center. And we're going to say, this is our new employer and say we got dental insurance. Would you like to take some dental insurance? And we're gonna go into the payroll info. And of course, our employees here's Anthony is very willing toe and to go into the dental insurance. OK, so we're going to the dental insurance here. We're gonna say, Add the dental insurance and we're going to say that the item, the amount we're just going to say is just $20 for the dental insurance. These office, they aren't real item numbers here, and so we're gonna have that. And then we're just gonna say Ok, and now we're set up. Now we'll run the payroll and see the effect of the dental insurance on the payroll 63. 276 Process Payroll After Adding Dental Insurance Employee Paid After Tax: in this presentation, we will process payroll after adding dental insurance. That is, employees paid after taxes so we can compare the payroll after including the dental insurance to that process before adding the dental insurance. We will do this within QuickBooks. Here we are in the home page. We currently have the open windows open. You open the open windows, going to the view, drop down and open windows list. We're gonna go ahead and process the payroll. So we're gonna be down here in the employee center. Another month has passed. We're gonna process payroll for the month of April, this time going to the pay employees down here, and then we're gonna We're in the paid version. So we're gonna have this screen. We're gonna go to pay employees. If you're using the manual version, you want to test things out, then it'll look similar to this screen. Once you get here, we're gonna be processing payroll as of the end of April. So April 30th and then we're gonna pay it the next day 0501 18 So the end of April, we're gonna pay it to the first day of May. Everything else looks much of the same. So we're gonna go ahead and check off our one employee and take a look at Anthony's paycheck by clicking on it. Same pay 1 61 and one hour of overtime. That's going to give us our same hourly and the same overtime growth pay. Then we've got the 401 K that we included last time That's going to come out. Not the matching portion, just the employer portion. And now we have the dental insurance. So the intentional insurance is being pulled out now to get to our net check, in essence, being paid by the employee. It we're gonna pay it as the employer. We're gonna write the check, but it came out of the growth pay here. It's coming out of the gross pay, So here it is. It's on this side, not on this side. It's coming out of the gross pay. We've got the federal with holdings. That didn't change it all because and it would if the f i t. That the taxes would go down because of this. So they're not getting, in essence, the tax benefit of US pain, this dental insurance. It's just that we're providing the benefit of pain it out of their check so they don't have to actually write a check for the insurance. And maybe we'll get a better plan through a group plan or something like that. But they're still paying it. Ah, here and it's not really deducting. It's not changing the federal withholding. It's not gonna be something that's gonna reduce their taxes as sort of the payroll tax level. So that's how it's being effected. Hadn't changed. In other words, the federal withholding, the Social Security and Medicare aren't changing. They haven't changes since the beginning because the 41 Kate and the Dental don't change the Social Security Medicare. They still are calculated based on the gross pay and then the California taxes here. And then we've got in which again, states will change from state to state. On this side, the employer portion being paid over and above, we've got the 401 k matching the matching portion notice. What we don't have, of course, is the dental that's not being paid over and above its included in the gross pay. It's just that we're not going to give it to the employees were going to give it to whoever in a vendor for the dental is. And then we've got the employer portion of the Social Security and Medicare, the matching and the food has been reached for both state and federal Fouda and suit state unemployment and unemployment, federal unemployment. So we're gonna go ahead and say save and close and continue with everything looks good. So I think everything's OK. So we're going to continue with that and we're going to create the paycheck once again if we take a look at the print Ah, the stubs so we can see where we're at and a preview. This is what we would have to get to the employees. We've got the current paycheck we just wrote. The only thing that's up here in the deductions is the 401 k for the employees, because that's really what's gonna affect the the taxes in terms of what's gonna be effective on the taxes. And you'll notice the dental insurance was put down here as a deduction down here not included in something that's gonna be reducing the tax. And so it's dental insurance is taxable. In other words, the weight that you know, the wages related to it are taxable didn't decrease the gross wages in our calculation. Whereas this did this portion did and then the non tax company items. This is gonna be the employer that was paid in over and above the gross pay what the employees is receiving over and above the the gross pay by the employer matching of the 401 k sewing clothes that back out. We'll close this out. We'll close this how? And then let's take a look at the check that was written. Go into the banking, used register and checking account, and then we only have the paychecks here. This is the last check we wrote. So we're just gonna double click on that. And we could see the differences, obviously, in the pay cheques here as well. If we go into the check, abound and pay check will get to the same kind of information that the actual check, of course here, the details. And so these are the These are the checks we've written out. That's the only activity we have so far in our check register 64. 278 Reports After Payroll Item Setup Dental Insurance Employee Paid After Tax: in this presentation, we will take a look at payroll reports after having entered the dental insurance, which is going to be paid by the employees so we can compare the papal reports after the dental insurance to those that would be processed before we had added the dental insurance within QuickBooks. Here we are on the home page. We currently have the open windows open. You can open the open windows by going to the view, drop down and select in the open windows list. We're first going to go to the reports. Dropped down, up top. Go to company and financial. Take a look at the balance sheet standard down here. Balance sheet standard changing the date just to the year end of 12 31 18 So here's our checking account that's been going down. All we have is payroll being processed. Here's the petrol liabilities that we have not yet paid, and then the equity section will take more. Look at the changes to the financial statements. In later presentations, we're gonna go to the reports up top. We're gonna go to company and financial and the profit and lost just to get an overview of these main to reports, of course. 0 1/1 18 to 12. 31 18 You could see that we only have the one number. All we've done is process payroll. We've got the payroll expense, including both employer and employee portion. Again, we'll explore that more in depth and later presentations. So now we want to go on and process that reports and see what has happened. So we're gonna go to do that into our employees, pay tax forms, and we're gonna go to process payroll forms. And then I'll go to the process payroll forms, which again is is in our employees center as well. In the file forms, we're gonna go to the quarter the 9 41 when a double click on the 9 41 and now we're on the second quarter. Remember, It's been January, February, March, and we're clearly on the second quarter because we actually process this for April, which is in the second quarter, and we paid it in May, which is in the second quarter. So we don't have that kind of problem of Okay, which quarter is this in? The papal period was in the second quarter as well as the paid date in the second quarter. So the end of the second quarter Jenny February March April May June 6 31 8 So 6 31 8 6 38 2018 OK, processing the payroll. We're gonna go ahead and say next year and here is our information. So we have the two paychecks now being here. Genya, February March March was paid in April. So we have the one that was paid in April. The one paid in May Making up this this this information If we look at this number compared to this number, it's different by it should be once again those two paychecks what was taken out in terms of the 41 K For the employees portion, the wages is gonna be the two last paychecks, the one that was in May and May in April that was actually printed in May in April of the 302 And then these two amounts are going to be the gross pay. So it's gonna be the growth pay which includes the total growth pay. It's not being decreased by the health insurance. It is being it, and it's not being decreased by its the girls pay. It's not being increased, I should say, by the employer portion of the 41 K being put into it. So the difference between these two numbers, then, is simply that the f i t federal income taxes decrease by the 41 case not being decreased by the insurance because we said the insurance was not, ah, subject to to decreasing the amount for federal income taxes. This, of course, wouldn't be decreased. In either case, the Social Security is what it is. It's gross pay right now. It should be pretty much the same until it hits the cap, where most plan times twice the rate employer and employee portion of these two amounts then would be the employer and employee portion of the two checks that landed were written in the second month. Ah, the second quarter, which is which is Ah, April in May and these adverts to up. But that's gonna be our total here so far for close this back out. We'll take a look at the W two and W three. Now we're back into our reports center. We're in the file forms, double clicking the W two and W three. We're going to say 2018 is our year and okay, we're gonna say OK, and then we're going to review and edit next. Next, Next. Okay, so now we have the information. This is the year to date information, of course, and you could see this is our typical W two type form for our one employees. This number differs from this number, and it's not different by the insurance that was paid because that's not being included in it. So the insurance was paid, in other words, by the employees. But it's not affecting the wages being reported. This 609 difference is the 16 to 15 50 minus 2 15 6 41 is the 609 That's the employee portion of the 401 k So here way have four checks Now. This being the four checks added up minus the employee portion of the 41 K This being the gross pay between these two of the 41 k the federal income tax withheld, it's gonna be just exactly the way it was calculated. Whatever it was calculated in the terms it was calculated to get to this number. The Social Security and Medicare is going to be twice what it's gonna be. Half of what was reported of a 9 40 ones. In other words, if we add up the 9 40 ones, we have two of them now, then the F I T federal income tax will add up to this. The Social Security will be half of what's on the to 9 41 is the first and second quarter. The Medicare will be half what's on the to 90 40 ones for the Medicare. This D, then is thean ploy e portion of of the 41 K It's important because it's showing us the difference between these numbers. And then we have a retirement plan and we have these items here. So note that this, uh, W three isn't really being reduced at all by the fact that we paid for the employees for the insurance, the dental insurance. In this case, it's not. It's not affecting the grills pay here or being reported in the gross pay. The wages up top 65. 280 Payroll Item Setup Vision Insurance Employee Paid Before Taxes: in this presentation, we will set up a payroll item within QuickBooks for insurance. This being insurance related to vision, it's gonna be a payroll item before taxes within. QuickBooks, here we are on the home page. We currently have the open windows open. You can open the open windows, going to the view, drop down and select in the open windows lists. We're not gonna add an inventory. I'm not inventory at a payroll item, which, if we're gonna do by going to the lists, drop down and we're gonna select the payroll item list. Payroll item list. If you're using the free version of the manual version, you may want to go to the interview process, which would be under the employees and go down to the payroll set up. And that might give you more of an interview. Kind of set up if you would just want to test things out in the free manual version were in the paid version here, which gives us that interview process. So we're gonna go to the payroll items drop up, step down here and we're gonna go to new new payroll item. We're gonna use the easy set up and say Next, we're gonna go to the insurance and benefits and say next and within the insurance and benefits, we are going to select the vision. So we did dental last time. We're gonna select the vision. This time I'm gonna select the vision and say Next, we're going to say that the employee pays for it all once again, all employees paid. But this time we're going to say that the payment is deducted before taxes and we're not gonna get into the details of this portion of you know when it would be or not. You could take a look at that, but that if it was deducted before taxes, if we can get it to qualify for that, then it would be a benefit. Because, of course, that would be giving more money into the employees because they would get the benefit and they would be able to reduce taxes by it. So this would be the beneficial options. You could take a look at Section 1 25 for the for being able to qualify. They're here. We're gonna choose this item and look at what the effect will be when we process the payroll with it as compared? Teoh. What we did last time with the dental insurance where we said it was. Payment is deducted after taxes. Payment is deducted after taxes. We have here payment detected before taxes and they would be four. Section 1 25 iris code the tax code. Okay, so let's go to next and see what we have here. We're just gonna call this vision, then, Door. So Sounds like a nice name, actually. And but that's just gonna be a mock a vendor for the revision insurance. We're not going to set up a payment schedule, and we're just going to say next and finish. And that should set up our payroll item for vision. I'm gonna make maximize this so we can see if we can find where they put this. Here it is vision. This one is going to be pre taxed, meaning it's gonna be reducing the pay for federal income taxes. Whereas this one dental was taxable. So these are the two kind of big comparisons were making between these two items, which are much the same similar other than that change. Okay, so now we're gonna go to the employees up top employees center. And we went We're going back to our employ, Anthony. We got, you know, vision and insurance. And Anthony wants it. So we're gonna say, OK, let's set up Anthony with vision. Maybe Anthony's coming us and telling us to set this stuff up, and we're doing it setting it for Anthony up here. And so we're gonna add to this the vision insurance now in the payroll items when the payroll information were in the additions items here additions, deductions and company contributions. And we are going to go down to the vision. There is vision pretax, and we're going to say the vision will say is 25 and we're just making up these numbers, of course. But we're gonna compare the 25 to the 20 for the dental, so that will be that we're going to say Okay, and then we'll run the payroll with that added item and see what the difference is. As we have added that item 66. 282 Process Payroll with Vision Insurance Employee Paid Before Taxes: In this presentation, we will process payroll payroll that will include vision insurance, vision insurance paid before taxes, and we can compare and contrast it to payroll process. Prior to this, which had dental insurance, which was paid for after taxes within QuickBooks Here we are in the home page. We currently have the open windows open. You can open the open windows by going to the view, drop down and select in the open windows list. We're going to be a running payroll once again. Another month has passed. We're gonna run payroll and are One employee now has vision insurance, So we're gonna process the payroll air for the next month. We are in the paid version and therefore have the screen. You can test this out with the manual version as well. The screen will look a bit different. However, if you select the pay employees, then the two screens should be looked somewhat similar at that point. So the pay period should be at the end of main else. We're going to say, 05 31 18 and we're gonna pay it at the beginning of June 060118 So this is gonna be our pay period that we will have more processing for processing this monthly, the pay period being the end of the month of May. We're gonna be paying it the first day in June. Everything else much the same. We're gonna check off our one employee once again Anthony, and see what is included in Anthony's paycheck that have been calculated by QuickBooks. We have the same 1 61 hours, the one hour of OT. That gives us the same calculation for the hourly. And over time we still have the 401 k here, that being something that's going to be paid, this portion of it paid by the employee e taken out of the employee paycheck. And we could see that here because we can see it's the for a one k in item, and it's included on the side, not on the employer side. And then we have the one a one on the employees er side. Okay, and then we have the dental so they dental is listed here, and then again, it's on the employee side. It's being taken out of the employee paycheck, not on the employer and in the vision. The new thing also on the employee side. It's being taken out of the employee paycheck. No difference then from the dental. So far, however, we also see a change in the federal with holdings. And that's because we said that the vision, as opposed to the dental is decreased is going to be non taxable for F i. T. Federal withholding. That's what we mean before and after taxes. So we can see that the federal with holdings now are being calculated. Still, complex calculation. How do we get that? What we have to use the tables and what not, but that the calculation for the tables would be the pay the 4 25 plus the 37 50 minus the +401 k minus. Now thieve Ishan because we said that that's not gonna be included in gross pay for the calculation of of, ah, the federal withholding. So that's the difference between the way we set up the dental and the vision, and you could see it here in the federal with holdings. We can also see it here in the Social Security and Medicare, so these amounts have changed as well So the vision, the insurance, if it's subject and being reduced under this method, meaning it's before taxes, also is going to impact the Social Security and Medicare in a way that the employee portion of the 401 K did not. So if we look at that event and we can kind of see this one cause they're flat taxes. So if I was to take the 4025 plus 2 37.5 that being growth pay times 0.6 to 6.2% the rape currently, you would think you'd be, Ah, 2 51 87 It's not. It's a little bit different. Why? Well, if I take the 4025 plus the 37.5 minus not the 401 K But the $25 we put into insurance minus 2 25 times the rate 250.0 six to then we're going to get the 2 50 33 rounded up to the penny. So note that we are it is affecting the so the Social Security. If we go to the Medicare, we'll see the same effect here. So it might be harder to seek. Is it smaller but 4025 plus the 37.5 times the rate, Which would be a 0.145 Typically, it's a little bit different here, B 58.9 or 91 and that's not it, because again, it's 4025 Plus, the 37.5 amount would give us the 4060 to minus the 25. Now times the rate of 250.145 So we can say OK, yeah, that's the correct amount. So this the Social Security, not only f I t federal income tax is being affected by the $25 that we put into the vision insurance paid before taxes, but also the Social Security Medicare, which is huge not only on the employee side but also on the employer side. The matching is gonna always basically match that the same amounts over here so we could see that has to tie out on this side as well. And then the California information that California withholding and disabilities those will change from state to state. And then we have the 41 K This is what the employer is paying. And so here's our item up here. It's the employer match now, which we said was half of of the of the total 50% match over and above the gross pay. Social Security and Medicare has the employer portion as well. No food A or suited because they've hit the cap long ago. So noticed that we have a long time of not paying any fruit or Suta. Once a new year rolls around this food, 10 Suta will pop up back into place. We're gonna be like what happened there And that's because of that low cap that gets hit in the first quarter. Recall and remember. All right, so we're gonna go ahead and save and close, and then we're gonna continue this in process This payroll, everything looks OK. We'll double check it. It looks OK. We're gonna say continue then and we're gonna create the paycheck. We're gonna check out that pay stub and see what's happening so far with based of by previewing the pay stub, we would have to provide this to the employees at some time. We now have five paychecks because they've been paid each month through May and the check would actually made in June. Here's our payroll information. We have been noticed that the vision is grouped up here with the employee tack with the employee portion of the 401 K because those are gonna be things that are going to be reduced to calculate the F I T. Wages, whereas the dental is down here because it's gonna be after it's gonna be deducted was taken out of the paycheck. But it's not gonna be used to reduce f i t federal income tax wages. And then we've got that for a one K. This is only the employer portion over here. It's it's basically say, Hey, we gave you another 100 or $304. That's not included in your wages at all. It's not included over here it all we gave you that over and above your gross pay. Okay, so we're gonna close this back out. We're gonna close this back out. We're gonna close this back out and let's just check out the bank account. So banking use register. Let's take a look at our register and see if this one has shown up. As we would think it would. So here it is. Here's our paychecks and now we have our fifth paycheck that's paid on Ah, June for for the month ended in May. If we double click on that, here's our paycheck. Here is our detail. Closing this back out. Closing this back out. You'll notice the difference in the net pay here as we've gone through and added, Ah, some of these items, including the dental insurance and for a one K and the vision insurance. Now, next time we're going to take a look at the payroll reports and see the effect on them. What's the effect if we were to run the W two now the W three, now that 9 40 ones now? 67. 284 Payroll Reports After Vision Insurance Employee Paid Before Taxes: in this presentation, and we will take a look at payroll reports after having entered paid role that included vision insurance, where it was paid by employees before taxes, and compare and contrast those payroll reports to payroll reports. Before there was vision insurance but dental insurance similar but which was paid after taxes within QuickBooks. Here we are on the home page. We currently have the open windows open. In order to open the open windows, you go to the view, drop down and select the open windows list. We're gonna go over here to reports first and just view those major financial statements just to keep them in mind by going to the company and financial down toothy balance sheet standard and changing that date range to the end of the year. 12 31 18 says December 31st 2018 checking account just going down into the negative because all we have are the paychecks. We've been running the payroll liabilities we haven't paid, so it's all groups together. All the liabilities are grouped together. We'll get into more detail about that. In later presentations. We're gonna go to the reports and company and financial and the profit and loss. And just view that the major statements here that major items on this statement So that's gonna be 010118 to 12. 31 18 That's gonna be just this item on the profit loss or income statement. QuickBooks grouping together all payroll expenses, including the liability and the girls pay into that one number. Now let's go ahead and run the reports and see what happens as we run the quarterly's 9 41 and the W three. As if we were having stopped at this point after having included this last payroll with the vision insurance. So we're gonna go up top and we're going to go to employees, and we are going to say that we're going to payroll tax forms W to process the payroll tax forms. Now we're in the second quarter now, so we're over here in the payroll tab and the file forms tab were clearly in the second quarter. There's no question about it once again because the pay period ended in May, in which is in the second quarter, and we paid it at the beginning of June, which is in the second quarter, so we don't have that kind of issue of, Well, you know, the pay period was in the second quarter. We paid it afterwards. It's pretty solidly we're in the second quarter now, So we're gonna go ahead and just run the quarterly payrolls by just double clicking on the 9 41 form. We're going to say that the date is gonna be, 06 31 eight. So that's gonna be the end of the second quarter and okay, and it's that will generate are 9 40 ones. I'm just going to say next for this item, check out our numbers on the 9 40 ones. So here we have and we're gonna have three papers or last three papers. The one was because for three paychecks were actually done in the second pay period. So we paid Janu Forever march, which you would think all being the first quarter, except for the march, was paid in April. And then we had April, May, June. Ah, but that June, April in May, May was paid in June. That's still in the second quarter. So basically we have March, April May, which are all basically paid in the third quarter. May, June, May and June eso those They're going to be the three papers we they were paid in May, June and July, on the first of May, June and July. So those are gonna be the three paychecks that we have here. Note that these two items air still going to be different. And that's what we would expect these a bit both being gross pay. And they're different by what we would be expecting, which is the employee portion of the 41 K But note there also different. This amount also is not gross pay. It went down by the amount of vision insurance that we put in place, and so that's gonna be something a bit different here. Note. We have three paychecks. Basically, the growth pay. Each of those paychecks calculated to 4062.53 of them times three would be 1 12,087 50 If we subtract out minus the 12 won 62.5, we're gonna get a $25 difference. And that's because of the cafeteria. I mean, the plan that we set up that is going to be subject the one section 1 25 so noticed that this amount went down. And Social Security Did you go down as well as Medicare because of the that transaction because of the vision insurance, not the dental insurance. So that's what we have here. If we were Teoh, take a look at this item. It's gonna be twice that, or it's gonna include both the employer and employee portion of the three paychecks that make up this amount. So we could double check that with just a flat rate here by taking the gross pay for the three paychecks, meaning the gross pay minus VIP, the employees portion of a 41 K and the 25 vision times this amount will will then give us our total, and that will be equal to the employee and employer, a portion we calculated on our paychecks. So if we some those up, those are all going to be what is due at the end of the time period. Let's take a look at the W three now. So if we close this back out, we were to run the W three in the W twos for the end of the year and make this a large This report here w threes and w table Just double click on that item. We're gonna say for 2000 and 18 and OK, we're gonna say OK, and this problem will run. We're gonna say edit a review at it. That's the one we want and say next and next and next. And once again, we have our information. That's being for the entire years. And now we have a full year's worth of information. And so we had, what, five payrolls? Now that we should have had so 4062.5, which is the gross pay times five would be 20,003. 12. This is at 20,000 to 87. 50. Right? So if we subtract this out from 20,000 to 87 50 we get that $25. So none of these amounts now represent gross pay at all on the W two. Because these air short by what's included in the cafeteria plant, this is short by what's in the cafeteria plan and what is in the 401 K plan we can we can see the difference between these two items here. That's gonna be the 41 K plan. 20,000 to 87.5 minus the 19 4 75.5 is the 1 82 that's going to be what is on the, uh, the employees portion of the 401 K plan. So they're showing us the reconcile ing those items. But we don't have really the reconciliation of what actually got paid because 25 got more, was paid that Ah, by the that the employee put into the vision plan. So that's not included in there and here. Although it was part of compensation and we had the matching portion of the 41 cave that was paid over and above the gross pay. So So just realized that when we look at these w twos the to calculate and think about, what are actual earnings? Are there not as accurate as we? Yes, we might think so. Those are the differences we have here. We still have the retirement plan and we have the SD I for the state and the State information and with holdings down here 68. 286 Payroll Item Setup Health Insurance Employer paid: In this presentation, we will set up a payroll item for health insurance. Health insurance, which will the employee ERP AIDS of a weekend compared and contrasted to vision and dental insurance both being employees paid the way we set this up, one being before taxes, one being after taxes within QuickBooks, Here we are on the home page. We currently have the open windows open noted Open the open windows. You go to the view dropped down and the open windows that list. We will now be setting up another payroll item. We're gonna go to the lists, dropped down to do so, and we're going to go to the payroll items the payroll item list. If you're in the manual version, this is the paid version than in your in the manual version. And you want to practice this, you might want to go to the employees and go to the payroll set up, and that will give you more of an interview process in the paid version as this is. Then we get that interview process kind of here as we add the item. So we're gonna go to the payroll item at the bottom, were going to say that we want a new item and we're going to the easy set up, which is nice and go next in the easy set up. We want to set up another insurance type item we're going to say next, and it's gonna give us a little wizard that's gonna help us to set up the payroll item for insurance. Here is the little wizard that's gonna help us set up a little questionnaire. Wizards Questioner, Wizard. So we're gonna set up, not the vision. We're going to set up the health insurance. So we've done dental, We've done vision, and these are all gonna be similar in nature. So at remember, the next green is gonna give us kind of a differentiation that we've been, ah, plane, Which is, Is the employer paying it or the employee painted? Or is both of them paying? Well, let's look at that. Now we'll go to the next green and we're gonna say OK is if the company paying for it, that's that. That's what we have not yet done or is the employees paying for? That's what we have done. Notice the ones we set up for vision and dental once if you were to click. This isn't what we're doing now, but I'm gonna click it just to demonstrate. Last time if we were to click that we have these two options and we set up one vision after which was payment deduction before taxes. And we set up the dental on this one payment deducted after taxes and then we could have both the employer and and company. I'm not gonna do that one here because we're gonna basically choose this one for the contrast. So now we're going to say that the company pays the entire thing. So the health insurance the company pays, And then we had the dental insurance down here, which was, ah, paid by the employee after taxes. And then we have the vision which was paid by the employee, he buffalo or taxes. And now we're gonna be here. Company pays for the entire thing with the health insurance. So we're going to say OK next And we're gonna just call this health insurance vendor. This is who we would have to pay. Ah, once we collect the insurance or we're gonna pay the whole thing as the employer now. So we would have to pay these people. That's who we pay as the vendor. Next. And they were gonna say, finished. Once that is set up, we should go to our items list and have a new item. So we're back in our items list now. We should have a new item as we do down here. I'm gonna make this a little bit larger. So we have the health insurance, and the difference here is that it's company paid, as opposed to the dental insurance up top, which is a deduction because it's it's going to be paid by the employee taxable and the vision which we set up, which was introduction because it's paid by the employee and its pretax. So now we have the health insurance, which is being completely paid by the employer, which is nice. So what we're gonna do that is set this up with our one employee. So we're gonna go to our employees center and we're gonna go to our and Anthony again. We're gonna say, Hey, Anthony, we got another benefit. Another month, another benefit, and we're gonna go down to the payroll information and Anthony says, Great. This time you're paying for it, so I can't refuse that one. That's even better in the dental and vision that we set up last time here. Now we're gonna set up the health insurance. So health insurance paid by the company there we have that. We're going to say that that is out. Say, $110. We're just making that number up, but it's coming by the cover $210 and that will be that notice. It's not coming out of of the paycheck. What we're gonna do now is then process. The payroll will be able to compare and contrast. What's the difference when we add this health insurance compared to the payroll rebrand last time which didn't have health insurance but did have the vision and dental? So we're gonna say OK, and then we'll do that next time 69. 288 Process Payroll With Health Insurance Employer paid: In this presentation, we will process payroll that will include health insurance, which is paid by the employer. And then we will compare and contrast the payroll process here with prior payrolls. Before we had health insurance but did have insurance related to dental and insurance related to vision that was paid by the employee E both before tax and one after tax were then, QuickBooks, here we are in the home page. We've got the open windows open. You can open the open windows that I go into the view dropped down and selecting the open windows list. We're gonna be here and run payroll ones again. Another month has passed another paid role to process, and this time we have the health insurance. We will do so by selecting pay. Employees were in the pay payroll. So we have this screen. We're in the third tab or in the first tab here. If you're using the manual payroll, then the next screen should look much the same. This is the paid version. We're gonna go into the pay employees section here and run the next payroll. The next page will will be Iran. As of the pay period in gets. We're doing this every month. Ah, June 30th 2018. We're gonna process the paycheck that next day. 07 a 118 So that's gonna be our This is just we're going month, month at a time. This is the pay period in for the month ended 06 30 and paid on July 71 2018. The year we are running on, we're gonna check off Anthony once again, our one employee, we're going to select Anthony here so we can see what is going on with Anthony. We see that Thea, the amounts up top will remain the same and that the gross pay is going to be the same because we have the same amount of hours and the same amount of overtime. We got the 41 k here. So this is an item on this side. It's being deducted from the check, because is it the employee portion? The employer portion we see is on this side because it's gonna be paid over and above the gross pay that dental insurance, which was taxable we had here. It was taken out of the Czech not, however, reducing the check for the calculation of the federal with holdings. The vision we saw that it did come out of the check here. And the difference between these two taxable and untaxed bull that's being paid by the employee E is that this vision reduced both or all the federal withholding amount, the Social Security and the Medicare. So these these taxes were affected by this vision because we set it up as pretax and paid by the employee E. What we have now, of course, is the insurance that's going to be paid by the employer. I'm gonna scroll down a bit. That's the 110 on this side notice we don't see that 110 over here at all. Where we see it is on the side. We see it over here as company paying it. So in other words, that company is paying this over and above. The gross pay that's going to be reported meaning the girls pay on this side is still just these two amounts. The employer is really paying the employees more than that. It's pain. They're paying the employer another 110 by paying their health insurance. So the 110 is going, but it's not gonna be included on the W two. It's not included over here at all. It's included as if it's similar to the to the employer portion of the Social Security and Medicare. So we're paying over and above what's gonna be reported on the W twos, so that's gonna be the difference. So if it if it was employees uh made, then it would be listed in the other items and then beyond this side where we would have the like, we have the 41 K and the dental it in the vision taxable versus untaxed full. This 25 being pretax means that although it's reported over here and take it out of the Czech, it's also gonna be reducing the amount of taxes that are gonna have to be paid in this case , both for all three federal soul security and Medicare, as opposed to the 401 k which is only reducing the federal withholding, not Social Security and Medicare. This amount over here is in terms of the health insurance isn't gonna be included in the growth pay at all, and therefore no taxes will be paid on it. However, it's a little deceiving when we see it because it won't be included in the W two lines or it won't be included in the gross pay line. So let's process then this and see what the pay stub will look like. For this. We know that that the matching side is still over here for the 41 K We've got the health insurance for the company. Now, on this ad Social Security and Medicare, which are gonna be matched, those will always basically be the same unless something strange is coming on normally will be the same. And then we've got the federal and Food A and Suta, which are zero because the caps have been reached so well say save and close and we're gonna go ahead. Looks, everything looks proper. So we're gonna say, OK, let's process this. We're gonna continue, and then we'll create the paychecks. So I'm gonna create the paychecks and then take a look at the paste up and we'll preview This is what we would have to give to the employee. This is the current paycheck that we have here, and this is the year to date numbers that we have. And if we go through this, we can see now that the amounts that are gonna basically being reduced for the taxes are gonna be the 41 K employees and the vision, these are gonna be reducing taxes for the taxes for the F I T tax and then the dental down here. Ah, the dental insurance is not gonna be reducing taxes because of that difference we made. And in the health insurance now is being grouped on this side. It's being grouped on this side because being paid by the employer. So this side is basically saying, Hey, these are the amounts that are being paid over and above what's being reported as girls pay . They're not really in gross pay at all. Even though the employee is receiving them, they're getting them. This is being received by employees over and above. Because remember, the girls pay is really there to help report taxes. So these air good huge benefits to them because, of course, they're benefiting them and not being included in girls pay and therefore not be included with the tax calculations. So we'll close this out now, we're gonna close this how we're gonna close this out. We'll go ahead and check our checking account in the register, going to the banking, drop down and use register. Gonna go to the checking account here. We're going to just check and there is our check. We can see the difference is in the pay big that the payday. It knows there's no difference between these two because, of course, it was paid by the employer and it didn't affect any of the other taxes because it wasn't in gross pay or and therefore not in any calculation for the taxes. If we double click on this item, then we'll get to our paycheck and we double click here. We get to our back to our payroll information. Next time we're gonna run the reports and we'll take a look at the nine forties that w twos and, um, see what the difference are in the 9 41 and the W to see if there's any differences from the prior to pay check. If we were to run them as of now, 70. 290 Payroll Reports With Health Insurance Employer paid: In this presentation, we will run payroll reports after having process payroll, which includes health insurance, which is paid by the employer. Comparing and contrasting that to prior peak periods, which did not have the in health insurance paid by employer, but did have dental and vision. One being before tax. One being after tax within QuickBooks Here we are on the home page. We currently have the open windows open to view the open windows, go to the view tab and select the open windows list. Let's look at our two main reports. Just overview them. We're going to go to the reports, drop down company and financial, and first take a look at that balance sheet within the balance sheet. We still are looking at 12 31 18 year end That's December 31st noticed. The checking account is still going down because all we're doing of processing payroll liabilities air still going up because the payroll liabilities are there. Both employer and employee portion haven't been paying them, grouping them all into one liability account, as is the default with QuickBooks within. Go to go to the profit and loss reports drop down. We're gonna go to company and financial profit and loss. I am going to go to a 10118 to 12 12 31 18 says January through December 2018. Just to show that all of the expense then as well as Theo expenses for the gross pay and the payroll taxes are included in this one number, We'll get into more detail on that later. Just one overview. The main financial statement reports. Now we're gonna go to the reports that would be processed the 9 40 ones and the W three and W two and see what they would look like if we were to run them. At this point in time to do that, we're gonna go to the employees dropped down. We're going to scroll down to the payroll tax forms. We want a process payroll of forms. We're gonna process the payroll forms, and we are here in the employee center again. We're in the file forms. We're gonna take a look at the 9 40 ones. 1st 1 and then the W two and w three. I'm just gonna double click on the 9 41 to do so and then we're gonna need the dates here. And at this point, it could be a little confusing. So just keep this in mind here because And we did this on purpose basically to print the paycheck one day after, instead of keeping it in the same paper because we want a note that most of time it will be a little bit more complex. Meaning we have monthly payroll. So you think January February March would be in the first quarter? April, May June would be in the second quarter. July, August, September. However, we're paying it in the next day of the next month. So in this case, we want to We want to be mindful of the fact that the payroll process is going to be on a cash basis when reporting it to the ire s so in this case, then we're gonna have to go into the third quarter end to pick up the last payroll that we just put into place. Why? Because we process it for the month of June, which ends on June 30th. So you think I'm not cruel on an accrual method? It should be in the second quarter, but we didn't pay it to the first day. And even though we have just paid it, no one even worked in that month. We're still gonna end up processing the payroll based on that cash basis method. So we're actually in the third quarter. We're gonna process now. So, Jenny, February, March, April, May, June, July, August, September. So I'm gonna say, 09 31 8 is gonna be the month we need, and that's for the three. The three months ended then, So we're gonna say OK, and process this report and we should just get our one payroll at that time. I'm going to say next on this report, and here we are. So here's our information. So now we have the wages up top, so that's going to be the 8 3034 That's gonna be the F I T. Wages as compared to the Social Security and Medicare wages. Now there's only one paycheck remember? Included here because we had one employee and the one paycheck which just barely made it in see the third quarter, even though all the work was done in the second quarter, and we know that we pay that individual gross pay for, 0 16.5 that being the overtime and the and the regular pay. If we subtract that from this number the Social Security wages minus the 4037.5, that gives us a $25 difference. That recall is the vision difference, because the vision was something that we're going to reduce the wage amount here for the calculation of both Social Security and Medicare. So that's gonna be our difference there. The dental didn't didn't do that because we said it wasn't going to be reducing the taxes. This number over here is different by both that $25 amount and the 401 K that was put into place, but only the employee portion. So again, if we took the growth of four or 62.5, minus the 41 K which was 203.13 minus the 25 for the vision, that's going to give us the 3834 37 about. And that difference was a little bit higher because I put 13 cents on the 401 K and was actually even in the data we input. So anyways, that's gonna be the difference there. So we can see this difference between these two numbers is gonna be the 41 K employees portion. But this number is actually down below the grills paid by the vision as well. What we've added to hear the last paycheck was the employer paid for the health insurance and that's not included in any of these numbers. So both of these numbers are kind of short by now. The employee portion of, ah insurance that was for the employees er portion of the insurance of with paid is not included in here. These numbers air both low by the fact that the employer paid over and above this gross pay insurance and the employer portion of the, um for a one K plan the matching portion. So if we were to look at that one check then and add up the cell security and Medicare for the employer and employee portion, we would get to these items which we could recalculate based on this number on and this being double the employees rate and this being doubled employees rate or the employee employer rate added together and this being the some of those and that's going to give us the third quarter. Now where we are at as of now for the third quarter 9 40 ones. Let's take a look at the W two. And when it closes back out and we're gonna go back to our reports and look at the W two now and see what that would be at this point of time at being 2018. Okay, okay. And which is going Teoh Review and edit. Gonna go next, next, next. And then here's what we have. So this would be for the entire year now and remember, all our our payroll is basically standardized, so our payroll should be 4062.5 times. Now we have had six checks, so it would be 24 3 75 It's different than any of these numbers here are largest number is this one. So it's a minus 243 to 5 is gonna be different by $50. And that's because we paid the vision now two times for two paychecks. As of this point in time, we've had to pay checks that ran 25 each for the vision. The dental isn't decreasing these at all, because because the difference in four tax before and after attacks that we put and then this item then is going to be different than these to buy the 41 k So we've got the 24 3 25 minus 2 23 310 is reported here so noticed that the W three is reporting the difference. It's reconcile in these items that are on this report on the W two, but it's not giving us really the gross pay, because these none of these numbers are including what the employer paid over and above. That's not included in gross pay at all, which includes, at this point the health insurance that was paid by the employer and the 401 K employer portion now and so that's gonna be these Adams. The federal income tax is going to be if we added up all the paychecks that would be reported here. Also, if we added up, of course, the 9 40 ones for the 3/4 now for the for F I t weaken, match out this number Samos, self security and Medicare, we can we can match out the federal income tax for the 3/4 and all the paychecks and then the Social Security and Medicare. Remember, this is only the employee portion. So if we added if we added up the employee portion of all paychecks, it would tie out if we doubled these items and added up the 3/4 we have so far of the 9 40 ones than the should try out. Okay, And then here's the we have the retirement plan still, and this is gonna be the amount for the employees portion that difference between these two numbers the state taxes here S D I, which will change from state to state and the state income taxes being withheld. 71. 292 Payroll Item Setup Group Life Insurance: in this presentation, we will set up a payroll item related Teoh Group Life Insurance within QuickBooks, Here we are on the home page. We've got the open windows open. You can open the open windows by going to the view, drop down and select in the open windows list. We're not gonna add an inventory item or a payroll item. I should say payroll item by selecting the lists dropped down and we're gonna go down to the payroll item list. If you're working in the manual version, that free version, you may want to go through the set up once a time once again in the employees set up and the payroll set up, which will give you more of an interview process. This is the paid version and will give us an interview process. As we set up the item, we're gonna go to the payroll item down here. We're gonna go to new add a new item. We're going to say that we want the easy set up for the new item. And next, we're going to set up an insurance benefit item once again, and we're going to say next and it's gonna give us a little wizard, a little walk through wizard to fill out for this item. Here's our walk through Wizard for our benefits. We're gonna choose this item now and see what the difference will be. If we run payroll with it, it's gonna be a group term life insurance. If we click, this little explanation will get an explanation. You probably, of course, want to do some more research on it. One place to go. We'll be, of course, the iris website thes often being situations where we're looking to get a tax benefit here in order to compensate our employees as much as possible by reducing taxes. So the I. R C. Section 79 provides an exclusion for the 1st 50,000 of group life insurance coverage provided under a policy carried directly or indirectly by an employer. There are no tax consequences if the total amount of such policies does not exceed 50,000. Amounts of coverage in excess of 50,000 must be included in income using IR as premium table and are subject to Social Security and Medicare taxes. A taxable French bench benefit arises if coverage exceeds 50,000 and the policy is considered carried directly or indirectly by the employer. A policy is considered carry directly or indirectly by the employer. If one the employer pays any costs of the life insurance or the premiums paid by by at least one employee e subsidized those paid by another employee. So then, of course, you could go to the IRS website to research whether you qualify for this item. So we're going to choose that one say, next and we're gonna just call it. Let's just call it a group. Life Insurance is gonna abbreviate, then door. This is gonna be the vin door who we would pay as we collect the group Life insurance we're going to say next and finished. And that should set up a new item within our payroll items were gonna maximize the screen and see if we can take a look at that new item. Here we have it. It's the group term life insurance. We can see it's a company contribution here, So let's see. What we're gonna do now has add that to our employees will run the payroll with it, and we'll see what happens to it. We could see a trend now we should think it would match a similar action That would happen to the 41 Kate matching not the 41 K that we the employee contributes but the employer and then the health insurance that we set up as paid by the company. You would think it would have a similar characteristic to those. Let's run it, Let's see, we're gonna go to our employees up top and go to the employee center, and we're gonna go to our one employee Anthony once again and say, Hey, we got a group life insurance benefit now on Anthony's all willing to take that on. So we're gonna add the group Life Insurance were in the payroll information now, and we're going to say that we now have the group. Life insurance will choose that item, and we're going to say that the group Life Insurance Anthony's gonna put in 75. We'll just say, Well, let's say let's make it a little bit larger will say 200 here. So group life insurance, we're going to say 200. We're gonna go ahead and save this by saying OK, and in the next presentation will run the payroll and see what the effect is comparing and contrasting the new item that we have set up 72. 294 Process Payroll With Group Life Insurance: In this presentation, we will process payroll, which will include group life insurance and compare and contrast this payroll to the prior payrolls which did not have the group life insurance. We will do this within QuickBooks. Here we are on the home page. We currently have the open windows open. In order to open the open windows, you go to the view, drop down and select the open windows list. We're gonna say that another month has passed. I'm gonna run payroll once again, this time the payroll with that new item, that group life insurance. And therefore, we're down here in the employee section. We're gonna pay our employees, pay the employees. We are in the paid payroll version. Therefore, you see they paid payroll version screen. If you're testing this out with a manual free version, then the next train will looks much the same as we in the paid version. Select this pay employees icon here. Then we're gonna enter the data into our screen. We are on the month end of July, so 07 31 in 2018. We're gonna be painted in the first day in August. That's just gonna be our convention that we have here. We're running the payroll every month and we are paying its on the next day, so that should be 2018. And so we're just on July. This was gonna be run for the month of July. We're gonna pay it on August. Note that time indifference were pointing out that time indifference in this, these presentations as we run the payroll and that quarterly payrolls it will be on a cash basis when we enter the data into the quarterly payrolls, not on an accrual basis, as we do sell. So that on accrual basis were running this for the month here of July and it's going into August will be the month that it's going to be processed within the payroll report. We're gonna go ahead and check off our one employee. Everything else is much the same as prior presentations. So we're gonna say, Anthony, more click on what we have. We have the same number of hours the same over time, all the same information here, that new thing that we have added Now if we scroll down to this side, we've got the new group life insurance. That's what we've added this time. So where is that? Over here, we can see that it's gonna be included on this side. Meaning it's the employer portion, not the employee portion, because our new item is over here being paid by the employer. It's not included in gross pay, and therefore it's not affecting the gross pay. However, there is still in effect on the taxes, and it's not gonna be on the federal income tax. It's not gonna be included in federal income tax, but there is, in effect, on Social Security and Medicare. That's gonna be the unusual thing. Usually, these types of these taxes are gonna be by default, calculated based on gross pay. The with the federal income taxes is reduced by a few things we've seen, including the 41 K that wasn't included there. Now these ones are not this particular item. The group Life Insurance is not included in girls pay at all, but still has to be taken into consideration when considering the Social Security and Medicare. So let's take a look at that. We're going to say that we had the 4025 plus the 37.5 That's the gross pay. And then, in a prior presentation, we said we had this pre tax amount, which which was reducing the growth pay for the substituting Medicare. So minus 25 and then what we have here, we have to add back to it. This 200. So the 200 then for Regan, is with regards to Social Security and Medicare is going to be taxable. So it's not up in this number because this is really the number that's kind of used for federal income tax primarily, says not included in that Girl's Day. But it's gonna be increased because these secondary taxes needed in the calculation that calculated. So we're gonna add back the 200 and then multiply times the rate of 0.62 and that's going to give us this to 60 to 73. Similar type of calculation could be made for the Medicare. So this is a This is a strange one here in terms of the tax effect that's gonna happen on the group. Life insurance not included in the girls pay at all these numbers really are the F i T federal income tax. Gross pay for the most part here. And then they're showing you what's gonna be reduced from federal income tax in this withholding in these amounts that are gonna be reducing the federal income tax, including the 401 K This item over here, this 200 not included, because it's not gonna be taxable for growth pay. So it's not included in this amount at all. It's paid by the employee error, but it is something that's going to be taxable for Social Security and Medicare. So we have to add it back in for that type of taxation. So we're getting kind of a long list of benefits here. We could see that the gross pay we got the 41 k for the employees. The dental insurance taxable of the vision, which was pretax then through the federal with Holdings, is going to be standard for. And then the Social Security Medicare were in the state of California. The California taxes and then the employer is paying over and above the gross pay. This is all included in gross pay, the 41 K that's being matched, the health insurance, the group life insurance now and the Social Security and Medicare, which is gonna match same type of calculation for this side of the Social Security and Medicare. And then there's no food or suit because we've hit the cap. So we're gonna go ahead and say, Even close this. We're gonna process this. We're gonna continue and process The payroll dates look good. Everything looks good. We're going to say, create the paycheck. So once the paycheck is created, we'll take a look and print the pay stub. And let's preview the pay stub. So here's the current data we have and we can see that the new item, the Group Life Insurance, is over here. It's included as taxable company item so taxable for the company not included in the girls pay it. Also, this another item over here where we have the gross pay. We've got the 41 K and the vision insurance which are decreasing gross pay for either or both the F I T federal income tax for the employees and or the Social Security, which are why these items are up top. And then we've got the taxes that are gonna be pulled out for the employee taxes and then we have the dental down here, which is pulled out of the check but not reducing the employees taxes in any way. It's just something that we're pain possibly getting a group benefit from. And then we have these Adam here, which are basically over and above, were saying, Hey, the company's paying these for you, and they're not being included in gross pay at all and therefore not being included in taxes either. So these air really kind of increases to salary in a way that aren't actually in the salary number because that's one wayto do not have to pay the tax were really reporting this basically for payroll taxes. Okay, so we're gonna close this back out. We're gonna close this back out, closed this back out, take a look at the check register, going to the banking, drop down and use register checking accounts, what we want. And we see the next check that we have here for 81 The next item so we could see the actual dollar amount is less than the prior paycheck. The only difference being that life insurance, which was actually a benefit, is a $200 increase to the benefit that will be paid by the employer not included in gross pay. But it didn't clear that that the taxes increased on Social Security and Medicare, so there was actually a $200 increase, but it wasn't included in gross pain. It's obviously not reflected in the paycheck, which resulted in increases in taxes not to federal income tax, but to the Social Security and Medicare tax. If we were to open this up, we can compare those two by going to the paycheck detail and check it out. What exactly is making up that net check? 73. 296 Payroll Reports With Group Life Insurance: in this presentation, we will take a look at PayPal reports after having run payroll with a new payroll item related Teoh Group Life insurance and compare and contrast that change in reports to reports we saw in the past before having added the new item of group life insurance within QuickBooks. Here we are on the home page. We currently have the open windows open. In order to open the open windows, you go to the view, drop down and select the open windows list. We're gonna go to the reports up top and start off with the balance sheet and income statement. Just the overview, our main two reports. And then we'll go into the 9 40 ones and W two and W three reports company and financial. We're gonna go down to the balance sheet. We're gonna change the day to 12. 31 to 1 or 18 and that's gonna give us no. All we have of the paychecks here. So here are our paychecks and the payroll liabilities, which we haven't paid yet. The group in all the liabilities together. That's the default for QuickBooks. We're gonna take a quick look at the profit and loss by going to the reports drop down Company of financial profit and loss report. Changing the dates from a 10118 to 12 31 18 and we could see that it's grouping everything into once again the payroll expense. Even with the new items, were adding here. This including the growth pay and the payroll taxes for the employer, will talk more about that and how to act. Grouping works at a later presentation. Now we're gonna run the payroll reports as if this is the payroll end. As of now, we'll look at the quarterly's to 9 41 and see what the W three and W two would look like if we were to run it. At this point in time, we're gonna go to the employees dropped down. We're gonna go to the payroll tax forms deputy twos and process the payroll forms, and we're gonna take take a look first at the form 9 41 So we're gonna go to the 9 41 Just double click on that item. This is the paid version. Of course, you can't really process the forms in the manual version, but you can look at the reports for them. We are currently looking at the third quarter now for the 9 41 sits solidly in the third quarter because we have the month of July and we paid it in August and both of those months are in the third quarter. So even if we're thinking about a cruel or cash basis, the reports will be on a cash basis. But in either either case, we would be solidly in the third quarter here. Third quarter ends in September. So General February barge, first quarter, April, May, June, July, August, September. So when the third quarter here at 9 30 2018 we're gonna go ahead and say, OK, run. That report's gonna say next year and next Here's what we have. Let's think through these numbers now. What's gonna be included here? It looks like it's gonna be two paychecks, and that would make sense because you would think on the cruel method, we would only have one, because it would be for the month of July that we have in here. However, the month of June, remember what paid in the first day of July and the month of July payroll was paid in August said, Really, the pay period or the paid dates were two of them. We had one pay date. The check went out in July and August. So just keep in mind when we group this together, we gotta deal with that kind of timing difference. With regard to win, we're going to be grouping the information together on a cash basis for the 9 40 ones. Now, if we look at the pay, then we're going to say that there were two paychecks from one employee. We know that they're gross. Pay was the same. So it's was 40 62.5 times, too. So you would think that we would have one of these numbers here here, that's all. These three is supposed to represent that gross pay for two pay periods to be the 1 8025 They're not here because we've added some complications that closes ones or Social Security and Medicare. And you'll recall that some of the differences that we had now is we said that the 200 that we just put in a place with one of the two paychecks is actually going to increase the number here for the Social Security Medicare. So to get to these two numbers, we'd have to add that 200 related Teoh the the group life insurance that we had. And prior to that, we had a $25 item that was going for insurance. I can't remember if it was dental or vision, but one of the insurance items was delete what's gonna be reducing these two items? And that happened for both paychecks. So both pitch X minus 25 for one of them, minus 25 for the other. That's how we get to our 8000 to 75. So here's our 8000 to 75. That's what we're going to use for Social Security and Medicare to double check our tax by most plant times of the 1.25 to get to the both social, the employer and employee portion. So this will match what's on the paycheck step if we add up the employer and employee portion and we can double check it by getting to the Social Security wages in this way, which is getting a bit more complex if we compare that to the F I t wages. So if I take this number minus the 7869 we get the, uh 406 There were two paychecks. So if we divide that by two, then we're gonna say that. What is that? That's the 203 for the 401 K So the difference between these two are usually pretty easy to reckon reconcile because it's gonna be the for a one K. And the changes to this number could be a little bit more confusing because they're not included in the Cross Bay, really at all. So that's how we would get this number. This number is gonna be directly from whatever's on the paycheck stubs, because whatever the computer calculated is what it is. We can't re calculate it cause it's too complicated. If we had multiple employees, especially, and then these we can recalculate. So we're gonna have to do that and actually come up with the Social Security wages. And it's nice at this point with all the different items we have here for the computer to help us do that. If we do so, then it'll add up to our two paychecks that we had and that'll give us our payroll liability. We haven't paid it to yet, so that's where we are at this time. So I'm gonna close this back out and let's see what would happen if we ran the W two and W three at this time. So we're gonna scroll down just a little bit, get a double click on the W two and w three and see what we have there. It's gonna be for 2017. We want 2018. So 2018 and okay, okay. And we'll let it process this and review and edit. And next, Next, next. Okay, so now this is gonna be for the entire year. So if we added up the 9 40 ones for the 3/4 we have so far, this never should tie out to what was on the F I. T. Wages for the three 9 40 ones. And then the Social Security and Medicare here are gonna be noticed. Their larger They're the Social Security and Medicare. These number minus this number will be showing here in the difference by boxes box 12. So if we subtract this out, if we take the 28 5 62.5 minus 2 27 3 44.5 That's going to give us the difference of 1000 to 18 which is that's gonna be the 401 K that we've been putting into reconcile in between this number and thick grows. Pay is getting a little bit more confusing as we add some of these items here. So let's take a look at it in Excel. If we were to just have a quick calculation, this is the the amount that we paid per period. So we paid this much per period. There's been seven periods so far, so the wage should be the 28 4 37 50 Ah, that we would have at this time. Now we've added the life insurance of 200. But that only happened for the last paycheck. One paycheck. That's 200. And then we had the vision which was going to be reduced, and that happened for three paychecks. Now, in our in our calculations so far. So that's 75. So this amount of girls pay times seven would be the gross pay if we didn't have these other items in the life insurance in the vision the life insurance is going to be added for Social Security and Medicare. It only happened for one paycheck so far, which is 200. The vision happened for three paychecks, which is thes 75. So this is where we would think we would be at. Plus, we're going to say the insurance is added to it minus the vision here, and that will give us the 28 5 60 to 50. So that's gonna be the 28 5 60 to 50. So obviously, as we add some of these atoms, the payroll gets that more complex. Here we have D that's going to give us the reconciliation between these two and then sees going to give us that life insurance, which is affecting the Social Security and Medicare here. The retirement plan, of course, is still checked off the SD I for the California and the California and State taxes down below 74. 298 Payroll Item Setup Health Savings Account: in this presentation, we're gonna set up a payroll item related to a health savings account within QuickBooks. Here we are on the home page. We've got the open windows open. In order to open the open windows, you go to the view, drop down and select the open windows list. We're gonna add a payroll item by go into the lists, drop down and go into the payroll item list. If you're working in the manual version, you're testing that out in the manual virgin. You may want to go to the free version employees and set up payroll, which will give you that interview process we are in. The paid version will get a bit of an interview process here. As we add the apparel item will do so by going to the payroll item drop upto have the bottom and adding new. And we're going to say the easy set up is the one we want. We are once again going to go into the insurance benefits, health insurance, dental and so on and so forth. And next. And we will then add once the wizard shows up for us the health savings account. So here it is here's there helping wizard. We want the health savings account. You can read up on it here. Obviously you want to do some research and I wanted to make sure that it's a something that will be appropriate. We're gonna test what it does after, actually, as we choose it within the QuickBooks system. But here you can see the little explanation. Set up a company contribution or employees deductions for contributions to a health savings account. Often saw as an H S A and H essays, a special kind of magic medical expense savings account Created by the federal Medical Prescription Drug Improvement and Modernization Act of 2013. It allows an individual who is covered by a high deductible health insurance plan to put aside money for medical expenses. More information about the H S aides. Consult your tax advisor or benefit professional so you can do more research on that. We're gonna choose this item here and say next. We have similar options here, as we would with some of the health insurance options. After the company pays the employee pays or both pay some portion of it and the payment is either deductible after taxes or payment is deductible before taxes. And you could take a look at the code once again. Get some help with this section. 1 25 You can do some research on it. We're gonna go ahead and keep it at the company pays for all of it, and payment is deducted after taxes rather than before taxes. We're going to say next and run through the rest of it. We're going to say that this is gonna be the H as a vendor, so that's just gonna be a random vendor to set this up. That's who we would actually pay. Once we are going to actually pay the vendor for this and next and finished in, we'll let it set this item up. Here's the new item on the item list. You can see it's gonna be a company contribution. So it's lined up with the other company contributions, and we should see and expect similar characteristics, as with the other company type contributions that we have, including the matching 41 K the group life insurance and the health insurance. So let's go ahead and add this to our one employee. So we're gonna go up to the employee center up top employees center. Go to our one employee E. Anthony, and say, Hey, we got another bet. Another month, another benefit. And this is going to be the health savings account. Anthony is, of course, uh, willing to try that one out. Stride everything else out here. So we're going to go ahead and add the health savings account so we'll slay. They dropped down the H s. A. It's gonna be aware that you can't really see it, but it's at the bottom. It's the H s, a company here. That's gonna be the item that we are adding. And we're going to say that that one we're going to say is 150 so we'll give that at 150 that's it. Okay, so we've added that item. Now we're gonna next time we're gonna run the payroll, see what happens with this new item in payroll compared and contrasted to the prior payroll where we didn't have the health savings account 75. 300 Process Payroll With Health Savings Account Employer Contributed: In this presentation, we will process payroll paid role that now includes a health savings account which is contributed by the employer so that we can compare and contrast the difference between this payroll and the prior payroll, which did not have a health savings account within QuickBooks. And we are in the home page. We currently have the open windows open. You can open the open windows by going to the view dropped down and the open windows list. We're gonna say that another month, half past, and we're gonna process the payroll of once again. We're gonna go down here to the employee section and pay employees. We are in the paid version. This is the paid version that looks like this in terms of the payroll. Through testing this out on the free version or manual version, it will look that similar after we select the pay Employees icon here. Most like the Pay Employees icon. We're gonna say that the date will be the end of August and we're gonna pay it. Then in September, which will be 090118 said, remember, we have that timing difference we're paying each month here and and, well, the pay period is going to be for each month, and they were gonna pay in the first day of the next month. And then we're gonna check off our one employee once again and see what we have for Anthony of this time. We've got the same pay for this month's of the growth pay will remain the same. The thing that we have included. Now it's the H s A, which is contributed by the company. If we scroll back down here, we're going to say that the H S a then is going to be included on the side. There's the 1 50 That means it's going to be paid by the employer over and above, not included in the gross pay, although it's not included in the girls pay, it is included in the tax calculations, and that's because we chose it to be taxable here. So just be aware of that. If it's gonna be taxable, whether or not it's in the gross pay, the H S. A would then be in the calculation. If it qualifies for the cafeteria plan or not taxable, then it wouldn't be included in some of the tax calculation. So in other words, we could see that although that gross pay didn't change here we have the federal income tax went up. That's according to the table. But we can see that it went up because the gross pay we used to look up on the table had changed. And then the Social Security and Medicare. We can kind of look at those numbers and say, Okay, what's going on with those now? And we knew that if we look at our amounts here, we're gonna have the P, which is 34025 plus the 37.5. This would be the gross pay. And if we go through these items on on the right, we're going to say that's going to go up by the 200 which is the growth pay for the life insurance, which is going to be included for Social Security and Medicare. And then it's gonna go up by the 150 which is included over here, and that's gonna be taxable. And then what's not taxable? Is this 25 on this side? So minus 25 that gives us this 3 4087 50 which we can then use to calculate the Social Security at the rate of 6.2. So times 0.62 and that will give us the t 72 0.2 So you could see it's getting a bit more complicated as we add some of these items to figure out in the Social Security, the Medicare taxes rather than just being able to take the girls pay here. And so that's gonna be our items. This is the new item that we have. And this is gonna be the gross pay minus all the exemptions. Here's our net check. We're gonna go ahead and say, save and close. We're gonna process this. Check the dates. Look. Okay, so we're gonna say that looks okay and continue and create the paycheck. Look at the pay stub and preview that pay stub and then we could see in the paste up. We have the current information. That's gonna be our gross pay. The growth pay hasn't changed here. Our new item is over on this side, so it's gonna be the taxable company items. So there's the 150. It's taxable. Meaning it's going to be, although not in the gross pay. It's going to be included in some of the tax calculations, as was the life insurance. When we go down to the 41 K matching and the insurance, we noted that those are gonna be non taxable items that were paid by the company will then close this out. We're gonna close this out. We're gonna close this out. We're gonna open up our checking accounts, going to the register by going to the banking, drop down and use register. Then we'll go to our checking account and just take a look at that last check here. So here's the last check again. Gross pay didn't change the company. Put that in. It didn't. It wasn't included in gross pay, but it was taxable. And so we had changes in the taxes include F I T Social Security and Medicare. Which is why these two checks differ in amounts of the double click on this item. Then you get the paycheck information here 76. 302 Payroll Forms Health Savings Account Employer Contributed: in this presentation, we will take a look at payroll forms after running payroll, which has a health savings account which was contributed by the employer, Herb. We will compare and contrast it to forms prior to having a health savings account within QuickBooks, Here we are on the home page. We currently have the open windows open and ordered open the open windows. You go to the view, drop down and select the open windows list. We're gonna go to the reports here and just start to run the reports for the 9 41 and the W two and W three as if it was year end at this time and see what the difference is. As we added the new health insurance savings account, we'll go to the employees dropped down, up top. We're gonna go to the payroll tax forms. The deputy would we want to process the payroll tax forms. Once we do, this will be in the employee center. This is in the paid version here, and we're in the forms Tab. We're gonna double click on the 9 41 and see what we would have if we were to process it. It at this time, We're going to be in the third quarter, which is gonna end in September and run that report. I'm going to say next here and get down to the numbers were on. We're in the third quarter for the 9 40 ones. Note that we have three checks here in the third quarter. And now we ran the last one for the pay period of August, but it was actually processed in September. So what we have is when the paychecks happened, three paychecks actually went out. Although on a cruel system, we haven't had the three months that were worked in this quarter. But we have had three paychecks that were issued in this quarter. So we issued the paychecks for the months of June end. Paycheck went out in July July end. The paychecks went out with in August August end. The paycheck went out in September. So we do have the three months that air here. Just keep in mind that difference in terms of the cash basis reporting for the payroll versus a cruel reporting, we learned to report on the financial statements. So we have our same difference here between the social security wages and the F i T wages. If we take the difference between those two numbers were going to say All right, that's the 12662.5 minus 2 12 53.5 That's 609 There's three paychecks divided by three paychecks. So that's the 203 for three paychecks that we put into them for a one K. So that's the 401 K employees. So that difference makes sense now, in order to get this number here, then we'd have to ah, bit of a reconciliation, because this is going to include some of those employer taxable and nontaxable items. So if we were to think about that, we'd have to say, OK, well, we actually paid for three paychecks the 4060 to 50 times three paychecks, and this would be the total wages we would think. And then we had the life insurance at 200 times two. That's gonna be the 400 the vision 25 times three paychecks because there's two page X here because we entered it in the last papers. There's two paychecks that had this 200 life insurance. Then there's 25 at three paychecks that had those. All three paychecks are including that 25 that 75 then this health insurance that we just included in the last paycheck. Now one paycheck has that, and so that's gonna be the 1 50 So our calculation then, is gonna be This is what the pay would be were adding to it the life insurance for, ah, the 400 for the two periods of there. Then we're subtracting out the vision and we're adding to it the health savings. So the difference here, the new thing being this health savings account, which were including in the Social Security wages and the Medicare wages. So this that's how we get into that 66 12,002. So the new thing here is that we have to include the health savings account the way we have inputted into the system. It's gonna be taxable for the Social Security wages. So we have to include it to get to this taxable income, multiply that times the rate to get this amount. This amount then should tie out to the amounts that we reported on the three paychecks. If we were to add them together, we should get this. Now remember, it's the employer and employee portions we would have to add together to get to these numbers, which we would re calculate The F i T federal income tax is what it is. So these items could have affected the f i T. But we're not gonna be able to re calculate we can't double check our number. Whatever it was that we entered into the system, if we just add up those three paychecks, that has to be what is going to be put here? We can't kind of double check it as we can here because of the progressive tax system. So everything else is gonna be much the same here. Eso we'd add that up. Gonna close this back out. Let's take a look at what would happen if we were to process the w threes at this time and the w twos at this time. So we're gonna go to the W two and w three. Just double click on that item. We're gonna run it as of 2000 and 18. 2000 and 18. Run that report. And once that is up and running. We're going to review and edit. It's a next, next next to get to the actual numbers, and here we have it. So once again, we've got our wages up top are different from the F I t wages to the Social Security and Medicare wages. If we look at that difference, it's going to be the 1000 for 21 which is reported down here. So if we were toe take this difference, we're going to say, OK, the 30 to 9 50 minus the 31 5 29 gives us the 14 to 5. The 14 to 5. This see now is corresponding to the life insurance that we have in place. And then W now is a correspondent to the health insurance, the health savings account we have set up. So we're gonna try to reconcile this number now to to the actual gross pay. We could think of it kind of like this. We can say All right now, what's happening for the entire year? We were paying gross pay for this amount of overtime and the regular pay this amount each pay period. We had eight of them, that would be 32 500 And then we had the health insurance. Now, the life insurance has some stay for two time periods, so that's gonna be 400. We have the vision at this time for 25 for four pay periods for paychecks. Of the eight we had included the vision that's 104 times 25. And now the new thing, that health insurance is 150 times one pay period or 1 50 So if we get to our what we would think would be our gross pay and make these adjustments to it, we would say, OK, we're gonna take this is our gross pay. We're gonna add to it the life insurance that's gonna be included with regard to calculating the taxes for Social Security and Medicare. We're going to subtract the vision, which is going to be taken out for with regard to the calculation. And now we're gonna add the health Savings account, which, under the way we've set this up, will be included with the calculation of Social Security and Medicare. So that's how we get to the 30 to 9 50 So if we go back over here. That's gonna be the 30 to 9 50 here. We got the retirement plans still checked off here out. Note that we have 3/4 so far, so we should be ableto add up the 3/4 which, if we took the f i t. Should add up to this Social Security and Medicare. If we took the 3/4 should add up these two. If we were to add up the all the paychecks, then they should add it as well. The Social Security and Medicare here should tie out Teoh the three Quarterly's as well, the 9 40 ones for the 3/4. However, this is just the employee portion, so notice this is just the employee portion. You can kind of work this out a few different ways If you want. You could take this amount times to employees portion 0.62 or times the double that portion to tie it out to the 9 40 ones which have the employer and employee portion it go back through the W twos and add up the W two's. It should all work out, and this one's make more sense because they're more on a flat tax. Once you know what the actual Social Security wage should be, then you have to most flight times a flat rate. This is more complicated because we can't just multiply it times a flat rate. We have a progressive rate. And so that's why this tax is a bit more, more difficult. Teoh really understand. So if we go through them, we have the retirement plan set up and the SD I and California State information as well. 77. 304 Payroll Items Setup Garnishments & Union Dues: In this presentation, we will set up payroll items of related Teoh garnish mints and union dues. Here we are in the home page. We currently have the open windows open in order to open the open windows go. They've you drop down and select the open windows list. We're gonna go to the lists and go to the payroll items list. It's in order to add these items were gonna go to the lists, dropped down payroll items, lists. If you're working in the free version of the payroll, you may want to go through the interview process, which would be under employees and the employees set up. We are currently in the paid version of the payroll. We're gonna select the payroll item here, and we're gonna scroll up to new item and we're going to select the easy set up process. I'm gonna go next, and we're gonna be down here this time into the other other deductions which are going to be garnishment and union dues. So we will then select that and say next Here is our set up wizard. We have the garnishment explanation here. A wage garnishment is usually initiated by a court order. For example, let's say employees behind in payments to a lender, the lender may get get via court, order part of the salary of the employees and get it directly from the employer. So type of garnishment were usually required to pay based on a court order or something like that. So that's the 1st 1 will set up what set up a garnishment. We could do these at the same time, but I'm going to set up one at a time here and look at those items one at a time. So then we're going to say next and we're just gonna say the vendor just set up a vendor. It's gonna be Garn Vin Door and say next and finished. So we then should set up this garnishment going to say open. I'm gonna make this a full screen so we could see the garnishment. Here is the wage garnishment there It's gonna be a deduction item. So now we're gonna set the union, do in a similar process. We're gonna go to the payroll items drop up, and we're gonna go to a new payroll item going to say next, I'm gonna we're going to select the garnishment and union do's and say next Once again, same screen we're gonna select this time the union dues. And you could see that similar similar type of activity if we have the donations and other miscellaneous deductions where you can take a look at what is included in those items as well, going to say next and set up the union dues where he's going to say union, then door and next that's gonna be the item and will set up those once again gonna make this full screen so we can see them. There's the union. Do so these two should be similar in nature. As we run the payroll, we're gonna set these up for out one employee by going to the employee center and employees and then employees enter. And then we have Anthony more, and we're gonna say, Anthony, another month, another payroll activity change we have here. We're going to go to the payroll information and this time add the garnishment. So we're going to select the item drop down and we are looking for the garnishment and the union dues. Here's the union dues. And then if we go so I got the union dues here for Go to the Garnish Mints. There's a long list. You can't see all of them from here. But there's the union dues in the Garden. You could just type start typing that man and the populate here so they should be in the drop down once we add them. The union dues were just going to say, our $30 the garnishment We're gonna have to say Sorry, Anthony Day. We got a court order that we got have potatoes garnishment. And let's say that's 300 here for the garnishment. And so we're going to say OK, and now we're set up and we're gonna run the payroll next time With the Union Dues and the gun, Schmitz and comparing contrasted to the prior PayPal's run without the union dues and the garnish Mints 78. 306 Process Payroll With Garnishments & Union Dues: In this presentation, we will run payroll payroll that includes garnishment and Eugene dues and compare and contrast this payroll to prior perils which do not include the encouragements and union dues within. QuickBooks, here we are on the home page. We currently have the open windows open in order to open the open windows go to the view dropped down and the open windows list. Another month has passed for our payroll problem, and we're gonna be down here in the employee center and pay the employees once again. So we're gonna pay the employees down here in the employee center. We are using the pay paid role. This is the paid payroll screen. If you're testing this out with the manual payroll version, the next green will look similar. Under either version. We're gonna go to the pay employees screen here. Then we're going to change the dates to the dates that we need, Which is gonna be 09 31 8 is the next day payroll date. So the end of September, we're gonna pay it in October 10. 0118 So remember, our standard convention is typically going to be that we have the payroll every month, the end of September in this case. And we typically pay it at the at the beginning of the next month, as we have done. So here, we're gonna check off Anthony one more time or not. One more time will again. And then check Anthony and see what we have calculated. This this time with our new items of the garnishment and the union dues. So we've got the same hourly and overtime rates up top. And the new items we have here are the wage garnishment and the union dues. We could see those types of those items over here and the other payroll items as well. If we scroll down, we gotta We had a lot of them now, but here's the years that union dues and here's the garnishment. So then we decide Which side is it on? Is that the employer or the employee? Well, clearly, these are employees of responsibilities, so they're gonna come out of the employee paycheck now. These air two items, typically that are not going Teoh affect the payroll. It'll mean it's not going to reduce the payroll gross pay. It's not going to reduce the payroll, typically for the F I T. Federal income tax, Social Security and Medicare. So the rest of this should be much the same in terms of tax calculations. And then we're just basically removing or taking from the Net pay union dues and garnish mints that we will then pay to whoever the court order told us to pay the garnishment Dio and the union dues to whatever union told us to take the union and from the union money. So there's that net check here, and then we've got the employer portion on the other side, which should look much the same as prior paychecks as well. So let's go ahead and save and close this we are going to. Then everything looks good. So we're going to process this, continue with it and to print the paycheck. We'll take a look at the pay step here, so we're gonna print the pay stub. We're gonna preview the pay stub, and we'll click on here and take a look at it. So here's the similar information up top, and then we have our new information, which is down here in the adjustments to net pay, so they're down here because they're not gonna be something that's going to be affected in terms of tax calculations. If they were, they would be on this side. They would be in the deductions from gross pay. They're not. They're not affecting the tax calculations and therefore are over here. Remember that these things are gonna be the items that are over and above. Ah, the tax made him were basically the Typically the company is providing something to the employees over and above what's being included in the gross pay. Either the taxable company items or the non taxable company items, those that affect the taxes that are being calculated in those that do not. So we're gonna close this back out. We're gonna close this back out and close this back out and close this back out, and then we'll take a look at the check register by going to the banking, drop down up top and using that register, we're then in the checking account. That's the one we want. So we will then say OK, and there we have it. So we have our prior paycheck compared to this paycheck, if we take a look at the difference between the 23247.29 minus 2917.28 We have a difference of 330. Which, of course, is the union dues and the garnishment and note that there's no other difference. And that s o note. It didn't affect anything else, including taxes. No other tax calculations were made on it. It's just that we took out 330 off the bottom out after everything was said and done due to these two items that needed to be paid. So next time we'll take a look at the payroll information 9 40 ones as if it were at the end here and the W two and W three and see the change is there for this paycheck. 79. 308 Payroll Forms With Garnishments & Union Dues: in this presentation, we will process the payroll forms after having a payroll process with garnish mints and union dues and compared and contrasted to payroll forms prior to having a payroll that was processed, including garnish mints and union dues within. QuickBooks, here we are on the home page. We currently have the open windows open toe open the open windows, go to the view dropped down and the open windows list. We're gonna go ahead and run the payroll as if that was the last payroll to see what the effect is on the quarterly's at 9 40 ones and the 9 40 To do that, we're going to go to the employees of Top and we're gonna go to the payroll tax forms and then we want to see the process payroll forms. We're gonna process payroll forms here, and we're gonna take a look at the forms 9 41 of the 9 41 the quarterly form double clicking on that item. We want the quarter end of the fourth quarter this time, and this is a bit tricky because remember, we ran that one as of September, which would be in the third quarter That was the pay period, the month at September. But then we wrote the check in October, October, November, December, the fourth quarter. So we're picking up the fourth quarter, even though no work was actually done in the fourth quarter. But that's when we wrote the check. So just be aware of that. We're gonna say OK, fourth quarter, that ends on 12. 31 18 So we're gonna go to the end of the fourth quarter. We're gonna say OK, and process that information. We're gonna scroll down and go to the next so we can see the numbers were currently on the fourth quarter. And, of course, we only have the one payroll calculated. One payroll check thus far in the fourth quarter are nine funny. One isn't really affected by the garnishment there. You'll note that we have the 1 4084 versus the 3 4087 Those are gonna be that the to wage our calculations. And that's gonna be equivalent to the one paycheck we have just run. So that's gonna be the 4387.5 minus 4184.5. That's the, uh, before one K employees portion. That's the difference between the wages there on the F I T wages and the Social Security and Medicare wages. Now, if we wanted to see where this number came from, cause we're using it to re calculate the Social Security, it's similar to the last paycheck. This is only one paycheck, remember in the fourth quarter. So we pay each time that 4060 to 52 this one employee times one because there's only one paycheck. And so that's the total. And then we had that life insurance here times one, which was is the 200. The Vision times one is the 25 edges, and there's only one paycheck, and then the health savings account times one is the 1 50 So this this difference that is due to this is the check that it would be gross pay. And then we're adding to it the life insurance for that one paycheck. And then we're adding or subtracting from it the vision for that one paycheck and then adding the health savings account, getting us to that 4387 50. So this account then for 387 50 for that one paycheck, cause we're just in the fourth quarter with with only one pay period within it, and we can see how that we would multiply it times the 10.1 to 4, which is twice the rate for the individual or twice the rate for the employees side. And that would give us this number, which we could didn't look at that one paycheck and at the employer and employee together said, remember, we can re calculate it with this information here. Notice what's not affecting. Ah, the calculation here is the garnish. Mints and the union dues were not decreasing the wages for Social Security calculations and the federal income tax wasn't adjusted as well. But note that this number is what it is. Whatever we calculated it to be on the paychecks, we're just gonna add those up and put them here. We can't double check them because it's it's too complicated a calculation to do so, so that's gonna be it. If we add those up, let's take a look at the W two and W three, so we'll close this out and back to our reports here, and we're going to scroll down to the W two and W three in the report center. Double clicking on it and we want 2018. So I'm gonna say to go 18 and OK, ok, and we're gonna go review and edit next, next next. And look at our numbers here. These numbers air for the full year, Remember? So we should be able to add up the quarterly's and get to some of these numbers here because now we have the 4/4. So here's theory. Wages. And here's the wages for the Social Security. What's the difference between those two? It's going to be the 37 337.5, minus 35 713.5. The 16 to 4. That's the 1 64 here, and that's going to be for the employees portion of the 401 K plan and then this number, Social Security. How could we derive that? Where does that come from? Weaken. Take a look at the 9 40 ones and or we could say that one employee we had nine paychecks. Gross pay should be 36 5 62 but then we adjusted it for the life insurance, of which there's only three paychecks. Because that's when we added the life insurance in our system. And that's 600 the vision 25 only five paychecks out of the nine because that's when we added it to this year. And that's 1 25 and then the health insurance 150 times two periods. There were 300. So if we added these up would say add and subtract them, the girls pay would be 36 5 60 to 50. But we're gonna add to it the life insurance of the 600. We're going to subtract two at the vision of 1 25 and add to it the health savings account to get to the 37 337 And that number is here and here. So the Social Security and Medicare wages are there. They should tie out as well. If we were to add up the three, uh, or Ford, this 0.9 40 ones, and so then the Social Security tax. This is only going to be the employee portion. So it if we were to add up that the paychecks for the entire year, we would have to add up just the employee portion. If we want to look at the 9 40 ones, we would have to add up all the 9 41 Social Security and divided two by two to get to this number. Or we could take the wages Times 0.6 to the federal income tax. Here is what it is on each of the W two's. All we could do is added up. We can't re calculate it. So it is there, and we should be able to add it up on the 9 40 ones for the four ah periods as well. We could see here. Box D is showing us the what we withheld in terms of the employee taxes, and that's going to give us the difference between the wages that they get a tax benefit. For that C represents the life insurance W. Represents the health savings account. And then we've got the state tax information down below with the state wages and state withholding as well as as three I 80. 310 Payroll Item Setup Paid Sick Time Off: in this presentation, we will set up payroll items related. Teoh paid sick time off within. QuickBooks, here we are on the home page. We currently have the open windows open. In order to open the open windows, go to the view, drop down and select the open windows list. We're gonna go to the lists up top, and we're gonna be selecting the payroll item list. Will be looking at the payroll item list, and we're gonna add a new payroll item that we are in the paid version. So we're gonna do that down here. If you're in the free version, you may want to and you want to test this out? That manual version, you can go into payroll and you can go into the payroll set up and it might give you more of an interview type process were in the paid version here. So we're gonna go through the payroll item down here and go to a new item. We're gonna slit like the easy set up and say next and then we want to set up the paid sick time off and we're going to go next, and it should set up our wizard to help us to walk through these process. We have the two items here, the paid sick time and the paid vacation. And so we're gonna choose the paid sick time. We're not gonna get into kind of policies between sick policy and paid policy. There's a lot of different items and debates and thought that you can go into in terms of what the best policy is. We're gonna choose the paid sick time off here, run the payroll, etc. The effect. So we'll say next, and that's gonna be it. So we're going to finish up and say finished. And you can see now that we have our salary sick pay and it also sets up on hourly sick pace. We have one for each, whether they be a salary employee or hourly employees. Well, now we're gonna run through payroll, will run the payroll process and see how these items will show up as we enter the payroll process. 81. 312 Process Payroll With Paid Sick Time Off: in this presentation, we will process payroll with our paid sick pay off, set up and compare and contrast you prior payrolls where we did not have the paid sick A set up within QuickBooks. Here we are on the home page. We currently have the open windows open. In order to open the open windows, go to the view, drop down and select the open windows list before we process the sick pay in the payroll. Let's first go to our employees center up top, and we're gonna go to Employees Center, select our employees E Anthony, and we're gonna go down to the payroll information. We won't enter a lot of detail because the payroll will change depending on the needs of the company. What kind of policies are set up? But note this item here. The sick and vacation pay and will select that item. And you can look through this here but hours available. As of 9 31 8 we're gonna put in an amount here. I'm just going to say five here and then hours used in 2018. I'm going to keep it at zero and say OK, so you can look through those settings. I'm gonna close this up. It run the payroll. So we're going to say OK and going to close this back out. Gonna go back to the home page. We're gonna go down to the employees, run the payroll once again. So another month, another payroll. We now have the sick pay set up were in the pay version. We're gonna go to pay employees. The next tab will look similar. If you're using the manual version or paid version, we're gonna have 10. 31 is going to be the month ended. That's gonna be what we want and we're gonna pay. It's on 11. 0118 the next day. As is our normal kind of tradition, we're gonna have a monthly pay and then paid on the next day. We have our one employee that we will check off here, and then we're gonna open the paycheck. Take a look at what we have. It's copying the prior pay, which was the 1 61 the one hour we have the same information that we had for the prior paycheck. What we're gonna do now is assumed that he missed an hour here we're gonna say, OK, Mr Knauer, And we're going to say if I if I put that zero once I select tab, you'll see a change to the hourly pay here. We're gonna keep that over time there. And then the Net check will change. Of course, as well as the gross pay will change and any taxes related to that growth pace. I mean, it's like Tab and we'll say it goes down to 4000. The everything reliant on the gross pay will be adjusted as well. Now we're going to say that he's going to get that our back. And we're gonna do that by saying it was legitimate five hours of the sick pay. So we're going to select this drop down, and we're gonna go to not the salary sick, but the hourly sick because even hourly employees and check hourly sick and the 25 rate will be the same. So we're just gonna put that one hour back in place, and that should bring us back to where we were prior. So I'm just gonna say, one hour and then tab, and that should bring us back up to where we were prior to taking that our off. So we're back up to the 2917 net, and the gross check is now made up of the 4000 plus 2 37 50 plus the 25 now for the hourly sick pay Everything else remaining the same as we can see by the net. Check remaining the same. So the with holdings are the same as we go through the federal income taxes, Social Security and the Medicare. So we're gonna go ahead and say save and close it. So we're gonna say save and close. Everything looks good here. So we're gonna continue and process through this item, continue and create the paycheck. Once that's created, will take a look at the pay stub, printing the pay stub and previewing the pay stub. Here we have the current pay period and we have the 4000 and now we've got the 25. So we're getting to that same amount that we would see for the prior paycheck, except that we have another line item that being the 25 related to the our sick pay that was not there, Of course. In the total hours, the 1 61 would be in the prior tick now at 1 60 that one hour now of being down here in the six pay at 25 giving us the 4060 to 50 much of the rest of the Czech being much the same as it would for the prior check and then the year to date data, as when it closed this back out. We're gonna close this back out. We're gonna close this back out and close this. Let's just check the check, then. If we go to the banking, drop down and use register using the checking account register and we see then that we have this item the blue line indicates because of the current date that we're in now, So that means it's in the future. That's okay. This a practice problem. So we've got the 11 1 and the prior check on 10 1 the amounts being exactly the same because, of course, the number of hours are the same. However, the one was in the normal hours and the other was in the sick. Pay hours resulted in the same check. You can check on this item to see the detail for it. 82. 314 S Corp Owner Payroll & S Corp Medical Insurance Item Setup: In this presentation, we will set up a new salaried employees. This one happening it to be the owner of the S Corporation. So we'll go through the set up process, which will be much the same for any salaried employees as with the owner. And it will also set up the medical insurance item on item that is typically specific. Teoh, the owners of an s corporation. We will be entering this data into QuickBooks. Here is the home page. We currently have the open windows open. In order to open the open windows, you want to go to the view dropped down and the open windows list. First, we're going to set up a new employees, and this is going to be the owner who then typically will often have to pay themselves with the regard to an S corporation. The setting up, however, will be much the same for setting up any salaried employees. So we're gonna go through the employees center by going to the employee dropped down and employees center. We're then going to be setting up a new employee, and I'm going to select the new employees up top to do so. The name here, we're gonna put for our example. Problem will be Judy and the last name Jones. This is gonna be our owner. We would then, of course, need the Social Security number, Which, for our example, is going tobe a 681-94-4688 Gender Female. We're not gonna enter the data birth here. We would typically want to have the date of birth. We're gonna get interest a minimal information so that we can process the payroll for this , this employer and then we have the marital status. We do need that because it's going to be necessary to calculate the f i T. Or we will need it somewhere in the data entry so we can calculate the federal income death . We will say, married here. We're going to say U s citizen. Yes, ethnicity is not necessary. I'll keep it blank, then disability. That will keep this the same address. I'm actually not going to include the address. We would need it for the W two's. However, I'm gonna keep it blank for now and process the payroll, which is taking a look, mainly focusing in on the numbers. Then we're gonna go through the payroll information, we're gonna include a monthly payroll, and we're going to say now, this time it's salary rather than the hourly. So the big change here is that we have a salaried employee instead of the hourly employees now, because is this is the owner. We're gonna include a large salary so that we want to see it, and what we want to do is actually hit the cap by the end of the year. So we get an example of what would happen when you hit the cap for Social Security. So we're actually gonna put the wage here at 500,000 500,000 on the wage. That's gonna be the annual wage. So when we have a monthly pay period here, so 500,000 divided by 12 it's gonna be the 41 666 for each time period. As we process the payroll, the only item we're gonna put over here is going to be the 401 K plan. So we're gonna have the 401 K plan and the 401 k matching. We're not gonna add any of the other items because we want to keep it simple and see what the effect will be for a large salary that will probably hit the cap. We will have it hit the cap at the end of the year, the Social Security cap and the effect of the 401 K plans. So we're gonna have the 41 K plan will be for the employees portion. He's gonna be 3500 we're gonna have the match being 1750 Now, these are just gonna be arbitrary. Numbers were not going through. Any regulations on the 401 k would depend on what the policies are for the for a one K, we're gonna put this information in just as an example to process this payroll for the salaried employees. The next thing we do is go to the taxes up top. We need to set up the taxes, so I'm gonna select this item, and once again, we're in the federal tab. We need to say the marital status were going to say, is married number of exemption doing exemptions were going to say, is three not 63 and then we've got the extra with holdings, keeping that the same Medicare, Social Security, federal unemployment. We will keep those items for the state. We're gonna say the state is California and we're gonna keep the S u I and the SD I let the computer Catholic that, and we're gonna go to California here as well. Ah, we're going to say once again, marital status and allowances, We're gonna keep it at three. This could differ from state to fed, but we're gonna keep it the same. And that's what we have here and everything looks good. I'm going to say, OK, it's gonna say that Judy Jones is subject to any of the following taxes. Employment, training, tax going to say Yeah, so set that up, please. QuickBooks added the following tax to the employee record. That's a California tax. So this would be due to the California, not a federal tax will change from state to state. In other words, we're going to say OK and OK and that should be it. She is set up. We're gonna say OK, that item is set up, So that's basically just setting up a salaried employee. This one happening to be the owner who for an s corporation would have to pay themselves in many circumstances. Now we're going to set up a new payroll item. So we're gonna go to the lists, drop down and we're going to go to the payroll item list Payroll item list. We're going to set up a new item. This is in the paid payroll items. So the pay payroll selecting the payrolls item drop up and going to new of top, we're gonna select the easy set up and go next. We're gonna keep it on the insurance benefits, health insurance, dental, and so on and say next. Well, then have this set up, Wizard. What we're looking for is the S corporation medical. And if you look at the example here, you want to look into the to the AES Corporation. If this is a situation that you have, it often happens for, say, a single member s corporation that set up An s corporation here or as we read, set up an s corporation medical benefit payment. If your company is an s corporation that pays taxable medical insurance premiums 42% shareholders. If you're not sure whether your insurance plan premiums are of this type. Check with your plan administrator or your accountant so you can read into more of that. But this is another option that we just want explore, in case you're looking most of time, oftentimes would be applicable to small company as corporation type of set up, one type of set up. And so we're going to say next and we're going to say the vendor is gonna be once again the health insurance vendor. I'm gonna keep it at the same health insurance vendor as our prior insurance. We set up and say next and finish that item. We now have the S Corporation medical insurance ID up here, and it says it's the company contribution. Now we're gonna go back into Judy Jones and add this item to our new inflow E Judy Jones. To do that, we're gonna go to the employees, dropped down employees center, and we're going to select our new employee, Judy Jones, the owner, and then go to the payroll information. And on this side, additions, deductions and company contributions. We're going to select the drop down, and we will then select the S Corporation medical insurance. So you couldn't see it at the bottom there, but it's s corporation medical insurance. We will include the amount saying 2000. It's gonna be 2000 for that item. We're gonna say so, okay. And then we're gonna process the payroll with our new salaried employees and the insurance for the AES Corporation set up for that. And that's what we'll do next time. 83. 316 Run Payroll WIth S Corp Medical Item: In this presentation, we will process payroll with as corporation medical insurance items set up comparing and contrasting this payroll to prior payrolls, where we had no medical insurance items set up within. QuickBooks, here we are on the home page. We currently have the open windows open in order to open the open windows. You want to select thieve, you drop down and open windows list. We will be processing payroll once again. Down here in the employee section, we're going to say, pay employees. We are running the paid paid role, so we'll have the pay payroll screen here. If you're running the manual payroll, the free payroll, then the next train will look familiar. We will then select pay employees, pay employees will take us to the main input screen. We're gonna be doing this paycheck as of the month in or period in payroll period and 11 30 31 8 Okay, 11 31 8 and then we're gonna pay it on 12 0118 So the period end is the end of November. We're paying every month, and we're gonna pay it on the first day of the following the first following day in accordance with our system, that being the first day of the next month. Now we have two employees that were gonna pay. We've got Anthony more again and our new employee, Judy Jones, who is the owner of an s corporation and therefore has kind of a special item. Now, that being the item for the insurance for an s corporation, so it's gonna be escort medical insurance. So once those air selected, I'm gonna click on Anthony mourn. Just take a look at the paycheck. It should look much the same as the last paycheck where we had the gross pay here, the overtime pay, the 41 K being taken out, the dental, the vision that union, the wage garnishment that medical employees, the federal withholding, the Social Security and Medicare taxes and the f i t. With holdings. Note the medical insurance for our employees. We have the dental and we have the visual and those were taxable and pretax respectively. And they're being pulled out of the paycheck on this side. We can see them over here in our other payroll items as well. We can compare and contrast this to what the s corporation has item is gonna be set up as just for a comparison of the dental, the different insurance type items that can be set up within payroll. So we got those two items and then we have health insurance on the 110 here that was set up as the employer paid. And you can see it's over and above on the employer section on this side. Let's go to the next Employees now. So our check figure here's to 898 53 net to check. So we're gonna say save. And next Here we are on Judy Jones. Here's our new employee. We have. She's a salaried employee now, and this is for the month. Here's we're gonna have higher earnings here, and then we have the salary paid on this side. We have the 41 K that's the employees e portion of the 401 K and then we have that with holdings. Federal withholding is being calculated for the salaried employees. We have the Social Security, the Medicare and in the California withholding and disability. On the items side, we have less items here. Wouldn't have too many items. All we have is the employee portion the employer portion of a 41 K or the match the employee portion on this side taken out of the employee paycheck, the employer portion on this side being paid over and above on the employer side of things meaning being paid over and above the growth pay of the employees are new eyes in here being the S Corp medical insurance and now being set up on the employer side as well. So you'll note that that's not being included in gross pay. It's not being taken out of gross pay being included on the company side, something that's being paid for the employees over and above what's gonna be reported? Astros pay. So that's gonna be our new item. Also note if we scroll back down here into the company summary. We have the federal unemployment and state unemployment, even though this apparel being processed towards the end of the year. And this is something that's not going to be on Anthony Moore's paycheck, even though Anthony earns far less. And that's because this is the first pay period we've processed this payroll for this employee for Judy Jones and therefore she hasn't yet hit the cap. So just be aware that any time we have a new employee, we may be used to not seeing these these items being populated. But if it's the first paycheck for any employee later on in the year, we'll see those be populated and will also see them again. When we have the new payroll for the new year happening, then it'll pop up for all employees will start to have these federal unemployment in California. Unemployment portions on the employees er side of things were going to say, save and close Here, everything looks like it's set up as we think it should be. And therefore we're going to say, Continue and create the paychecks will now take a look at the pay stubs. So we've got the pay stubs for the two employees were going to preview them. Preview. They pay stubs. Here's Anthony, so we have the gross wages up. Top deductions from gross grows being up top because those are the things that could have reduced some types of taxable wages, including Social Security and or the F i T federal income tax. Then we have all the taxes, then we have the adjustments to net pay these air typically going to be things that are gonna be taken out of the paycheck but not affecting the taxes. They're going to be taken out after taxes and not effect the tax calculations and then up top. We have the sick time to the sick time calculation. Taxable company items will be up top and then the non taxable company items these being things that are not included in the gross pay but which are being given by the company, including those that are gonna be influencing taxes in subway and those that will not be influencing taxes in somewhere. And then we have Judy, who is our new employee. A little less detail here. Make it a little bit easier to see. We've got the salary. We've got the 401 k for the employees E side that being up here on deductions from Gross paid because it will be something that's going to reduce grows pay as we calculate the 401 K plan. And then we've had we've got the federal with all insult, security, Medicare, California withholding and disability. You'll note that the taxable company item is on the right side, and that's going to be the S Corp medical insurance. The 200 included on the right because it's not being included in the gross page. Also note that if you are an s corporation and the owner of an s corporation that you want to research the health insurance because this could be something notice it's in the taxable company items that could be included for the federal income tax and then may need adjustments on the individual form 10 40. So we won't get into any more detail than that here. But just be aware of that as it comes to the AES corporation, meaning as corporation, oftentimes owners have to report payroll rather than just taking the profits out of the company, as might be the case with a sole proprietor. And then we have on top of that, the insurance, the medical shirt insurance. How best to deal with that to get through the deduction for did and so research. Those two things, if you're taking a look at the S corporation here, is the S Corp item not included in gross pay may affect the federal income tax. May need something to do with the 40 with the 10 40 form 10. 40 individual tax return for the medical insurance. And then we have the nontaxable company items, which is the for a one k company match. And that's gonna be what was paid over and above by the company for the 401 K not being included in the gross pay and not being something that's gonna be taken into account when calculating the taxes. Let's go back here when it closes back out. Gonna close this back out. We're gonna close this back out and we're going to go. Teoh, we're gonna close this bag out and let's go to the banking up top and use register, check register and just check that that last check is there. Here it is. On 12 1 There is the last check. If we were to double click on either of these, these two checks were just generated. Were concentrating here on Judy Jones. Double click it on Judy Jones pay check and the paycheck detail. This will give us our paycheck information 84. 318 Payroll Forms With S Corp Medical Insurance Item Setup: in this presentation, we will take a look at payroll forms forms 9 41 and w two w three after processing a payroll with A S corporation medical insurance item that had been included comparing this to payroll forms prior to processing a payroll which included the medical insurance item within QuickBooks, Here we are in the home page. We currently have the open windows open. You can open the open windows, go into the view dropped down and selecting the open windows list. We're gonna go up top Teoh the employees section. We're gonna go through the payroll forms and process the payroll forms. So employees drop down payroll tax forms and W two forms and process payroll forms. That's gonna take us into our employees center. We are in the paid version. We're gonna process thes payroll forms. We're gonna take a look at the 9 41 1st double clicking on the 9 41 We are in the fourth quarter at this point, so we're going to say the fourth quarter bull in 12 31 18 So that's December 31st 2018 the year that we are working in. We're gonna select that item. We should have to payrolls that are going to be our two paychecks in this quarter or two payroll periods that are in this quarter now three paychecks. I'm going to select next item down here. We're in the fourth quarter That's being process. We're gonna go down and see what numbers are being generated from QuickBooks. We can see here that the taxable Social Security is different from the wages F I t up top that being by the four old one K contributions. And then we could take a look act of this number and try to think about where does that number come from? In terms of total wages. For the quarter, we have two employees. At this time, we had three payroll paychecks that have been processed, at least for one of our employees. At one paycheck for the other employees are original employees. We had three paychecks at 4060 to 50 or 1 12,087 50 within had adjustments for life insurance, vision and health savings account and those things those added up Teoh, our 13 once 37 50 for our first employee. Then we have our new employee with the one salaried payroll, not including life insurance, vision and health savings gives us the 41 666.67 If we add those two together, we're gonna get our 54 8 04 So those they're going to be our Social Security wages, which we could then multiply it times 2.124 to give us the Social Security amount as well as the multiplying times 0.29 to get the Medicare amount. These then will match if we add up all the paychecks for this time period for our two employees. Three. For the first employee, we have one for the second ploy that we have just added to the payroll. If we were to add up the employer and employee portion of the payroll calculation, note that only the employee portion will be in the pay stub. But we'll have both sides when we process the payroll. Then we would get to these numbers. There's never hear. This. 7 9099 would be whatever we calculated within the system, because QuickBooks would generate that number, and there's no way for us to kind of re calculate that here Because it's a progressive tax . We scroll back down, then we have the totals here. We haven't been processing the liabilities for this example. So when it closed this back out and close this back out must take a look at the W two and now the w three. Now that we have to employees, the LV three will now differ being the summary of the two. W two's gonna double click on the W two and W three change the date from 2017 to 2000 and 18 and okay, okay. So this will be our information. I'm gonna go ahead and review and edit, and we'll say next. Next, Next. And here is our information. So we have. This is for the entire year now. So if we're thinking about our entire year of information and this is Judy Jones, we only have one paycheck so far for Judy Jones. So here we have thief 40,000 won 66 which is different than the 41 666.67 This amount, then, is the total payroll on the growth pay on the paycheck. The difference between those two once again will be the employee portion of the 401 K and the S Corporation Insurance. So that's gonna be the difference here. Federal income tax, the Social Security and Medicare. That's being the employee portion of that retirement plan is checked off. Here is where we have the S Corp MP. That's gonna be our s corporation item that we had set up for the owner of the S Corporation reporting that 2000. And then we have the California S D I. And in the California withholding and wages down here are prior employees. We go to the next employee, then this is gonna be a Anthony our employees that we've had for that year here. And so we've got the 46 87 50 different from the 44 ah, 57 50 by the 2000 and 30. So if we were to subtract those two out, we would say OK, 46 87.5, minus 44 old 57 point five gives us the 2030. That's the employee portion of the Social Security. And then if we wanted to get Teoh the this number of the 46 87 50. Partial part of that difference is C and W. If we take a look at the calculations here, we're going to say I'm gonna hide this. We had this amount per paycheck. 11 paychecks. So far, they've all been the same. So 44 6 87 50 would be gross pay. Then we had the adjustment for life insurance, which I believe are five periods or $1000 adjustment vision, eight periods, 200 adjustment health. Four periods, 600. If we add all those up, then we get to the 46 87 50. So that's gonna be the 46 87 50 reported here. We can see that C and W represent the life and health savings respectively. Then we have the retirement plan has been checked off. We got the California S D I and California wages and with holdings. If we go to the next item, then now we're gonna take a look at the W three now that we have to employees and we can see that it's basically just a summary of two employees we have so far. So we've got the 84 to 24 from This is just summing up the to line ones in our Prior to employees the line three and five being if we were to take our little worksheet and add those two wages up now that's the 87 7 54 17 That's the 87 7 54 17 meaning it's gonna be just adding up the W the box 34 R two w two employees as well as, of course, box five same items and ah, 24 and six. Same thing. We're just going to sum up the information on the prior W twos. So then we have the deferred compensation being grouped together in 12 a and then we have the state wages and state income tax as well. 85. 320 Process Payroll With Year End Bonus: in this presentation, we will process payroll which will include a year end bonus within QuickBooks. Here we are in the home page. We currently have the open windows open. In order to open the open windows, you go to the view dropped down and the open windows list. We're not gonna be processing payroll. This will be the last payroll for our payroll processing in this problem. We're going to go down to the employee section and paid in blue ease. We're gonna enter the data into the paid payroll. So if you're using the manual version just as practice, the next green should look familiar. We're going to go to the pay employees here, and then we'll get into our pay employees screen. We're gonna add the last payroll and note that the last payroll oftentimes the owner of Thedc or aeration or the s Corporation in this case of the owner of the business, wants to do some year in planning for to know what that last payroll should be, possibly for retirement plan types of benefits that could be affected by the payroll. Possibly because, for example, in this case, an s corporation, if it's an owner of an S corporation. Then they may need to recognize some portion of payroll and make any adjustments to make sure that they're recognizing enough payroll in the S Corporation as wages to pay Social Security and Medicare. So there's different reasons why there might meet adjustments at the end of the year for the bonus, often tax reasons for them. What we're going to do here is process the payroll at the end of the year as we normally dio 12 31 18 But we're gonna make sure, actually, to this time process the paycheck before the year end as well. And that's because if we processes after year in the payroll, being on a cash basis method, typically at least for the payroll reporting will report the payroll in the next year, even though the work will be done in this year. So we've seen that difference at that timing difference a few times now. When considering that last year payroll and considering the bonus for it, it may be a consideration we need to make and say, Hey, do we really need to? We need to run the last payroll in the current paper to make sure that we're getting whatever we need done with the bonus calculation that we are adding to, uh so then we're gonna go ahead. So that's a major difference here. We're gonna We're gonna keep this paycheck in the same year. Then we're gonna check the two employees off. We're going to select these items, select these employees and see what we have for them. Here's Anthony More. We're gonna keep Anthony more, much the same. No bonus here. So Anthony's gonna have the hourly pay that the overtime pay the employee employees portion of the 41 k the dental, the vision, the union, the wage garnishment, that medical for the employees of the federal income tax withheld the Social Security and Medicare state with holdings and disability nets. Check 8 2098 55 And then we have the employer items on this side as well. Same as prior paychecks were going to say safe. And next, take a look at Judy Jones. Now Judy Jones is the owner, and we're going to say that there's gonna be a bonus here for the owner, and there could be again multiple reasons one might be that Judy Jones needs to recognize the income for the AES Corporation, and she started basically processing this at the end of the year and or like we said, the retirement contributions. But in order to just see the calculations in the system, we're gonna add a large bonus years. We're gonna say bonus and we're gonna We're gonna enter the bonus at 200,000 so we're gonna add the bonus so that we can see and this is one of the reasons we want to enter. Ah, large bonus here is because you'll notice I'm gonna read through this. You may notice that the amount of one or more taxes on this paycheck either smaller than usual or zero This is because Judy Jones has reached the annual wage limits for each of the taxes. The Social Security limit for 2008 teen was 1 28 400 So now she's making over that, and therefore there's gonna be a cap at that 1 28 400 We also have a California disability . We're gonna focus mainly here on the federal taxes. So the social Security is what we're looking for to see that cat being reached. We can then see here that the salary is gonna be here and the bonus will be here in the grills pain. We got the 401 k for the employees being deducted the medical employees e being taken out of the paycheck than the federal withholding is going to be affected by the bonus that's being included. And it may be a little bit different. It's gonna be calculated for us by QuickBooks within the pay payroll. But it may use something different than just the tables or the standards set up for calculating. In other words, there might be different rules that are being used to govern the calculation of the federal withholding with regard to the bonus. And it's also something we may want to do. Some added planning to see if that bonus is going to cause MAWR with holdings that we should be allocating or giving to the employee, given the individual's circumstances on their own 10 40 forms. So those air just considerations to take into consideration with the bonus, we're gonna keep the calculation that has been calculated by the system for the federal with holdings that is a complex calculation that will need tables in order to do so. And we're relying here on QuickBooks to help us out with that progressive calculation, the Social Security note that the cap has been reached. So at this point in time, we're not just taking the total payroll, which would be the 200 1000 plus plus the 41 666.67 times 0.6 to the employee portion. It's gonna be far less because they hit the cap. And that only happens with high earners for Social Security. Because we noticed that the cap was was a fairly high cap that we had on the social sick. I believe it was 1 28,400 So if we were to look at the calculation here, we had, then the 1 28 400 minus. Let's do that one more time. Went to 8400 minus last times pay period. Last times payroll 41 666.67 means that 87 6 86 7 33 33 would be included in this paper before the cap was reached. Times 0.6 To would give us this 5377 So only a portion of the total gross pay is going to be calculated for that tax. On the other hand, there is no cap for Medicare, so Medicare will be leaked. The full 200,000 plus 2 41666.67 times 0.145 And that's gonna be the 3504 Then we have the California with holdings and the disability. Then we have these Social Security for the employer portion matching as well as the Medicare. We no longer have the FOTA and the suit of federal unemployment and state unemployment because this employee met that in the prior paycheck, their first paycheck. Ah, food and suit of those having low cats being met already. We're gonna go ahead and save and clues this and everything looks okay. We got it in these this year, which is what we wanted to do. So we're going to continue and create the paycheck when I say I understand with this one here, and we're going to say, Let's take a look at the pay stubs and preview that pay stubs. So here's what we have for Judy Jones. We got the 41 666 the normal pay than the bonus. The 200,000 giving us the 2 41 666.672 paychecks have happened so far. So the year to date is on the right. The year to date numbers. We've got the deductions from gross pay being the 401 k for the employees and then we have the taxes. And then on this side, we have the taxable company items that is the S Corporation medical insurance, that non tax company items, the 401 k for the match. Those being part of or not included over and above those being amounts over and above, paid by the company not included in the gross pay. Then we have Anthony here, and the paycheck was much the same. Four. Anthony Anthony has the current pay period information that deductions from gross pay being the 41 K and the vision that taxes, then the adjustments to net pay these being items that are gonna be taken out of the paycheck but not affecting the payroll calculations for taxes, Then we've got the sick pay the taxable company items and the non tax company items. We're gonna close this out. We're gonna close this out. We're gonna close this out and finally close this out. Then we'll take a look at our register, going to the banking drop down, going to the EU's register, we'll say, OK, and then here our our two paychecks, Judy and Anthony, We double if we click on either of these items. Well, look at Judy. Have the bonus here, of course. Pay detail. Here is the detail for Judy. 86. 322 Process Payroll Forms With Year End Bonus: In this presentation, we will process payroll forms the 9 41 and W three, including a paycheck, which included a year end bonus comparing and contrasting the payroll forms that include a year end bonus with prior calculations, which did not have the year end bonus within QuickBooks. Here we are in the home page. We currently have the open windows open. You can open the open windows by going to the view dropped down and selecting the open windows list. We're gonna go up top to the employees and we're gonna go toothy payroll forms and w two and we're in the process payroll forms. We're now in the employee center payroll tab file the file forms that we're gonna be in the 9 41 and take a look at the calculations So far for the 9 41 we are in the fourth quarter, ending on 12. 31 18 December 31st 2018. For our problem, we're gonna say, OK, process those forms. I'm going to say next and see the calculations we have for the fourth quarter of the 9 41 line to has the F I T wages and then we've got the wages over here for the taxable Social Security, the taxable wages for Medicare and then the taxable wages and tips subjects to additional Medicare tax with holdings. And this is gonna be for the high earner here. So you'll note that we have this additional tax. If we're over a certain dollar amount for the Medicare, we're gonna focus in here on these two items. You'll notice that the taxable Social Security is capped at the 1 45 900 Well, the taxable Medicare is the 308 33. So of all these numbers, this is the highest wage number, this tax book, Medicare. So let's first get to this number, and then we'll see where these other numbers are derived from it. So we're going to go back into our calculations. Were going to say, OK, there was our our original employees. Anthony had four paychecks, and that's because we had the three paychecks for October, November, December. But the prior paycheck to that September was actually paid in October, so we have four paychecks here. The last pitch in December. We squeezed into this year by actually paying it at the end of the papered on December 31st . So that's why we have four in this quarter that gives us the 16 to 50. Then we have an adjustment for life insurance, vision and health savings given us 17 500 for Anthony. And then we had our big earner, Judy Jones, who had to pay periods. This is the normal salary that Judy's getting for each pay period. And so that's the 83 333 And then we gave the bonus the 200,001 time bonus of the 200. So So this is our first employees total. This is our second employee. Normal wages. Here's the bonus. If we add them up, that's gonna give us our 308 33. Our second employee here hit the cap, however, and all the cap was hit in the last quarter. So that means that the cap is at 1 81 28 400 the Social Security Cab. So, in terms of the Social Security wages, we have Anthony's wages. Anthony did not hit the cap, and then all of Judy Jones witches was in this time period. And so we have to cap them at 1 28 400 even though earnings were actually up to the 2 83 333 So, in other words, if we add up Anthony's earnings and the capped earnings at 1 28 400 that's going to give us the Social Security 1 45 900 So that's gonna be these two items here. The difference between this 300,000 and the 2 97 21 for F i T. Should be the contributions into the employees 401 K plan, and then we have the items that are going to be subject to the additional Medicare. For the higher earners. That's only being subject. Teoh Judy Jones The earning subject to additional Medicare is going to be the 83 meaning it's going to be the amount over the 200,000. So over a certain dollar amount, you have additional Medicare. Judy had to have 83 333.34 over the 200,000 in the fourth quarter, being subject to the additional Medicare at the 7 50 So those there are three wages. These are our rates employer and employee portion We should then be able to look at our four paychecks and add up the Social Security Medicare for both the employer and employee portion matching these items. The F I t. For those four paychecks should be whatever they are calculated to be. And we can't really double check them because of the complexity of the progressive tax structure. So we're gonna skin. It's a report. That is what it is that will give us the totals we have. So far, we haven't paid off the liabilities on them in this practice problem. We're gonna go then to the W two's now. So if we go toothy w to scroll down just a bit w two and W three, we're gonna make it for 2000 and 18 and say OK, processing those forms were going to say, review and edit next, next, next, and then we'll actually see our deputies and w three. Here's what we have for Judy Jones. Now you'll note that the three wage numbers are now different, so they're all different numbers on the wage numbers. The last one. The Medicare is probably closest to actual wages because it's the highest number, although it's not completely accurate as well, cause it could be the case that there are some things that aren't included in the Medicare wages number. If we take this Medicare wages and we compared to the f I t wages and see what that difference should be, it should be the 283333.34 And then we're going to subtract from that. The 401 k 7000 reported here, 7000 and then add to it the S Corp MP, the 4000. So we'll say plus for 1000. And that's gonna give us our difference here in the wages. So these two items are giving us our difference between the Medicare wages and the F I T wages. The Social Security wages will, of course, be at the cap. So they hit the cap and therefore it stops at the 1 28 400 Because that's that's the cap. It will never go above that. Then we have the f i T. Calculations up top, which will be the summing up of everything reported on the paychecks, the Social Security, which we can compare to all the W twos and or the quarterly's the 4/4 now. The Medicare. Same thing We should be able to weaken. Basically re calculated. But now we have the additional. Remember, we have the additional. We could look at the 4/4 which would sum up to this as well as all the paychecks that are related. Teoh, this employee, we have the for one cave reported. We have the S Corp cp that California S T I. And then the California wages in with holdings. Let's go to the next employee, Anthony. We had no bonus here, so it should be much the same. We have our 12 pay periods for Anthony at this time. Anthony will then have the 50,000 Social Security and that being different than the 48 to 17. By this 2000 to 33. This 4 50,050 can be thought of as the what he gets paid each time here. And then we're going to most by that times 12 pay period. This would be the gross pay. And then we had adjustments for life insurance vision and the Health health savings account , which would adjust to 4 50,050 that 4 50,050 then is what we have here. We can see that we have Line C and W C and W relating to the life insurance and the health savings account. Then if we scroll down, we've got that California S T I and the state wages as well as the with holdings. Then we're gonna go to the W three itself was girl next and next we see the W three. This will be summing up all the information for all of our two employees. Now, for the total wages we can see, of course, once again that total wages do not line up for the three wage categories in terms of F I t . Cell security, Medicare, three different numbers for those boxes. If we were to consider the total wages, then we're going to say the Medicare being kind of the most accurate is gonna be the what we summed up for our two employees. Plus the bonus to get that 3 33 7 83 And then, Of course, the more complicated differences are due to Judy Jones, the high earner who hit the social security cap, which is the reason that these two items are going to be different. And then the differences between these two being the amounts that are going to be reported for the 401 k and the S Corp medical information. But in essence, these will be the summing up of as if it was just one employee summing up all of the information that's reported on all the boxes for all W two. So if we some those up, we should get these items we should be able to compare to the Social Security and Medicare and the F i t to the 9 40 ones as well. We can tie those out. Just remember that this is only the employees e portion, so we would have to just be looking at the employee E portion or half Ah, the amounts that would be reported on the 9 40 ones. As we compare all these items out, here's the deferred compensation for all of the Box 12 and the state wages and state taxes 87. 324 Add Payroll Benefits Expense Account: in this presentation, we will add a payroll benefits expense account and change payroll items to apply towards that new payroll account within QuickBooks. Here we are on the home page. We currently have the open windows open. You can open the open windows by going to the view, drop downs and selecting the open windows list. We're gonna start off here by going to the report's section up top and take a look at the profit and loss report that we have so far. Reports drop down company and financial will take a look at the profit and loss standard within the province. Law Standard. We're gonna change date range from a 101 to 1 or lots are No. One No. 118 January 1st 2018 to 12 31 18 We've run payroll. That's all we've processed so far, and we have one account that's called payroll expense. It might be the case that we want to break out. The payroll extends into multiple different items. For example, we might want to break out the payroll liability portion. We might want to break out something like payroll benefits versus other payroll items within the system, we may want to break out different payroll accounts by different employees. The way we conduce this is we can go into the payroll items and adjust the liability accounts that will be affected as we process these. So, in a similar way as inventory items driving the accounts that will be affected when we process the the things like invoices, the payroll items are gonna determine which accounts or drill are gonna be affected. Here. This is the default payroll items that we have set up now so we can customize that a bit we can go over to in order to test this out. Lists up top, we're going to go to the payroll items list, and we're gonna pick some of these items that we would want to change. So if we go through some of these payroll item, I'm gonna go to these items that say it's gonna be the employees er the the company contribution type items. And so we might want to break those company contribution type items out into a separate section. Let's say, and in order to do that, we need to set up another account and apply these accounts out of just the payroll expense into these other items. So if we were to double click on the 401 k matching, we're gonna go this'll. It'll question here about the 401 k matching, we're going to say next, we're looking for where the expense account is, and here's the expense account. So it's going directly. It's going into the payroll expense. We're not going to change the liability here. We're gonna change. The expense account will select the drop down, and we want to add a new account. We don't have it set up in the payroll system yet, so we're gonna add a new account. We're gonna call it employee benefits. It will be an expense type of account. And that's all we're gonna add here and say save and close. And then we'll say next. And then we will say next, keeping this item the same and next and then we're going to go ahead and calculate based on quantity will keep that the same. Next and finished, we would typically want to run a change like this on our first payroll and or at the start of possibly a new year, so that the groupings will be the same. But we can apply this to the retroactively. That's what we're gonna do here so we can see the adjustment. So we're gonna update all existing transactions to this new account setting set up and then say OK, and there we have that one. We're gonna do the same thing to these three item. But first, let's go to our profit and loss up top and see what has happened to it. We're now in the profit and loss, and we could see that are one item for payroll has now been broken out to employee benefits and payroll. If we double click on this item, we could see that this portion has been broken out and they're gonna be from the same paychecks if we double click on them and go to the paycheck detail here is going to be the detail of that information that we just pulled out. The 101 50 being the for a one K match. So the 101 50 up top for a one k matching. So what closed this back out will close this back out and we'll close this back out. Next, we're gonna go to the payroll items once again, and we'll do the same thing for the group. Life insurance will double click on the group group Life Insurance going to say next, and we're going to change the expense account to the benefit account again. So I'm gonna select that item, and we're gonna go to employee benefits and say next, next, next, next, And finish that up and again. We'll start it from the beginning, so we'll change the whole process. Okay? Done back to our payroll reports. It should then adjust the federal benefits again, back to our payroll items list. Let's do it for this item. Health insurance, all the company contributions, health insurance. We're going to say next, we're gonna change the expense account to the employee benefits. So we'll scroll down to the employee benefits and just go next, Next, next, next finished. And we'll do it from the beginning again. Okay, We're gonna do the same thing for the H s, A health savings account. Double click on that. Next, we're gonna change the expense. Teoh the benefits account again. And next, next, next, next, and finished to the beginning of the time, period. And okay, one more time. We're gonna go to double click on this, Adam the S Corp Next, we're looking for the expense side, which we will change to the employee benefit And next next, next, next, finished. And all to the beginning, all transactions and okay. And now we've changed those items. So if we go back to our profit and loss reports, we see that it's not grouping everything just in one expense account of breaking out. Now, those items that we could consider or break out into another account if we so choose these being the account that we've chosen employee benefits, double clicking on them will see these items in there. They are, of course, going to be going to the same paychecks. But it's gonna be breaking out those items in relation to the contributions. Three owner contributions into another account 88. 326 Add Payroll Taxes Expense Account: in this presentation, we will add a payroll taxes expense account and adjust inventory items to be applying payroll taxes to of the payroll tax expense accounts within QuickBooks. Here we are in the home page. We currently have the open windows open. You can open the open window is going to the view dropped down and the open windows list. We're gonna open up the report for the profit and loss first by going to their reports, drop down. Going down to company and financial and selecting the profit and loss reports will change the date range from 010118 to 12. 31 18 January 1st, 2018 to December 31st 2018. The default for QuickBooks. Remember, It's just a group everything into payroll expenses. We broke out that benefits last time. This time we're gonna break out the payroll tax items. It will do that by adjusting the items in the items that list. Let's then go to the lists dropped down and we're looking for the payroll items list. So the payroll item list and we're gonna go and look for the employee error taxes and adjust those payroll items. For example, the federal unemployment. That's an employee er tax, not an employee tax. So we're gonna go and said and double click on that item will go through the interview process and say next, and we're looking for the expense. So here's the expense side. We want to put that into its own expense. Accounts were going to say, Drop down new expensive gallons, and we're gonna make it a payroll tax expense account. This time it is an expense type account, payroll tax expense. And we will go ahead and save and close and go through the rest of this by just saying next , keeping it the same next, next and finish. We're gonna put it to the beginning of time again. You probably want to make a change like this at the beginning of a time period and go forward with it or at the start of setting up payroll. But we're gonna go back to the beginning so that we can see the change that we have made. We're gonna say OK, and look at our profit and loss, then refreshing. And we'll see it's breaking out now that payroll taxes, if I go into this item, it's gonna have the same paychecks. But it's gonna be breaking out that fota notice. It's only happening in the first paycheck until Judy Jones steps in here because Judy Jones was a new employee and had food at down here. So food Teves, Our first change. What closes back out? We'll change some other ones because this is a good time. And the federal withholding. That's an employee. We're not gonna change that. The Medicare. Ah, for the company. That's one we're gonna want to change. So this is the company side, not the employee side. So Medicare for the company double clicking on that. We're going to say next, and we want to change, not the liability accounts. So we'll say next. We're looking for the expense account will change this payroll expense from payroll expense to payroll tax expense. That's gonna be our change, and next, and everything else will remain the same. So I'm not gonna change anything else, and I'm gonna put it well, we're gonna put the change to happen all at all, transactions. So we're gonna say OK and see what happens. There. We go to the profit and loss. And now, once again, we've pulled out more information to the payroll expense tax expense versus just the generic payroll expense. And so, if we double click on that, will have more data here. This being the employer portion of the Medicare, I believe we just changed. Closing this back out. We're gonna go back to our payroll items, see what else we can do. This form we've gotten, we're not gonna change the employee portion. Social Security for the company, the company side. So that's what we want to change. We'll double click on that. And we're going to say next, not the liability accounts. Next, but the expense account. We're gonna change, too, the payroll tax expense and then next and then next, next finished. And we'll do it from the beginning of time here for our QuickBooks, indeed it. And okay. And then if we go back to our profit and loss in the open windows, we could see it's changed once again for the Social Security is fairly substantial change. Now, that being the bigger item, So we're gonna close that back out. We're gonna go back to our payroll items, then the so security employer. We're not gonna do it for that one. The California with holdings, We're not gonna do it for the California. We won't do it for the for the disability, either. The unemployment, however, is one we should do it for. So we're gonna go into the California unemployment. Even though this is a California item, we're gonna go into that item. And so we're going to say next and then this payroll expense here, we want to change that to the payroll tax expense. And next next, next, next and finished. And we'll do it from the beginning. OK? And we'll do it one more time for this California training. That's an employer taxes Well, for the state of California. So we'll double click on that next. And then we're gonna change the expense to the payroll tax expense Next, next, next finished. And from the beginning. Okay. And those of them now, if we go back into our profit and loss report, we've got broken out in our expense accounts, the payroll expenses, the employee benefits, and then the payroll taxes. And these are gonna be just the employer taxes. And this should help us to break out and tie into the forms that we're gonna report that w twos the w three so that we can break out what the payroll expenses are. The benefits and then this employed er taxes that isn't included in the gross pay. 89. 328 Payroll Summary Report Compared To Income Statement: in this presentation, we will compare the payroll summary report to the income statement taking a look at the expense accounts related Teoh payroll. We will do this within QuickBooks. Here we are in the home page. We currently have the open windows open. In order to open the open windows, we go to the view, drop down and select the open windows list. We're gonna first open the income statement by going to the reports. Drop down. We're gonna go to company and financial and open up the profit and loss or income statement reports changing the date range from 010118 12 31 18 January through December of the year. We are working on 2018. I've just increased the font size a little bit. So it be a bit easier to see. Note that we have breaking out from the default settings of having all payroll grouped into payroll expenses to breaking them out between employee benefits, payroll expenses and payroll tax expense. As we do this, this may help us to fill out some reports, including the 9 40 ones and the W twos and w three match everything up. Tie everything up as we prepare your in tax returns. But whatever week Ruthie's in as we're gonna have to go through their weaken, just double check them, sort these numbers out so that we can agree them to the year in documentations that we need to agree them to. Here. Let's take a look at the report. The payroll summary report. Now, by going to the reports, drop down, we're going to go to the employees and payroll. Take a look at the summary payroll report. Payroll summary report, payroll summary and then we'll change the date range once again. 2010118 to 12 31 18 This report given us our summary. We've got January through December 2000 and 18 similar to given us the gross payment, minus what would be deducted from it's similar to a paycheck stub in a vertical type fashion. Four hour two employees Anthony, Judy and then the total. We here are concerned with the total note that this report is being grouped by basically payroll items as we would see them on the paycheck and on the profit losses. It will be, of course, grouped in terms of accounts in this case, expense accounts. So within this report, we see I've just increased the font size a bit. So we've got the salary. We've got the hourly pay. We've got the hourly 60 overtime, that bonus That gives us the 3 32 33 34 If we compare that to the profit and loss, if we go back to the profit and loss, we're gonna say that's going to be the payroll expenses. So note not noticed that this ties out very nicely Now that we've adjusted these items broken out the payroll expense side and then broken out the benefits and the payroll taxes going back to the payroll summary, we then have the deductions from gross pay. Remember these air kind of the deductions that will affect the tax calculation? So that's the for a one K employer and the vision in our case. And then we have the taxes. These are gonna be coming out. Remember, these are going to be the employees e taxes, so they're included in payroll expense because they're really part of roast pay, even though for the net check, they will be coming out So we got federal with holdings, Medicare, Social Security, California withholding, disability and medical employment. Additional tax. Then we have the deductions from net pay. These were not affecting taxes, but still being something that we're taking out before we give the Nets check dental insurance, union and garnishment. And that gives the net check. So remember that when we compared this report to what's on the income statement, it really should tie out toothy gross check in terms of the expenses for the for the employees, this other stuff we took out of the gross check, but we're paying. It's still on behalf of the employees, just not to the employees e. We're paying it on behalf of the employees two mainly the government and whoever else we have to pay. Then down here we have the employee taxes and contributions These air, the employer items, the things that we have to pay over and above the gross pay. So these air not part of the girls, pay their their included over and above. And they include the things like the federal and employment Fouda, our portion employer portion Medicare, Social Security that suit a state unemployment. Our portion that matching porch of the 41 cabe the group term life insurance that were pain for the company's side. The health insurance company paid the H S A. This company paid health savings account the S Corporation medical in taxes and the employer training tax. That's gonna be the 27 7 37 56 And if we go back to our income statement and we add up these two items the benefits that we're gonna be worthy items that we changed for those benefits that were employer portion that being in the 11 to 35 the 16 502 that'll give us the 27 7 37 that 27 7 37 back to the payroll summary form is the 27 7 37 56 So you can see that breaking this out, we can break out our income accounts by changing those items. Tow line up more closely to these reports, which may help us to be more confident in the report ings at the end of the year going back to the profit and loss report. If we leave it in the default than all of this would be grouped in together as payroll expense. And if we wanted to have some a surety as to what has been broken out, we'd have to do just some or calculations outside of Excel, possibly toe break those items out and give us a more assurance that their reported properly. For example, if we want to tie these out to the W twos and the threes in the 9 40 ones, we we might have to break these out in different ways just to make sure that everything ties out properly. Also, if we want to tie them out to what we're gonna report on tax filings at the end of the year , we might have to break these out. Oftentimes, it's nice to break out the payroll taxes, which kind of properly should be broken out most of the time. To show that difference between what's going to be the employer taxes of, as opposed to the employees, E uh, income 90. 330 Setup Owner Payroll Expense Account: In this presentation, we will set up a separate payroll expense account one for the owner being able to break out the owner payroll expense from other payroll expense. The same principle can be used as we want to break out different regions, setting up payroll by region, possibly, or setting up payroll by activity, including sales versus administrative. We will make this change by adjusting an existing payroll item, adding a new expense account and assigning pay this payroll item to the new payroll account within QuickBooks and we are on the home page. We currently have the open windows open in order to open the open windows, go to the view, drop down and select the open windows list. We will open the payroll items by going to the lists dropped down, and we want to take a look at the payroll items list. That Pedro item list, typically when we set up payroll, will have items related to salary within payroll and hourly. Pales is gonna be the two main formats we can have. We can add a new salary and apply it to a different location in terms of the expense account. We are going to do it here by adjusting the current salary pay. We only have one employees who is a salaried employee. And therefore, we can just assign this item to that one employee who is the owner. If that were not the case, then we can add a new item payroll down here and add a new item, which would be a salary type item with a new accountant. We'll see how to adjust that account by going into this current salary item. So we're gonna double click on the salary item up top. It's gonna be a salary item. We're gonna change the name of it to salary owner. So now if we do have another employee that's gonna be salary basis, not hourly based. We want to note here that we don't want to pick up the salary owner. We want to make sure we have another salary account for that employees that we can break out into another type expense account. Then we're gonna say next and then the payroll expense. We want to break that out. We want to put it into another type of expense account and track it on our income statement . In a separate account, to do that, we're gonna select the drop down and add a new account, and we're just going to call that account payroll owner. So we're just gonna name it payroll for the owner. It's gonna be an expense type of account. We're gonna say save and close and the rest It should be the same. It's gonna be the payroll owner and finished. We do want to apply it all the way to the beginning. If this was in practice, we probably only would want to do this for a new time period or when we first set up the payroll. We want toe apply it to the first payroll in our example so we can see what the difference will be as we go to the income statement. So I'm gonna say, OK, then let's check out the profit and loss or income statement and see what happens. We're gonna go to the reports, drop down, we're gonna go to company and financial. Then we'll take a look at the profit and loss standard changing the dates from a 10118 to 12 31 18 That's January 1st, 2018 to December 31st 2000 and 18 we could see that we've broken out some of these expense accounts. Remember that by default all of these, which is goingto one expense account. But we can, by adjusting the items, adjust which expense accounts or how many expense accounts we want and how to group this information. And we now have broken out the payroll by the owner. So if we look at this item, it has now been broken out from the payroll expense. And this then if we double click on it will be the payroll for Judy Jones because that is our owner. If we click on any one of these, it'll go to the payroll checks and give us the check detail. So if I'm gonna close this back out, close this back out, you could see that this same principle can be applied to any type of way. We would like to group the papal if we have some region of the country, possibly are some different stores that we have. We might want to say these people are all within payroll for this location versus payroll for this location and set up different payroll items and different payroll accounts for that. Or if we had a sales in versus administrative, we may want to say that these are gonna be payroll items, payroll expense for the sales payroll for administrative. We may have cost a good sold or other other needs in which we would want to track that payroll by specific accounts. And in order to do so, we can just go to those lists the payroll items list, and we can adjust them so that we have the proper list to assigned those accounts to, Then go into the employees and make sure that they are pointing to the correct item. And let's take a look at that now for go to the Employees Center, employees dropped Down Employees Center. We're gonna go to Judy Jones, and if we go to Judy's payroll information now, shoot. Her item is salary owner. If we had to add another item for some different type of group, we just need to make sure that we have. We have the right set up at the type of item. It should be salary or hourly typically, and then make sure that when we set up the new people that are gonna be applied to that group, that we have their items going to that item list and that the expense account is set up properly. And then everything should run smoothly and run it to not just expense account, grouping them all together, but to their own assigned expensive pound driven by the items that we set up. 91. 10 Payroll Comp Problem Introduction: in this presentation, we will discuss the comprehensive problem goals of the comprehensive problem and components of the comprehensive problem. We will be working the payroll problem in Excel. This is going to be the Excel worksheet. We're gonna have a few tabs that we will be jumping back and forth through not too much jumping. We're gonna try to put it much on individual spreadsheet as possible, but there will be three taps to the problem. We've got the register and record. We got the G l tab and we've got the W two and W three. These three here are gonna be the answer tab. So we're gonna go through just the answer, seen this information all filled out. And then these three tabs are going to be where we can work the problems when we work the problem. We're gonna be in these three tabs, and we can always refer back to the answer key to see what has been input and how it's being input. The goal of this problem is to be comprehensive enough so that we can see multiple time periods that we will be going through. And we can also see the register as compared to the earnings records for individuals. We can also see that journal entries. I'm gonna go to the second tab, post the journal entries as we go see how that would be posted to a general ledger and see how the General Ledger can then be used to create the trial balance over here and eso. And then we also want to see the end of the time period problems, worksheets and information and tax reports, which include the W two in the W three. This is going to be a kind of a worksheet within excels that we can use formulas. Teoh, see this information for the W two in the W three. We'll also show the documents from irs dot gov the actual documents and we'll fill out the 9 40 ones with this information. These are gonna be the quarterly documents and the 9 41 B, which is gonna be our deposits, and then the 9 41 for a second quarter. We're gonna be doing the last 2/4 in a year with the assumption that we are starting a new company in the middle of the third quarter and then we'll be entering the data. And then we'll have to quarters of the year to record the 9 40 ones, a quarterly report and the related scheduled bees and then the year end 9 40 It's gonna be the 9 40 form in the year end, and then we'll have to show the W twos and the W three now because of W two and W three. Do not allow us to have a data input in the system. That's why in Excel, which worked out well because it actually is nice to use formulas. We have the W two in the Deputy three here in Excel, just like a mock data input form, so we can see how this gets put together. So that's gonna be a lot of jumping, of course, because we're going to try to go through an entire year of payroll because really, we can get into any component of payroll in order to do that in order to jump through the entire year and be able to tie out what happens on individual pay period To that quarterly's to the quarterly reports to the year in summary reports and the creation of the W two in the W three in the 9 40 Um, we're gonna We're gonna try not to get too complex so that we can have the ability to not get too bogged down in individual pay periods. Therefore, we've chosen toe have monthly pay periods rather than by we clear or semi monthly or weekly , which is probably not the most common type of pay period. But it will allow us to inter less data for a month and 1/2 worth 1/4 and 1/2 to 1.5 quarters or 2/4 worth of information without having too much Ah, detail in there so that we can see the big picture and see how everything ties together. So we'll enter data into the payroll register and will do that on a monthly basis. So each month will enter the data into the payroll register for our employees. We're gonna have four of them, and we're also gonna enter the data into the earnings record over here. And this is gonna be the record for each individual employee. And this will show it's not only what happened for that employees during a particular pay period, but this sum up to a particular date. So we're gonna be gone through August, September, October, November, new company starting in August and s so we can see the data for the all the, um, all the data for any individual employees. We'll also take the information. I'm gonna scroll back to the left from the payroll register to create the journal entries, so Well, then go to the second tab. I'm going to the second tab over here, and we're going into this information into the journal entries. Now, the journal entries Air one. From accounting standpoint, they're one of the most complex type of journal entries we have. You could see the journal trees quite long to enter this data into the journal entry, and we basically need two of them to record any payroll on that. Doesn't matter if we do that payroll in house or if we do it with 1/3 party that completes the paid role. We still need to record it into our system and be able to understand what's happening in the system, whether we use an automated system or a manual system, whether we use 1/3 party to do the payroll or not. So we've got to understand, from accounting standpoint this payroll journal entry 92. 20 Payroll Comp Problem August Payroll Register: in this presentation, we will inter date it into the payroll register for the first month of the payroll, which will be August for us or for more accounting information and accounting courses. Visit our website at accounting instruction dot info and say this is the first month that we have payroll in this company. We're gonna have the four employees were gonna be running this from August till the end of the year, just entering the first month of the operations into the payroll register here, we're gonna be operating on a monthly basis or payroll process is going to be run monthly. So we're gonna have this as of the month ended for August and calculate the payroll and related with holdings and what we're gonna Catholic within the payroll register when we consider that we're gonna have to first calculate what the earnings are, and then we're gonna have to calculate the deductions on those earnings. Then we'll get to the net pay, and then we'll talk about the employer taxes portion of this as well so we can see this. None of these calculations are very complex in and of themselves, but we have a lot of calculations here. To do this, we will have to maneuver a bit around the worksheet. So note that well, we can do that with the scroll bar down here. Or we can use the arrows in order to maneuver through the worksheet. So we're gonna start entering this data now, Some of this data we're just gonna give to you as part of the problem within the presentation here. So we're just gonna give some of the data that will be given and will perform the calculations that need to be performed. Well, try to tell you where this information would be coming from in practice as we go. So first we're gonna inter data for Anthony Amore. We're gonna go through this. This first information is gonna have to do with the filing status and the allowances that usually comes from the form w four. So if we go to the form w four, we typically will have the name. So when we first enter information into our system, wherever we enter the system information in Typically it would come from the W four where we would have the formal name, marital status and the number of allowances So that's what we'll have here and the Social Security number. So we're gonna enter that data here. We're gonna say that Anthony is married. We're gonna say having em in B five note were, in essence, gonna be entering information where there's blue areas. So there's gonna be an M in B five tab. We're going to see the number of allowances from the W four. It's four. So four allowances from the W four, then we're gonna have the regular pay hours. This is gonna be the number of hours we would need to calculate this somehow in practice, maybe we have a time clock calculating it where someone has to punch in and out of time clock and track the hours in some format. We're doing this on a monthly basis. Note here. So we're gonna say that any time we have a now early employees, we'll enter the number of hours here. If it's a salary employee will just say it's a salary employee here. So we're going to say this is an hourly employees and we're gonna put 1 61 hours for the month. Now note These are just regular hours, not overtime hours. And when we break those out between regular hours and overtime hours, what we're gonna have to do is ah is figure out what our overtime regulations are is over time, meaning after a 40 hour work week, or is over time gonna be something more stringent? Meaning federal over time typically is a 40 hour work week, which means we'd have to even though we're paying monthly, look at each week within the month and see if there's any overtime hours and then pull those out. Ah, and calculate those. So I'm not gonna We're not gonna do that here. We're just gonna tell you what the overtime hours are based on that information. So just know if it's a 40 hour week, that's what we would end up doing would have to calculate the hours for each week. Anything over 40 would then be overtime hours, as we've been calculate everything for the month, the time period that we're using in order to put the information into the earnings records . If, on the other hand, you're in a state that has more stringent rules, such as an eight hour workday, anything over eight hours would be over time and we have to calculate days as well to see if there's any days over over the eight hours, and that could come out to a different calculation for overtime. So this is gonna be the regular hours. Then we're gonna give the regular rate. This would be the rate that we agree upon within our our payment agreement. It's gonna be 25 here. Then we're going to calculate the regular pay, which, of course, now that we have the hours of 1 61 and the rate times the rate of 25 that would give us 4025. We will do that with a formula here. So we are in F five, where we will say equals point to the 161 hours, which is in D five times the $25 in E five. We want to use formulas as much as possible. I'm gonna select a tab and there's gonna give us our 4025. We're gonna try to put dollar signs wherever we're talking dollars, non dollar signs when we don't. When we're not talking dolls to give an indication of when we're talking about some other type of measurement other than in dollars. So then we're gonna go to the overtime hours and again, we're just gonna give the overtime hours. So based on our calculations, we're saying that the overtime hours is one that means total hours was 1 61 plus one or 1 62 Then we're gonna give the overtime rate. Overtime rate is typically calculated as time and 1/2. I mean, you can kind of think of it as a 50% raise. Meaning if you had $25 an hour times 250.5, another half, $12.120.5 plus the original 25 that would be 37.5. Or we calculate that as 25 times time and 1/2 or 100% 1 0.5, Another 50% if we move the decimal 500.2 places to the right, 150%. So that gives us the 37.5, so our overtime rate will put in a chaff. Five. We're going to do that with a formula equals the 25 times 1.5 and tam, Then we're gonna give our overtime pay, which will just be the one time 37.5. So in I five, we will say equals point to the one in G, five times 37.5 and h five and enter. That will give us the 37.5. Now. Obviously, we're We could have calculated that and just typed in 37.5 here. But we really want a formula. We want to standardize the worksheet. We wanna have it all uniform and use formulas as much as possible. Meaning this whole column should be symmetrical and have the same formula in it. Then the total earnings. We're gonna add up the regular pain and the overtime pay. So that's just gonna be the 4025 plus the 37 point point five. We will do that with a formula again. So in J five equals this 47 25 in F five. Plus this 37.5 in I five. That gives us our 4062. This is our total earnings now going from there, I'm going to scroll to the right a bit. What we're gonna dio is just use these earnings to complete the rest of the worksheet. Now what we're gonna do here is have a few more earnings columns, not calculating the tax. This isn't calculating the O A S t i or the Social Security, the food of federal unemployment tax and the suit a state unemployment thes air gonna be wages that will use to calculate they will be much the same in the first month of operations until we hit some of these caps. So the reason we need the second calculation of wages is because if, for example, the earnings for an individual goes over the cap of 1 28 400 which we'd have to check on their individual earnings records to see if it does, then these two numbers will differ. Otherwise, they'll be the same. Also note that these Social Security wages could change for Fike attacks, including Medicare and Social Security, to the total earnings if there's pretax deductions which could include a group insurance plan. If that group insurance plan was qualified as a cafeteria plan or a section 1 25 clams for the purposes of this example problem the group insurance that we will have here is going to be a post tax deduction. Not gonna be a pre tax deduction for our wages. That's going to come out of the calculation for net income. But it's not gonna be reducing the taxable income for federal income tax, Social Security or Medicare. So that will be the same for most employees throughout the entire time. But the food A has a cap of 7000. So after they hit 7000 then we don't calculate food to anymore. So we need to sew. These numbers will change, Not this pay period. What next paper in suta is a state tax we don't usually use Suta. We're not focusing on the state, I should say. But Suta is so closely related to food of the way the terminology of the law is that we're going to use it here. We're gonna have a slightly different cap. 8003 cap oftentimes will stimulate the food to cap or B somewhat similar in nature in terms of the calculation. So we're gonna say that there's an eight thousands suta cap. So for now, these are all be the same. So in k five, we're just going to say this equals 3 4060 to 50. No change, because the total earnings they haven't hit the cap. This is still under 7000. And it's the first payroll period. So it's so it's gonna be the same here as well. So l five is just gonna be equals the 4060 to 50. Same for the Suta. There's no change here, so this just equals the 4060 to 50. Now we'll calculate the O A S T I, which is Social Security is part of the fight attacks. As so remember, there's gonna be two components. O A S T eyes is an easy abbreviation for it. So that's often used on the abbreviation, probably most commonly called Social Security in terminology. So in order to do that, we want to make sure that we pick up the Social Security wages. Not that earnings here, even though it's the same now. But it won't be or possibly won't if any of the employees reach the cap amounts, we want to make sure to pick that up so we don't cause yourself problems in the future. So it's gonna be the one, uh, it's it's gonna be the 4060 50 times 500.0, 62 which is 6.2%. So 0.0, 60 If we move the decimal point over, so that's gonna be our calculation here. We'll do that with a formula in cell in five. So within in five, we're going to say equals, make sure we pick up the K five. It'll be the same as we pick it up here. But again, we want to make sure that we're in conformity. Don't cause this problems in the future. Times 50.62 Now we'll calculate H I with which is Medicare. So again, this is off unease E abbreviation. Sometimes it'll be m e d or h I. So it's part of a fight attacks. We're gonna pick up the total earnings here because there's no cap on Medicare. So there is a new ad attacks if it's above 200. But we're not gonna do with that here. 200,000. So we're just gonna take the total earnings since there is no cap. So we're gonna take the 4062.5 times 0.1451 point 45% 450.145 That gives us 2 58 90 I noticed that it won't be perfectly around it. That's just, you know what we have to deal with. We want around it to the nearest penny. So 58.91 when we calculate in Excel, of course, it will look like it's rounded to the nearest penny, but it's actually taken it out. When we do calculations with it, it will be taking the actual member. So we're going in 05 equals. We're gonna pick up the total earnings this time Times 0.145 and that will give us the 58 91. So here's what I mean by Excel picking up the total number. If I goto the home tab numbers and increase the decimals, it's really 58.906 on and on. But we're just gonna pick up the 9 58 91 If we use this cell to calculate its really using the actual number, not the rounded number we see now we're going to the federal income tax. Now. This is the most complex of the taxes because it's not a flat tax, as these two pretty much are So we have to basically use tables and we need to know the marital status. We need to know the number of ah, allowances. And we need to know how often the payroll is, which is the largest monthly. So I'm gonna scroll back over. We need them. In this case, this is where the marital status come to Nick play the number of allowances and the earnings or what we're gonna use. We're gonna go to the circular e to do this. So it'll be a simplified calculation. We'll go the circular. You have to look these up in the tables. So we're looking up withholding, So I'm going to start by going down to page 21 and then I'm just gonna scroll down this using the page down until we get to the table calculations here. And so they're gonna be two types of tables. One's gonna be the percentage method. That's the more complex table we want to use if possible. The, um just the table method. So we're gonna be down here now. When we look at the tables, we have to see that we get in the right pay period. This is a weekly pay period where Monthly. So we're gonna scroll down till we get to the monthly pay periods. That's weekly. When we got weekly, then we got weekly. We've got bi weekly, We've got bi weekly. We've got bi weekly, bi weekly and semi monthly, semi monthly and semi monthly. And finally, we should finally have monthly down here. We're jumping back over here to the papal register. Note that we're gonna be using the's numbers in orderto look up this information for the total earnings, which isn't entirely correct. It'll be a good example here, but just note that as we look this up that it should be the total earnings which is the 4062.5 minus the the 41 K If the 41 K is going to be a non tax item of pretax item which it typically is so minus the two or 3.13 and that's the number we should be looking up. So in our example, we're gonna be looking up these numbers so we get an idea of the table we're gonna run with those numbers because for the f i T. Because that's how the problem is set up, but just note that typically we would reduce it by the 401 k Also note that the group insurance, if it was a cafeteria plan, would then be deductible here, as well as with the OSD I wages and for Medicare. But we're going to say that this is not a cafeteria plan for this example, meaning it's not gonna be up pre tax deduction but a post tax deduction and know what the result would be if we basically over withheld. If we do it this way, we're gonna take this number instead of the lower number, which would have been the total with holdings minus the 401 K plan, which will result in US withholding mawr than we otherwise would, which would typically result when the employees do their there 10 40 at the end of the year , with the with holdings being too high and possibly having more of a refund at the end of the year. So typically this kind of will wash itself out in a way in that with holdings will be too high during the year and in that the end of the year, the refund after filling out the individual tax return. The 10 40 would typically be higher if if if an employee had the refund at the end of year or else the tax code would be lower. Now, this is monthly. This is single monthly single. We're looking for monthly married, so I'm gonna scroll down until we get to a monthly married table. And so here's monthly married. So here's our table. Now we're gonna have four allowances. So what we're gonna do is we're just gonna look at our total earnings, which is this 4060 to 50 and I'm scrolling back and forth here, but we're looking for this 4060 to 50 going back to our tables for your back to our tables . It's gonna give us a range. So we want to be in this column, that's number we're gonna pick up, and we're picking up a range of 4062. So it's gotta be between these two numbers. So if I scroll down all the way down, we start picking up 4000. So here we are, 4032 4070. So 4062 is in between there so I'm gonna scroll over to four allowances and that will give us this number of the 1 73 So that's what we'll use. That's how we're gonna use these tables. So we gotta make sure in order to use the tables, we just need to make sure that we're picking up the right table in terms of monthly, picking up the right tape on terms of marital status. And then we got to pick up the right column number and, ah, the wages within the wage range. So then, if we go back to our table, we're gonna go back to our cell over here, and we have to manually input this. Ah, one 73. Was it 1 73? I believed. Okay, so those are the taxes we're gonna deal with and we're not gonna do with state income taxes , they could defer. Some states won't have taxes. Some states will have different taxes in terms of s i t. It might follow the federal income tax. We're then gonna go to insurance as a voluntary type of deduction. And I'm just gonna give the insurance number so we can see what it is. Noticed These air mandatory. They're gonna come out of the paycheck. The insurance is going to be something that voluntary. We're gonna be participating in the insurance, but it's still going to come out of our wages. Also note that the insurance for the purposes of this problem will not be a section 1 25 cafeteria plan not be qualified for Section 1 25 cafeteria plan, which means it'll be a post tax deduction and not a pre tax deduction. So that means that it's not gonna be reducing total earnings when we calculate the federal income tax and the Social Security and Medicare taxes. So it's gonna be taken out of the paycheck post tax calculation. So the insurance, I'm just going to say that it is going to be for 1416 points. Undo that. Gonna be here. It's gonna be 1416.67 for insurance. Union dues were going to say that there's two employees that have union dues, and that's again something that we're just gonna have to pull out of the paycheck. And I'm gonna give the number here in our numbers. So whatever the union dues are, I'm gonna say they're $8 and in the 401 k plan or some type of retirement plan, this is gonna be the amount that it's gonna be withheld from the wages to get to the net paid to put into a retirement plan such as a 41 K plan. And I'm just gonna give the number here. This will very based on what the plan is and based on what the employee decides to withhold within the planet is voluntary. So we're gonna have to, 03 13 for this employee, and then we'll calculate the net pay. So this is gonna be the actual paycheck. So what we have here is our total earnings here will pick up this one. These are the same, but just this number and then everything that we took out a way. Stith I Medicare, Social Security, Federal income tax. If I t Group Insurance union and the retirement plan for a one K. So let's do that. We're going to say that we have 4062.5 minus the O a s t i 2 51 88 minus the 58.91 Medicare a child minus the F I. T. Federal income tax 1 73 minus group insurance 1416.67 minus union dues, $8 minus the 41 K 2 or three 0.13. That gives us the 1950 91. Now, there's a couple of ways we can do that with a formula here. We're gonna do a formula. We could say that this is gonna be equal to this number minus the sum of these. That's what we'll do next time. Right now, we're just gonna point and click to each of them. So we'll just say this equals the total earnings and J five minus. And I'm just going to say the O A S t I in in five minus the h I in 05 minus the f i t federal income tax in p five minus the group insurance and Q five minus the union dues in or five minus the 41 K plan in S five That will give us the 1950. This would be the actual net check. So, in other words, the employees earned 4060 to 50 in theory, again, if we had economic earnings without these with holdings, it might be different. But in theory, they earn 4060 to 50. We took out from their check for them to pay on their behalf. OSD. I'd Medicare, federal income tax insurance, union dues for one K to get to a net check that they'll actually receive of $1950.92. Now, we're gonna calculate the employee earnings because the employee error is gonna have to pay in match some of this information. So this O A S d I? This is only the employees half the employers gonna, in essence, pay the same amount for their half. So we're just gonna take the same calculation. I'll take this number. The OSD I wages times thesixties 0.2% or 0.62 equals the 406 to NK five times 50.6 to tab the h I is gonna be the same. We already have it here. We're gonna do it again for the employers. Half it's gonna equal. I'm gonna scroll all the way to that blue column. The total pain times point No 145 So the same number here and then we're having the photo. This is a purely employer tax notice. There was no food to here. It's on Lee, an employer half tax. So we're gonna pick up the employer times 0.6 So we're going to say this equals scrolling back. Teoh the total wages, Actually. Sorry. We're gonna go to the Fouda taxes the 4062 times 0.6 center. So if we saw that again, it's gonna be free fed a calculator. We're taking the food or wages. Which is this? 40 16.5 times 0.66 point 6%. That gives us 24 37 24 38 3 round sets in 2024 38. And then the suit, um, is gonna be our suta wages times 0.54 So this equals I scroll over to the suitor wages right here in M five times 0.54 and that'll give us our suit it. So this doesn't come out of a paycheck for the employees, but is something that the employer has to pay on behalf or because of payroll taxes. Okay, so you can see that's the calculation. So that's gonna be That's one papered and you can see the complexity none of the calculations in and of themselves or that complex. But when we put this whole thing together, it could look quite intimidated. So we're gonna do the same thing for the other two here. So we got Cindy Lewis. We're gonna say is married with four as well. Total hours. And this would be given from the W four. We're going to say that the hours regular hours or 1 58 versus over time of zero overtime hours her pay rate, which we would get from the agreement when we employed her, is that $28. And then if we multiply this out, I'm going to this a little bit faster. This time is gonna be the 1 58 times the $28 in F six. So this equals the 158 times $28 tab, and then the overtime rate we're going to calculate, even though she didn't have any overtime because we want to have some symmetric see in our excel sheets that it should be symmetrical in some way. So we're gonna calculate the rate anyway. So it's gonna be the 28 times time and 1/2 which is equal to the hourly rate, $28 times time and 1/2 or 100% 1000.5. Another 50% giving us 42.5 or 40 to 42 and then we're gonna calculate the overtime are gaining zero. She didn't work any overtime, but we're gonna We're gonna keep the calculation there. So if we wanted to copy these formulas across, it would be easy to do so. So I'm just gonna say this equals the zero hours times the $42 in the overtime rate that will give us, of course, zero. So then, with the total earnings again, you could just say it's only the 4 4026 I don't need to add the zero to it because that doesn't do anything. But we want Teoh for one note that if I copied this formula down, if we highlight and copy down, which will probably do later, it will do that for us and will pick up this cell so we want to make sure. Even if we don't need this cell, we pick it up so that if we copy something down, it's all symmetrical. We're gonna do the calculations straight through rather than copying and pasting formulas for a while at least. So in j six, we're going to say this equals this 4 4024 plus this zero tab. Now we're gonna get to those wages for away. SD I Social security wages for food, Federal unemployment. Fage is my wages for Suta state unemployment. They're all the same right now because no one has hit these caps yet, but they will next time. So we have to be in good practice to make sure that we're doing everything so that the system will be the same when these become relevant. So in K five, this just equals that's 4 4024 and l sixth is just equals the same 4 4024 for food in M sixth is just equals that same 4 4024 for suit. Then we'll go to the O A S D I calculation, and that's gonna be based on this wages. It's the same. But we want to make sure to pick up the right column times the Social Security or O A S T I rate of 6.6 point 2% or 20.62 So this equals the this calm in case six times 0.62 town. I know that this one then, is gonna be the Medicare or and that's going th eir Medicare. We're gonna pick up the total earnings because there's no cap. So we're just gonna be in 06 and say this equals point to the 4424 times 44240.145 and tam . Then we have the most complicated one. The F i t. I'm going to scroll back over. This is the federal income tax. We have to use the tables because of the progressive tax system. We don't have a flat tax. It would be nice and easy. We need to know the marital status. We need to know of a number of allowances. They pay period, which is monthly for us, and the amount which is gonna be this 4 4024 So I'm gonna go to our tables and we're in the right table. Married monthly. All we need to know is the pay amount, which is 4 4024 So 4430 4003. 92. 4004. 30 Here it is. And four allowances. Here's the four allowances and I lost where I was here. 4000 4 394,030 is gonna be this 216 at 216 right there. That's gonna be the amount that we're going to withhold that 216 for the F i T. I'm gonna go back to F I T. And obviously, if we had a system, the computer would be able to do that Look up table, which would be very nice. It's very nice to use, but it's It's important to note how complicated that can be for tax planning purposes. It's great when the computer will look it up for you but still makes problems when we have to tax plan on it. That's gonna be 216 group insurance. I'm just gonna give it's gonna be the 1416.67 that's gonna come out of a paycheck. The's air, These are voluntary benefits or that one is Union dues were going to say that she's another union worker. We're just gonna add that union worker and they're just note that that would have to be removed. And the 41 cake and I'm gonna give it We're not gonna get into the 41 k calculation. Just note this is the employer portion that is going into some type of retirement plan like a 41 K which is I'm just gonna say 4 40 to 40. So these air given and we would have to look those up based on one. The union agreement, the group insurance agreement and the 41 cave. Whatever was decided by the employer and the employee under the terms of the agreement. Then we got the net pay. Net pay is just going to be then the calculation of this right there this 4424 are total earnings minus what we withhold so security to 74.29 minus Medicare 64.16 minus federal income tax to 16 minus two group insurance 1416.67 minus the union dues, $8 minus the 41 K 4 42.4 gives us to 5 2049 Let's see if we did that correctly. We're gonna do that with a formula here and in the same calculation. This time I'm gonna pick up this number minus the sum of these numbers. And it's a bit nicer of a formula. It looks nicer, shorter released. This equals this 4 4024 and J six minus the sum. I'm going to double click this some function and pick up all the deductions. So then we're just picking up the O A S t i to the 41 k plan. And then we should close it up. No, I should close the black brackets with shift nine. If I don't do that and I just hit enter, it's OK, It's it kind of scary. It says that we messed up somehow, but all it saying is we found a typo. We're gonna close it up for you to say this is what you want. Like, yeah, that's what I want. And then we have the 2000 to 49. Then we'll calculate the employer portion Same calculations. But we're gonna match the O A S T. I matched the Medicare and then calculate Futa in suta, which are employer only taxes. So same calculation here in U six as the employee portion of Social Security is gonna equal the for 24 4 to 4 in ah K six times the 0.62 tab and then for the h I, we're gonna pick up the total wages of this equals. It's cruel to the right, just a little. That one is what we should pick up times when it's crow Peck over just a little bit. So it's J six times 60.145 Because if we move the decimal places to foot points over that, then food TEM notice we haven't seen food to over here. It's only an employer attacks. We're gonna pick up the photo wages, this number. But just make sure it's this column because this one will change for sure next time period times 3.64 point 6%. So this equals in the 4 4024 times 0.6 tam So there's food, um, and then sued him Is gonna were gonna pick up the suta wages, which has a cap of 1000 times 10000.54 or 5.4%. So this equals the suitor. Wages. Times 0.54 Enter. That's our 2 38 90 No, thieves don't affect the net pay, but are something that the employer has to pay. All right, let's do this two more times we got the next one is Jill Jackson. We're gonna say that Djilas is single one exemption her total. Her regular earnings are gonna be 170 for the month hours. Overtime hours are gonna be three. And once again, we're just giving those numbers. It would be based on either a 40 hour work week or an eight hour day, typically depending on the state. 40 hours being the regular red calculation for the Fed, which could then include some state, more stringent calculations. So then we're going to say that her rate is gonna be $31. Then we'll calculate her regular rate. So I'm just gonna take the 170 hours times 31. Note that this three hours might be a little not enough, depending on on the hours that were worked in a week. But we're gonna go with that for now because that's our calculation. But remember that we would have to calculate that on a 40 hour work week, break him out into a per week basis and see what was over 40 hours per week typically, So we'll multiply this out. We're gonna say this equals the 170 regular hours times T 31 hourly rate, and that will give us the 5270. Then we'll calculate our time and 1/2 rate our overtime rate, which will be the 31 regular times time and 1/2 or 1.5. So this equals 31 regular rate in E seven times 100.5 150%. That will give us the 46 50 Then the overtime pay then will be the three hours times of 46 50. So in I seven equals the three hours times 46 50 so g seven times H seven tab, then the total earnings are gonna be the regular pay plus the overtime pay. So in J seven equals the regular pain in F seven plus the overtime in I seven and there we have it. So now we're gonna bring this over to calculate our taxes on it. So we have the OSD I These are gonna be the wages again. So they're all the same this time because no one has hit our caps. So the 1st 1 is just gonna be equals. This is a way S t I still security wages, not the tax than the f I food m equals the same amount in J seven and then Suta equals the same amount. And so they're all the same right now. No, no change because no one's hit the cap it, and then we're gonna go to these Thea Social Security or O A S T I tax, which will be this number. The OSD I wages times 6.2% or 0.62 So, in in seven, we're gonna say this equals the 5004 09 times 0.62 and that will give us our 3 35 39 h I we're just going to use the total earnings. So we're gonna be in 07 equals 5004 09 50 times 500.145 tam. Then we're gonna go to the F I T. Where we will need our information once again. So we have the single one and the 5270 for a monthly, uh, pay period. So we're currently in monthly, but if married, so we're gonna scroll back up, two single. All right, so here we are in the singles, and we need the 5004 09 50. So we're in single 5000 and we're actually a little bit over its fight at the highest point of the table is 5004 05 So it's 5004 09 So we're going to use the table here because we're gonna use the percentage method next time. So I'm gonna pick up what we have here, so we're kind of going to use the table on this one, and so we're gonna pick up the highest number. There's one. So I believe that's in this column as far as the allowances, or here's the allowances. We're gonna pick up this 70 tubes, that's what We're going to use the 702 so we'll scroll back over here and we're gonna pick up the F I T. At 702 Next, we're gonna enter the rest of our information here. So we got the group insurance. I'm gonna give this information. It would be the voluntary deduction for the group insurance. And we are going to say that the group insurance is 1 1066.67 Ah, the union dues. There are none for this employee, not part of the union. 41 k is we're gonna say it's 3 78.67 That would depend on the elections. Five the employee and the employer plan that is available. Then we'll calculate the net pay. It's gonna be this number minus the sum of the deduction areas, all the taxes and the deductions. So we're gonna use the same formula, gonna type it in their note that we could copy this down now, but we want to practice this calculation. So we're gonna say this equals of this number J seven minus the sum s, um of all everything in the red. Here the deductions to the 41 K Don't worry about a blank cell. That's OK. And then we should shift nine. Close it up. So j seven minus the sum of brackets in seven colon s seven brackets and enter. Okay. And then we're gonna check, like the employer taxes. So we're in the employer taxes for Social Security or O A S T I in you seven. This will equal. We're gonna point to the O A S T I wages times 0.62 tab, and then we're in Medicare. We're going to the same thing here. We're gonna say this equals this time picking up total wages in J seven times. Scroll back over so we can see the percent, which is 0.145 or 1.45%. So 0.145 tab and then food. Um, where we're gonna pick up the photo wages. This one equals food him in l seven times, 0.6006 And if any of these, if I'm going too fast, the procedure is the same as the prior one. So we probably went a little slower there, So if you want to go through that or or actually go through this one? US. Lower, slow it down. But tab, then the suitor is going to be the suitor. Wages, which will be this item here, times the 0.54 So this equals schooling over to suit him here in M seven and seven times 0.54 And there's our suitor. All right, so there is this one. Now we're gonna this one more time. This one for Judy Jones were who were gonna basically say is the owner. So she's gonna be married. We're gonna have three. This is going to come from the W four. We're giving it here. No hourly rate. We're going to say she's a salaried employee and so that she not subject she's exempt from overtime calculations, and we're gonna give her a high wage because we want to get over this cap t to see what would be the implications. We won't get over the caps or some of the caps, at least so security. We want to get over the subsoil security cap to see what happens when we get to a later time periods. So we're going to say that her wages are 35,000 month. So 35,000 is her monthly rate here. And so we're going to say that Ah, the regular pay that I'm sorry. Just undid that I deleted that. I'm gonna put the 35. We don't need a regular rate. We're just going to say she gets paid salary of 35,000 in the regular pay. Now, there's no gonna be any overtime hours because she's a salaried employee, No overtime pay so that total earnings are nice and simple. For a salaried employee, it's just gonna be the same as or equal to the 35,000. Now, it is possible for someone to be salaried and still be a subject to overtime regulations. But typically, the salaried individuals will be higher paid and not subject to overtime calculations. And that's gonna be our assumption here. Then we're going to our same information This on this side, we're gonna say the O A S T I wages is the same because she didn't hit this cap yet. So this equals the same number, food toe. However, she completely clear the 7000 cap. So we're capping it at 7000. And that's the most confusing thing. You know, these caps are kind of confusing. So did she. Camps you got up to 7000 already. So we take the lower of the two or 7000. We could use a formula like an if then formula Teoh to logically calculate that exceed and excel. But I won't get into that right now. Just this is just the logic of payroll. Maybe we'll do one later. So then we got the 8000. She hit the 8000 which is lower than the 35. So we cap it at 8000 and in the Social Security we can calculate. Now, based on this 35,000. So Social Security equals that 35,000 times 0.62 Medicare equals a 35,000 total earnings Times 0.145 Then we have the f i t. Federal income tax. Now, we're gonna use the other tables to do this because this is gonna be complicated. It's too high for the tables. So I'm gonna go back, Teoh. We can't just use that the Mary tables because, as we saw last time, we should have gone with percentages because it's too high, her earnings are too high. So we need to go up to the percentage method. So I'm gonna scroll all the way up approach to use the page up. But until we get to the percentage method, I had to go through all of these to get back up to the percentage method. And this will be give us an idea of what these tables are actually doing. What are these tables actually calculating? So we're in the percentage method now and these this actually show us the tears on how this progressive tax system works. So here we've got ah payroll single for a quarterly. This is semi annual. We want monthly. So here we got weekly, we got weekly semi annual monthly. So we're monthly, she's married and three exemptions. So that means we're going to use the one on the right hand side. So marry if we read through this, it says if the amount of wages, after subtracting with holdings and allowances is not over. So this is like kind of a key term here after subtracting with holdings and allowances like , what is that? So in order to do this method. We have to go and find what they give us for the withholding and allowances. So if we screw up top, we'll see that information given here. So what we're looking is for the percentage method amount for withholding allowances. And we have, ah, monthly of the 3 45 80 So the 3 45 80 she has three, uh, allow 93. 30 Payroll Comp Problem August Earning Records: in this presentation, we will enter data for the earnings records 4 August. Now, in the last presentation, we did the payroll register, which gives us the information by employees per pay period. But we also need to track this information to sum up how much someone has earned during their time here. In other words, this will give us the information by employees on the payroll register for a particular pay period, which we need on the pay stub when we give someone a paycheck when could tell him Hey, this is how much you earned. This is how much we took out of it. There's your net pay, but we also need to know the year to date totals, which, of course, will be the same after the first pay period, but will differ later. In order to do that, we can't get that information from the payroll register. We have to use an earnings report, basically the same information. It's just gonna be formatted a bit differently. We put that over here, I'm scrolling to the right. So this is gonna be the earnings records now, the earnings records, Oftentimes I will have you know, the date on the social Security number and the name the allowances on it. We're gonna make everything simplified as possible just to line up Teoh the, um, earnings record to the payroll register so we can see this information in our main goal is really to see it s so that we can see what would be needed in order to fill out the pay stub. As we enter this data on and pay the paper, it's out. So what we're gonna do is just pull the same information into each employees. It's a similar worksheet. You could see the sub titles. They're gonna be much the same so that we can pull this over as easily as possible. What use formulas to do so? And what we're gonna do now is it's not breaking out by pay period. It's by the employee. So here's the employees. Here's the pay periods. August, September, October, November, December. All we have is August so far. Here's the next employee, Cindy. Here's the pay periods. Here's the next employees. Here's the pay periods. So we're just gonna Philip August for each employee. So if we scroll back up, we're just gonna basically pull this information over. So the filing status for Anthony. If I scroll back over, I'm just gonna pick up that same married filing status, Same number of allowances. So all these, they're gonna be, in essence, the same. So if I go back over here, I'm gonna do this with a formula. I'm in a B four. We're just going to say that this equals scroll all the way over and pick up that m for married in B five and Tam. So, in essence, it's a formula going to be five. Be five. Now, what we're gonna do is we're gonna pick up all the information for this month for this month for Anthony. Now, if I scroll back over, it's all in the same format. So we've got the allowances that regular hours that regular pay so we could highlight this whole thing and just copy it over. I'm gonna do it with a formula. So we're we've got the formula picking up this cell. If we copy it to the right, it should just pick up the cell to the right of it, and we should just be able to pick up each cell. So let's see if we can do that. I'm going to scroll back over and we're gonna put our cursor on this cell when it Right Click on it and copy. Right click and copy. Now, I'm not gonna auto fill it across because I don't want it to change the formatting of the cells. I just want to copy that formula is over. So it picks up the formula but doesn't change the formatting. So then we're gonna select from cell C four R A C four all the way over every. So, after that, going to net pay, let go. So here's our selected area. We're gonna left, click or right click on the selected area, and then we're gonna paste it. Not normal, because that'll paste both the formatting and the formulas. Not 123 because that will give us the values. If we use just the formats, then just the formulas, it should pull over the formulas and keep the format of the cells. So we want o paste the formulas and so you can see what it did here. We still have the the regular hours now not having a dollar sign having the dollar sign here, and having the sale centered. So that's that's what will, the way we will do this. So it gives us the same information. We just pulled it over. We don't get to see the formulas over here this way, but the formulas are already calculated in the register, and we could just We can just pull this information over now. The benefit here, of course, is that under on earnings records weaken give up the earnings for the time period. And we've given earnings year to date, which is the same right now. It will differ later. Okay, so then we're gonna do the same thing. We did that for Anthony. We're going to the same thing for Cindy. So Cindy, in August. So the first pay period for Cindy A be 11. We're just gonna say equals. I'm gonna scroll to the left and find her filing status, which is in B six B six, painter. So all we did is go to Cindy and pick up cell B six equals B six. And they were just gonna copy and paste something a right click and copy, right? Click and copy, and then select everything after that from C A C 11 all the way over to the net. Pay right. Click and paste it with the formulas. Just the formulas. And there we have that information. So we'll do the same thing. Note the totals will be down here for for Jill, same information will be in a B 18 equals. Gonna scroll to the left scroll back up. We're gonna pick up. That s single for Jill. And then we're going to say, if we double click on that we picked up equals B seven. That's to sell. Going to, right. Click on it. Copy it. And then we're gonna put in a C 18 all the way over to 80 18 right? Click and paste. Just the formulas. Then we'll do the same thing for Judy. Last one were an A B 25 August for Judy Jones equals I'm gonna screw all the way to the left all the way up. Pick up the married status related to Judy on the payroll, register and enter. And then I'm gonna copy and paste that all the way across. We're gonna perk Earth, run a B 25 right click and copy, but our cursor on a C 25 all the way to the end. Right click and we're gonna go to paste 123 Alright, I'm sorry. Paste formulas only pays to formulas only, and there we have that. So if we if we were to sum this up, we could get a check figure than if we were to add all this up. So if we go down to our totals down here, I'm just going to sum up for all of our employees and see if that kind of matches what is over here. I'm gonna scroll to the left school to the right. So we have our totals down here. We could match that out right now, and that could give us kind of a check that this is in their correctly. So if we scroll back down, for example, if we go Teoh the third quarter totals, um, I was going to go total for the year, which is gonna equal my screw up everything that we have so far for Anthony. Plus everything we have for Cindy plus everything we have for Jill plus everything we have for Judy Jones. So there we have it. The formula is, uh, a F nine plus a F 16 plus a F 23 plus a F 30 comes after 48 7 19 If we scroll back over up here, we get 48 7 19 for regular pay. So let's do that all the way across and we can kind of double check some of our numbers. I'm going to scroll back down now. The formula is gonna be relative the same if we copy it for copy and paste it so And if I copy this formula here, it will pick up the same sales relative, meaning it will pick up the cell, the cell and so on. So what we'll do is all right. Click here a copy and then I'm gonna put the same calculation all the way across down here from here all the way over. Let go. We're going to right, click and paste. And we could just paste the formulas again. It shouldn't really matter. Their old dollar amounts this time, but well paced the formulas. I'm gonna make these cells a little bit larger, and then we'll double check the main. Here's the 48 8 90 for the total earnings and notice Suta earnings, Um, are the same, but the food is less sofrito earnings are 20,000 8 96 So if we scroll back over double, check that here. Total earnings 48 8 96 And the Fouda 8 20,096 So that looks pretty good if we look, if we look at our net, check for it up for everything. Kind of like the bottom line member 28 to 66 11 over here on the register. And if we scroll back over here on the earnings record for everyone 28 to 66. So that doesn't give us a little bit of a check and note. We have to do this, of course, once again. So that this information for the totals each employee can be summed up and be on the people pay stubs and reported, Whereas if we look at the register, we have only one pay period of information per employee per pay period. So we had to sum that up just a little bit opposite here. We got the pay periods and then the employees and the payroll register. Over here, we have the employees and then the pay periods, just kind of reversing that ordering to get the summary data 94. 40 Payroll Comp Problem August Journal Entry Payroll Expense: in this presentation, we're gonna take the information from the papal register for the first pay period of August and enter that into a journal entry to enter it into our accounting system. So we're gonna create a journal entry from this payroll register, there's gonna be a really important process and something that may not be concentrated as much on in some people classes. But from an accounting standpoint from debits and credits really important journal entry to look at. And it's one of the longer and more complex journal entries to look at, whether we do payroll in house or whether we do it externally. We still need to do something like this in order to get this information into our system. So it's really useful to know. So to do that, we're gonna go to the next tab, this Geo tab and the G L tabs. Gonna have a few different data input these air, the journal entry areas. I've left them all in hidden. We're gonna hide some of them just to note that we're gonna have one set of journal general journals for each new pay period, and that will make it a little bit easier so that we can see things side by side. But to do that, we're gonna have to hide some sales. So we'll inter things into the general Journal are journal entry from the payroll register , things that go into the information from the payroll registered to the general journal. And then we'll post that to the general ledger over here, and then the General Ledger will generate trial balance. And this will give you just a little worksheet to show you the beginning numbers at the start of this process and what's happening as we go. So to do this first, I'm gonna scroll back over here. I'm gonna go all the way to the left, and I want to pick up these numbers here. So we're gonna say this happened in August and we're gonna enter the data at the first day of the next month. So 91 here. So from toe, hide all this information because we don't need it right now. I just want to get it out of the way. Now we're gonna put our cursor right on this f so you can see the drop down left click, highlight all the way over until a C. So the whole columns air highlighted, not just the segment. And then we left left cake or their selected Ah, right. Click and hide. We're gonna go to this hide area down here, and then you can see it was a B C D and then a d. So it went all the way across. So that's what we're gonna happen now we can see this first set of journal entries right next to where we're gonna post this stuff. All right, so we're gonna make a journal entry now. Now, the most basic type of payroll journal entry. If we were just to agree to pay, someone would be just like any other expenses would be very easy. We say we're gonna credit cash. We're gonna reduce cash. And the other side would be a debit to payroll expense, salaries and wages expense in this case. But because we have to withhold all the sense stuff, it becomes much more complicated. So we're just gonna pick this information up from the payroll register so we can start with that wages expense, Just like you would think we're well. First, you might think is cash affected. The cash is affected. Cash is going down. But typically in this particular the payroll journal entry, think of the cash last because it's kind of like calculating the net check. So it's gonna be a credit, and I'll actually put that in the final component. But if you're used to doing cash first, like I normally teach to think of cash first you could put it up top and know that it's gonna be a credit and start there. But I'm actually gonna reverse that process here to try to calculate this as if it was calculating the net check. So we're gonna start off with, um, the wages, expense expenses have a debit balance. We're gonna do the same thing to it. We're gonna debit the expense. So I'm gonna highlight these cells. I'm gonna copy this and make this a little bit larger so you can see it so we'll highlight these will copy it and then we'll scroll back up. Now we have the account numbers here. It's just so you can see the account numbers, right? Click and we're gonna paste it. 123 Just the numbers. And then we gotta pick up the debit amount. So I'm gonna do this with the formula and actually go from Tab Tab with a formula. So we're in d five, I'm going to say equals. And then I'm just gonna go down here to the Prior tab, and we're gonna pick up the growth pay for the entire payroll. Now, we're not gonna record this. We could record this person by person. We're gonna record the gross for all for all payroll time periods here. So there's gonna be a 48 8 68 8 48,096 So there we have that, and then we're gonna have the credits, and the credits are gonna be what we're gonna pull out. So, in essence, if we go back to the earnings record, we can see that everything that we're gonna pull out over here the deductions from the Total Column are gonna be the credits. And they're all gonna be pretty much liability accounts because we took this money from the employees and we owe it. Teoh somebody typically the government. So if we scroll back over here, we're gonna look for these liabilities. Now if we go down, not accounts payable, not payroll taxes payable. These are a liability accounts and orange And no, just that this trial bounces in balance because the debits are gonna be non bracketed. The credits will be bracketed. So we don't have two columns here, the creditor bracket or negative numbers and excel. And if we highlight the whole thing that debits minds, the credits, if we sum them up, will be zero, meaning that the debits equal the credits. Current income. It's 500,000 income, not a loss, because it's a credit. Okay, so these are liabilities, and we have obviously just limited the account so we can focus in on where we want to see this. We want to be able to post things to a trial balance that we can actually see what is happening from an accounting standpoint, Teoh the general to the trial balance to the accounts. So the payroll payable. We're actually not gonna use that here. We're gonna use that in the adjusting process. I'm gonna go ahead and just pay it as if we're gonna pay it at the same time. We process payroll, which may not happen all the time. A lot of books will take it to the payroll payable first, but I'm gonna save that till to do the adjusting journal entry. So this is gonna be used if we need to do in adjusting journal entry eso That's un price, simplifying it a little bit here. And then we're gonna have the Viking taxes payable. So that's something that we withheld. Fight for away SD I the, uh, Medicare h I Something that we withheld. So we need these two. These two are gonna be liabilities that will pick up. So I'm gonna highlight both of them. Right? Click and copy. Scroll back up. Put that in. B six, Right Click and paste. 123 Now, these are gonna be credits because they're gonna be increasing a liability account. So we're gonna pick these up now. I'm gonna I'm gonna pick this number up from the register earnings, but I want to flip the sign. So instead of hitting equals, I'm going to say negative and then go to the register and we're gonna pick up the O A S T I right there and enter, and that's going to give us the 3031. Then we'll put our cursor in e seven once again will say negative go into the register and picking up the h I the 708 99 and enter. And that gives us the 708 99 4 h i. Now, if we keep going, we have food A in suta. But those don't come out of the paycheck. Those air those air payroll for the employer. So we're not going to do those yet. We will return to them once we do. The second journal entry will have to do it related to payroll taxes. What we do have f i t. We had to pull out group insurance, union dues retirement plan. These are all things that we took out of the employees check. And they're all liabilities that we owe to somebody. We don't get to keep the money. So we're going to right click and copy, and we're gonna put that up top and right, click and paste. 123 and then we'll just pick up these amounts to Well, just the next one is F I t federal income tax. I'm just gonna say, negative going back to the register, and we're just gonna pick up that F i t 5 8099 The next one is group insurance. We're just going to say negative, go back to the register and pick up the group insurance. 5500 into than union dues were just gonna say negative. Go back to the register the 16 and enter the retirement plan. I'm just gonna say negative, go back to the retirement plan and in 7 2074 and enter. So there we have that. And then the difference then is gonna be the net pain you could see. This just mirrors what we have here. We got the debits minus all the credits will give us our net in that mirrors. If we go back to the register, what we have here, which would be the total wages here minus all of the deductions, should give us our net pay. So this is the net pay we're looking to get to. So let's see if that happens. Should be a 26 to 66 11 net pay. That's the cash we're gonna pay. Now again, I'm going to say that the cash is actually gonna get paid at this time that might be a bit of a simplification. Also note that we could it would be best practice, really To put this first into another checking account for just for payroll and then take it out of that payroll, I count. So I'm going to simplify this a bit so that we have a less fuel s journal entries to deal with. So a couple added steps might be too, you know, take the money out of the checking account, put it into another checking account specifically for payroll, then pay everything out of the payroll account and thereby you're able to kind of a double checked by the bank that just deals with payroll when they issue the payroll checks. But again, we're just gonna take it out of here to the limit. The this problem a little bit. It's a long problem already. So we're gonna say, copy the cash. This is the cash. It's gonna go out. We're gonna put that in B 12 right? Click and paste. 123 and then we'll subtract this out. So it's the debits minus all the credits or this minus all these. So this is 20,006. 29 89 minus 2 48 8 to 96. I'm gonna do that with our negative some or plug formulas. I call it negative. Some double click the some function Highlight the 48 8 96 down to the 7 2074 20 And that gave us that 28 to 66 11. If we go back to the register, that should match our amount here for the net pay. So now let's record this out. And then we'll do the second component of this, which is going to be Teoh. Record the employer portion. Now, to record this, we might want to freeze the pains. So let's try to do that. I'm gonna put my cursor on this side. I'll just put it right here on a D. And when I go to the right, I want to keep this pain here so I can see it. So I'm gonna go here. We're gonna go to freeze panes, scroll down to freeze panes. Now, we should have frozen pain. So we're gonna scroll to the right to our general journal, General Ledger and we're looking for him in school backup. We're looking for this one first. So this is 502 in the salaries. If we go down here, its its assets liabilities and then equity and income expense. We're looking for the salaries, which is our second expenses. Way down here, it's gonna be the same order on the G o. So here's our asset accounts and green liabilities and orange, and then we have the capital and the income and expenses were looking for the salaries and wages. So that's right here. And so here we have it. Now the date is gonna be 91 and we're gonna put it into this tab now. Know the debits and credits are in the same column. Credits will be with a negative number. All we have to do is just pick this number up. We don't need any pluses or minuses here. Will pick up whatever the plus and minus over here. If it's a positive, it'll be a debit. If it's if it's a negative, it'll be a credit. So we just need on this side just to say equals and we're gonna point Teoh this d five. They will bring the zero up by d five up by the 48 8 96 to 48 8 96 Now we'll do the same thing for the f i t. So if I school back over here and I just go over just a bit, it will pop back over there and the f i t. That we need to post here it is on the journal entry. This is like, this is like a for away, and here it is. So it's like our third liability. It's gonna be the same order on the G L So we're looking for that third liability. Here's our assets and the liabilities. So here's the fight got away. FBI, that's to 15. That's gonna be the same date. Uh, nine One is our date, and then the amount is gonna be here in a t. We're going to say equals and point to that 3031 55 enter and that'll bring our totals up. We scroll back over. That total note should be here. It shows up here as well. So here's the 3032 it's rounding here. So we took the panties off, in other words, and then the other side was down here. Here's the wages. Okay. And then now we're gonna do the H I. So here's the H I to 25. Scroll back over a bit. We got the to 20 here. That's we're gonna posted fourth liability account. If I scroll to the right, we have assets. We have liabilities. We're looking for the H I. So here it is. So it's in Ah, a w six. I'm gonna say 91 And then in a x six, we will say equals and then point to that 708 99 in e seven and enter. So there it is. On account to 20. Has that 708 99. If I scroll right back over on this side and go to the right just a little, then there it is. 709 We can see we're out of balance here because we haven't completed this yet, so we'll keep going here. We got the f i T, which is the to 25. So that's gonna be here. So it's like in the middle of all of our liabilities air slightly towards the end. So if we scroll back over to the GL, we ever assets are liabilities. Were looking for accounts at 2 25 So here's to 24. So to 25 is right there. So it's in. So be six. We're gonna say the date is 91 and then in b F six, we will say equals and point to that 5 8099 13 enter brings the balance up to 8005. 99 13. If I put my cursor right on the other side of this frozen pain, go right then we'll see that information here. Um, the f i t bringing up the f i T. Okay, so then the next one is gonna be the group insurance the to 43. Here's to 43 on the trial balance. Same ordering on the G O assets liabilities. And there's Ah, 2 43 over here. 2 43 We're gonna be in cell B E 21 91 tab and then in b F 21. We're going to say equals scroll back up and we're gonna point Teoh that Ah, to 43. That 5005 100 and a penny. So there it is. And then if we scroll right on the right side of our frozen pains and go to the right or the left hand side of the crows, frozen pains and then go over right there it is. Our group insurance. Next one, the union Dues to 45. That's gonna be the next one down to 45. So if we scroll back over into our general ledger, we're looking for 2 45 So there's 2 44 to 45. Must be up here then. Ah, there's the to actually over here to 45. That's gonna be on 91 date and then in Apsell, BJ six equals We're gonna go toothy union dues 16 bringing the amount up from zero by 16 to 16. Then if we put occurs her right on the left side of the frozen pain and school, right, and then go down. There's are 16. Next to retirement plan to 47 to 47. Last liability account strolling to the right to the last liability account. We're gonna pick up the retirement plan. Here's the to 47 school down a bit. We're gonna be in B I 2191 tam and then in B J 21 equals. We're gonna pointed to that 7 2074 20 and enter that. If we scroll back over, I'm gonna put my cursor on the left hand on the left hand side of the frozen pains and go right. And then there's a retirement plan entry. Then we're gonna go to the checking account. That's gonna be our first account of top. Here's our checking account. First account on the general ledger. So here it is. It's gonna be the date 91 And the amount in a L six will equal and pointing to that 28 to 66 11 bringing the balance down to 5 71 7 33 89 That amount matching here. Except we took the pennies off. And then if we scroll back down, we should be back in balance. So we're back in the zeros, meaning that dead that's minus the credits equals zero. Meaning that debits equal the credits. We see that net income went down by 48,000 uh, 8 96 here from 500,000 to 4 51 104 Now notes that we have this all went to expenses. So the expense of salaries and wages, not payroll tax expenses. Because even though we withheld ah lot of payroll taxes, these are the employees payroll tax. So the expense to us is really the wages expense, not payroll tax expense. When we record this, and that's really a key that people get confused all the time. So notes that although we withheld payroll taxes and we owe payroll taxes, if this side of the journal entry are not our payroll taxes there, the employees payroll taxes and to us, they're just payroll expense. 95. 50 Payroll Comp Problem August Journal Entry Payroll Taxes: Now we're gonna record our payroll taxes, which is our portion of the of the Social Security, our portion of Medicare, our portion, or we'll have the whole portion of food and Suta. So that's gonna be our second journal entry working at the put together here. And that's gonna be I'm gonna skip a line and we'll put put that on the next journal entry down here. I should froze it up a bit over so we can put a date here, so we'll have to unfreeze and put a date here. But I'm gonna skip a line, and we're gonna start this journal entry on another line. Okay? So that the next transaction is that we're gonna have our expense portion. So this is gonna be our portion worthy. I'm assuming we're that owners that were taking the perspective of where the owners in this problem. So that means that we're gonna have to pay our portion of Fike attacks is security and Medicare and the Food of Taxes on, and we're gonna have to record the expense related to its. I'll start with the expense down here, so payroll tax expense is gonna go up. Someone highlight these two in a red quick and copy. That's gonna be our debit. So we'll put that on top. So in B 14 right Click and paste. 123 No, I'm not gonna put the amount right now because I'm gonna calculate the debit after we put in all the credits, which will be all the office stuff we owe. So we process payroll and we owe I'm just gonna copy these fight again. So we have to do this again. We have it up here. But this is our portion now, fi ca Ah, for away FBI h I've So security and Medicare photo. Federal unemployment tax suit, State unemployment tax act. That's why I haven't had a on it. But then we're gonna copy those right click, and that's gonna be our credit. So we're gonna put that in B 15 right? Click and paste. 123 And so we're gonna start here. And I was gonna pull these from our register again from our worksheet, So I'm gonna start with the liabilities. This is what we owe. So I'm gonna put it as a credit, not hitting equal but negative going back to our register and that's gonna be all the way to the end in this yellow area. So we're gonna pick up the O A S T I, which does match. It's the same. But we want to pick it up from, you know, this part of our register and then the Medicare negative going back over to this item the h I enter and then negative of the Fouda going back over to the register. That's gonna be the fota 1 25 38 enter and in the Suta Negative. Going back over to the register, picking up the 8 67 56 enter. So there's that information and then the some of that will be the expense. If we add those up for set 7 4033 48 I'm gonna do that with the negative some formula. So we'll be in D 14 Negative s, um, double click the sun. Now, if this is in the way, you you can move it out of the way. Just just moving here, and then I'm gonna highlight the whole thing and enter. So then the debits equal the credits here, so it sums up to zero all right, So now we'll post this. So here's the 520 way down here. 520. Same order on the general Ledger. Somebody's gonna go to the right. Here's our assets and green liabilities. And then we have the Landy here. The income and expense Over here. So here is our wages expense. We're gonna be up here in the payroll tax expense. This is in 91 again. So we are in B R. Six p r six equals scrolling down just a bit. We're picking up that 7 4033 48 And there it is. If we scroll back over Teoh the trial balance, it will have increased the taxes here. So here it is, starting at zero. Up to the 4007. 33. Now we're gonna point post the O A S T I. That's gonna be up here third liability scroll into the right to find it. Here's our assets. Here's our liabilities. Were looking for the O A S T I. So it's here and nine one. So we're in 18 7 equals and we're gonna point to that 3031 55. It's gonna be the same looks the same as the one above it. Employees portion employer portion. So it's both coming going into our liability account. But once the employee wants the employer portion gonna scroll back over now, we need to pick up the H. I hear it is here. Here it is, on the trial balance. It's gonna be in the same order on the general ledger scrolling to the right, looking for H I. So here it is. 220. So, in a w seven, we're going to say this is 91 in a X seven. This equals and we're gonna scroll down just a bit. There's are a chai's 708 99 and enter so I can double up here. There's the some 1004 17 strolling back over. We can see that that sum here is here. And that, of course, is adding up to the total. Then we have the food. Um, so that's the to 23. So if we scroll back over, here's Fouda to 23. So it's like the middle accounts. Same order on the general ledger scrolling tofu. Tha we're looking for 2 23 uh, to 22 23 years is so we are in a B A six. We're gonna say 91 And then in BB six, we're going to say equals scroll down and pointed to the fota 1 25 38 enter. So there's through TEM 1 25 38 I'm gonna put my cursor back on the left side and go to the right. Just a tab and then there's Fruita. Then we're gonna go to Suta 20 to 24. Here's to 24 on trial balance Scrolling to the right. Here's our assets. Here's our liabilities. Scroll Back up a bit. We're looking for to 24 So scroll down a little bit. Here it is on be a 20. So this is gonna be 91 and BB 20. We're gonna say this equals and point to that heat 67 56 in e 18 and enter. So there's our 8 67 56 If we put our crusher to the left of the frozen pain, then go to the right. We should see that information here. So here's food. Here's suitor, and that puts us back in balance here And here's our journal entry. Ah, going from the salaries are going up going up and then the payroll portion of it. So there are two journal entries. 96. 60 Payroll Comp Problem August Journal Entry To Pay Payroll Taxes: we're gonna post one Mawr journal entry here. And this wouldn't We're gonna say it's happening in the middle of the month. Meaning we're gonna then pay all this stuff at some point in time. And that's gonna be the next transaction we're gonna have. So this one's gonna be happening on 9 15 Meaning we process the payroll on 91 for the month ended August at the end of August, Uh, and then we're gonna have to pay it, So we're gonna keep jumping forward in time here. We're going to say we have to pay it basically by the middle of the month. So now all this stuff that we owe that we that we took from the employees and that we owe is our payroll taxes. We have to pay to somebody, and we're basically just gonna be dealing with the payroll taxes here. So we're gonna be dealing with these items that we're gonna have to pay out. So we'll show that information well paid with, of course, cash. So I'm gonna do the cash last cause I want to put it on the bottom. So again, if we were to do this, your country it? We're gonna say, Is cash affected? Yeah, and it's gonna be the but we're gonna put the cash on the bottom. So we're gonna credit cash and we're gonna debit all these accounts that were gonna pay when we pay the government. When we paid the government for the federal government for ah So security and Medicare and Food A And in the state government for Suta. So we're just gonna copy all these now gonna highlight all these right? Click and copy. We're gonna go to sell B 20 right click and paste. 123 and then we're just going to pay these out. So whatever's in there right now, we're gonna pay out. So there's the six. 063 It's a debit. It's a credit here. We're gonna pay it. So we're gonna debit it to make it go down to zero, then the 1418 here for a chai than the 1 25 and then the 8 68 So we're gonna pay these out , and then we're gonna pay that. Of course, with cash. Cash is a debit balance. We're gonna make it go down doing the opposite thing to it a credit. So I'm gonna highlight the cash. Right click and copy. We're gonna scroll back down Teoh B 24 right Click and paste. 123 And it just add these up adds up to 8004. 74. I'm gonna do that with our negative. Some function is gonna be the negative s, um, double click the some highlight from 6063 down to eight, sixties eight and enter. So now the debits equal the credits, and there we have it. So we're gonna post this out, and this will bring these all back down to zero. So we've recorded the pat fact that we owe the liability. Now we're gonna pay the liability with cash. So here's our to 15. Here it is on the trial balance when it's rolled back over and find 2 15 in the general ledger. So here it is on the Geo. This is gonna be on 9 15 now, and we're going to say that this equals in 88 equals. That's 6063 enter. So that brings it back down. Well, we're missing 10 cents, and that's because I can't see the tense hints on the trial balance that we should probably add. Penny's here so we can see that I want to go ahead and do that for someone. Highlight these. Go to the home tab and we'll add this sense. That means we're going to widen it out just a little bit. So there we go. So they were. So now we're gonna see the pennies. So let's re enter these numbers and bring out the make sure we get pennies in there because we do want to be more exact with the payroll. So this is going to be 0.1, and that will take care of it. It went down to zero now, and this is gonna be 14. 18 0.98 This is gonna be 1 25.38 This is gonna be 8 68 8 67 0.56 And then this number should take care of itself, because it's just highlighting. If we used that plug formula, okay, then we'll get to the to 20 years that to 20. Now, this formula all it already picked it up. So it went back down to zero here because, uh, we used the formulas. So now we're gonna go to the to 20 count to 20 years to 20 in the trial balance. Same order on the general Ledger scrolling back over, going back up. It's what? One back over. Here's to 20. It's gonna be on 9 15 were in a x l A x eight equals when it scrolled out, back down just a bit and take up that 14 18 98 and enter and it's off by dollar. Gonna undo that. It should be 14 17 98. So I'm gonna double quick on this. It should be 14 17 98 Scroll back up stairs one more time. So a X So this, By the way, of course, thes should be there. When you when you work the problem, it will have the pennies so you won't have to suffer through this. Hopefully, maybe we'll edit this out but anyways equals the 14 17 98 enter. That brings us down to zero. I'm gonna put my curse on the left side of the of the frozen pains. Go right. And so that's down to zero now. Now we're going to the Fruita. So here's the fruit 2 23 Here it is. On the trial balance, we're going to school to the right, looking for 2 23 throwing back up, looking for to 23 school into the right, looking for to 23. It's and be a seven. This is gonna be 9 15 and then in BB seven, we're going to say equals scroll back down and we'll pick up that, uh, to 1 25 38 bringing us back to zero. Gonna put my crystal right on the left side of the frozen pains and scroll. Right. So it'll go back over there and there's back down the zero. One more. We got Sita. What? To more Suta. And that's gonna be Sita is here, and so it's gonna be in the same order on the trial balance will scroll to the right, looking for suitable. So here it is, 2 24 So, men, be a 21 Selby a 21 9 15 We're just going to say, in B B 21 equals and point to that 8 67 56 bringing us back down to zero. Then we'll put a cursor on the left side of the frozen pains and go right. And so we brought that back down to zero. So all of our payments air down to zero, except for the f I team, which we also need to pay. So I'm actually gonna adjust our formula and include F i t. Here. So I'm gonna move the cash down. I'm just gonna delete it in the highlight these delete that, and then the f i t. We we also have to pay, So I'm gonna highlight the f i t. Right click and copy. We'll put that on the bottom. Right click and pieced. 123 and the amount there is gonna be, Ah, 8599.13 Then we'll go to cash. So it's going back up. Cash will be credited. Right? Click and copy. Scroll back down. Put that in B 25 right Click and paste. 123 Then if we highlight this, it's gonna add up to 17,073 15 cents. We're gonna do that with the negative some the plug formula. Negative. That's, um, in double quick. Highlight the information or select information, and that adds up to 17. 73 15 if we add the whole thing up. Sums up to zero. Okay, so now we're at the to 25 to 25 is here. 2 25 is here on the trial balance for go to the right. We're looking forward on the General ledger now, Looking for accounts to 25. We'll scroll back up. There it is. So in B E seven, we're gonna say 9 15 in B F seven equals scrolling back down. We're gonna pick up that 5 8099 13 and enter, so that brings F I t back down to zero. If we go to the left of the frozen pains, stroll right and scroll down. Okay, so now we've paid that off. Now, we're not gonna go with the group insurance and the union dues. We would have to pay that out somewhere that the retirement contributions will. We won't get into. Obviously, we gotta have a fund for the retirement contributions. Will won't get into how toe account for the for the retirement contributions here. We're just gonna note that those are gonna be withheld and obviously are due on behalf of the employees as something that was withheld from employee paycheck. We're basically gonna be focusing in here on the payroll taxes. Okay, so now we're just post the cash out here is cash. Here's cash up top first account on the general ledger. So we're in a K 79 15 and then in a l seven equals scrolling down, picking up that 17,073 and enter. And that brings cash down. Okay, so if we scroll back at back over, then we should be back in balance. So the green zeroes put us back in balance and note that this journal entry doesn't affect net income. There's no income statement accounts, no income, no expenses. Their payrolls. All we did was pay off the, uh, liabilities. We owe these payable accounts payroll payable accounts, acting just as accounts payable. Does meaning. They went up when we owed the money. When we process the payroll and hadn't abated, then we paid it. They went down when they went up. So did the related expenses of salaries and wages, expense and payroll tax expense. And then when we paid it off, nothing happened to the income statement. We just paid off the liability and decreased the cash account 97. 70 Payroll Comp Problem September Payroll Register: in this presentation, we will continue on with our comprehensive problem for the payroll register going to our second pay period that being September, we have our first pay period here of August. We're going to continue with that information for September. Note that we don't have another header line down here before the September David input sheet. What we're gonna do is we're just gonna freeze the pain, which is gonna be an excel to kind of trick technique that we're gonna use, and that's gonna make it. So this sells above this line will stay the same. Now, Before doing that, I'm going to scroll all the way to the left, and then I'm going to scroll down just a little bit cause I don't really need to see these two rows when we freeze the pain. When these two rules, I'm gonna scroll down just till we just see this header here. And once we do that, I want to put my cursor right above the header and all the way the left that you want to curse her in a four a four. Then we're going to go to the view tab up top. We're gonna go to the windows groups, these other groups, We're gonna go to freeze panes, select freeze panes, and then we will freeze the pain. Pain has been frozen. No more pain. It's frozen. And then we're gonna scroll back down and you'll notice that the top Rose will stay the same. Now just to get perfectly down there. If I If I scroll down with my scroll, er it takes goes too far and I want one more row to do that. I'm just gonna go down here and just quick, one more time, and that will give us on our on our tab here. So it takes a little while to get used to that. Freeze panes. Once you have it, it can be useful depending on the worksheets that we are using. Okay, so we're gonna go a little bit faster this time. We're gonna use this similar information notes that Ah, the So if if we go too fast, go back to the prior pay period and it will be much the same. That's what's great about accounting and payroll. It's gonna be much from the same from period to period. Once we do this few times especially if we're working with the same company so we can get this information is gonna be exactly the same if I scroll back up. In other words, the marital status and the number of exemptions won't change unless there changed with an updated W four. So, typically, I can even just copy ladies, I can, right click, copy and go down here and just say that those are pretty much the same, right? Click and paste. We're not going to make any adjustments in this problem to the number of allowances. Typically, they'll be pretty much the same for most employees. Unless again they make a change. Teoh the number of allowances. Or, you know, someone gets married or are stops being married. So then now we're gonna go through and we're gonna enter the number of hours. So for Anthony more, we're gonna say has 163 hours for the month of September. The rate is gonna be the same as the prior month. 25 the regular pay. Then we're just gonna go straight through and calculate this everything that's the same. We won't put as much detail into to it. We'll do it right in Excel here. We're gonna say this equals the 163 hours Times 25 the rate now notify, Hit, enter. It'll go down to the one below it. If I hit Tab, it'll go to the right side, which is what we want. So I usually get in. The practice of aiding Tab goes to the right. We're going to say that there's three hours of overtime and again these hours in the overtime, we would have to calculate by the time she or a time clock. So I'm giving you this data that we would have to compile through whatever time instrument were using at some kind of punch in punch out time clock system. So we're not three hours. Also note that the hours are over. Time would have to be calculated, However, that is done. Typically 40 hour work weeks. Anything over 40 hours would have to be over time. I'm going to give us the overtime hours here just for the purposes of the problem. So that means that there's 163 plus three or 166 total hours, three of them over time, 163 regular time, The O tedx rate is gonna be the regular rate times, time and 1/2. So this equals the 25 regular rate times one time point 5.5. So that's 150% of the regular rate tab. That's gonna be 37. 50. Then we're gonna take the hours overtime hours, times T overtime pay rate. So this equals the three hours times the 37 50 pay rate tab. Now I'm gonna add up. The total columns are the total earnings, which is gonna be the regular plus the O. T. And that's gonna equal the regular in F 12 plus the O. T. In I 12 and tam. Now we're gonna go through and pick up the earnings for OSD. I food A and Suta. Now note osd I No one's gonna hit the limit yet because it's only the second pay period. And that's pretty high limit for for the wages were talking here. So no one's hit that, so it could just be equals the same. Now, remember that this number could differ from total earnings if there was some pre tax deduction which could include cafeteria plans for the insurance. So just note that if this was a qualified Section 1 25 plan, which we're going to say it's not for the purposes of this problem, then we could reduce fight or f i t. Federal England tags Social Security O a S t I ah, and, ah, the Medicare tax for it. But we're going to say this is a post tax non section 1 25 deduction will be coming out of the paycheck, but is not going to be something that's going to be reducing the taxable earnings for F I. D o A S t I and Medicare. Fouda, however, is on area of difference here. Fota. We picked up the same number, but we wanted there's a 7000 cap. So if I go over to the earnings schedule for, like, Anthony because it's only the first month, the cumulative earnings are just the first pay periods earning. So it's really just This 4025 is the only earnings in the prior month. But if there are more than one paper and we'd have to go back here not just to the prior month and see how much has been learned. So that means that we need the lesser of what he got paid this time, period or what takes us up to the cap of 7000. So, in other words, to get to the cap here off 7000 7000 minus this 4025 means that there's like we can only have 297 of wages. If the wages he was paid is greater than that, we have to pick up the to 97 not go over the 7000 cap. So I'm scrolling back to the left. We're gonna go back down. Well, let's keep so we can see this data so we can pick up that same number here, since there's only one pay period. So we could say you got paid this time more than that amount. So it was 2000 something, So we're going to a subtraction problem, so it's gonna be 7000 minus what he got paid to date, which is just this one pay period. So he needs another 9 2037 50 to get up to the 7000 this Plus this now being a cap out for his life of 7000 or at the company's income, the life of the company income. We're gonna do the same thing for suit. Except the cap is 8000. So again, if if whatever he needs to get up to 8000 is less than what he got paid, then that's what we need to pick up, which it is. So we're gonna say this equals the 7000 minus what he got paid prior. And that's gonna be the 2000. Uh, I'm sorry. 8000 should be 8000 equals 8000 minus what you got paid prior. And that's gonna be the 9 3037 50 Okay, so that's gonna be the new thing. This is basically the new thing this time, and we'll go to the next pay periods. Well, we'll see that this basically goes down to zero. So now we're gonna dio the payroll taxes, so we're gonna scroll to the next item. So we are in in 12. I'm gonna scroll back down so we don't get confused on what we're calculating. So here we are. We're on the o A S t I we're gonna pick up the O A S T I wages times 6.2 or 0.62 So this equals pointing to the 1 4087 50 times 500.62 and Tam and we're gonna get the Medicare H. I were going to say this equals and we're gonna point to the total earnings because there's no cap, so we don't need a Medicare wages. Times 0.0.145 point 0145 What? I missed the one 0.145 So 0.145 tab and then the f i t. This is gonna be where we need to go to the table again. So I'm gonna scroll back to the left note that when we look up the federal income tax, e f I t within the table, we will be using total earnings, which isn't exactly correct. We should be reducing it by the 401 K plan because that's gonna be a pretax calculation for federal income tax. So in that case, we're using a number here that's gonna be a little too high when we look up the table. The result of that would be that we're gonna be withholding a little too much. And if that were to happen, then at the end of the year when the 10 40 is filled out, we'd have too much withholding, which would typically result in a higher refund or a lesser tax owed at the end of the year at the 10 40 calculation. Now it's gonna be married for and the wages they're gonna be 1 4087 50 eso We're gonna go back here. We're looking for the tables for married monthly four and the wages of 4000 1 87 So monthly married were scrolling down 4000 one eso It's gonna be between here and here. Someone Let's go over to the four. And there it is. So this 181 87 1 87 Yeah, I think that's it. So I'm gonna go back here and note, Note that again a most of time. Most people are going to calculate this F i t manually like this, but it's not nice to dio from time to time so you can see kind of the complications of it. The computer will typically do a better job and make a less likely to make an air in this area. Note. If we do make an air on the F i T, it'll it'll wash out basically the refund. You should get a greater or lesser refund on the on the end of it when we do that before one of the 10 40 for the individual. So when they do their 10 40 they should get the refund or perhaps have to pay if there's an error involved in it. If it's an essay, if it's an air involved in the O. A. S T. I or the Medicare, we have possibly more of a problem in some cases. And because it won't, it may not be refunded when the taxes air done, and therefore we would have to amend that. But these two, it's less likely to make an error because they're very easy to calculate. Okay, so we're gonna go to the insurance. We're back to the insurance here. It's just gonna be the same. We're gonna give the insurance number, and the insurance number will be I'm just gonna pick the same up from last time. Last time it was this number tab, the union dues are gonna be the same tab for 41 K is going to be the same. So tab and again those will be dependent on the conditions. Then I'm gonna scroll back down so, citizens, and no scrolling around a bit. Then we're going to the net pay, which is gonna be that total earnings minus all the deductions OSD I h i f i t group union and 41 k will do that with a formula. This equals the total earnings minus the sum double click that some function, and we're gonna pick up the O A S D I all the way to the 401 came shift zero and close it up. And so there we have it. So here's the growth PE minus. All this stuff gives us the net pay. Now we're gonna do the employer calculations and the employer taxes for O A s t. I saying it's gonna be the same amount. But I like to do that calculation again. Kind of a double check, I guess, is gonna be this 1 4087 times 0.62 And that's gonna be the 2 59 67 63 which is equivalent to here. We'll do the same for the H I, which is Medicare. So this is gonna equal throwing back over the total earnings times if you go back over so we can see it Times 0.145 That's going to give us the 60 which should match what we have here and in the Fouda, we gotta take the photo wages, which is different than what we've calculated in the melt last pay period. That's gonna equal this 9 2037 50 times 0.6 tab. And then Suta, which is gonna equal the suitor wages we scroll back over, which is this one in 12. The times point old 54 and enter. And so there's gonna be that information. Now we'll do the same thing for the next employees and with scroll bag over all the way to the left. We've got Sandy Louis married four. We're gonna go through our hours here. We're going to say that the hours were 1 61 This time we're gonna have the same pay rate of 28 per hour multiplying out the regular pay is going to equal in F 13 this 1 61 in D, 13 times to $28 an hour and tab. Then we're gonna get the overtime hours, which will be one of one overtime hours. We'll calculate the overtime rate again, which is going to be equal to the regular rate times, time and 1/2 times 1.550% tab. Then the overtime pay is gonna be the one times 42. We obviously can do the math in my head, but we're gonna calculate it. So we have the same formula the one hour times the 42 equals G 13 times H 13 tam. Then we're gonna add up for total earnings, Deke, regular pay and the overtime pay. So NJ 13 equals the irregular pay in F 13 plus the overtime paid in I 13 tab in the O A S D I wages. No one's gonna have hit that one, or they're not gonna have hit that 1 28 400 So it's just gonna be the same equals that same number, the working of the same issue with the 7000 they will have hit that. So what we need to do is just get the enough wages to get to 7000. It's not gonna be the full 4550 for photo wages. We need whatever it is to get to the 7000 which will be less than this amount. We'll do that with a subtraction problem, which will equal the 7000 minus the prior periods of wages, because that's what it was up to. This date there's only one prior period, and that's gonna be 5 2073 meaning this plus the prior period equals the 7000 which is the cap. So we can't use the whole amount because it capped out. Same thing with Suta, except there's an 8000 cap so equals 8000 minus the prior period. Suta 4 4024 tab, Then this number plus the prior period goes to the cap of 8000 so we can't pick up the full number here. We have to pick that up, scroll back down so we can see our headers better. And we'll go through the o a S t I. So this equals the OSD. I wages times 0.62 tab, the H I or Medicare equals the total earnings cause there's no cap Times 0.145 and then the f i t. So we're going to scroll back over and we'll find that f i t. For Sandy Lewis. I am married four monthly pay period. The amounts that were looking up, It's 408,000, 550. So if we scroll back over here, we're looking for our tables, which are here, and we're looking for the married monthly, the 4550. So here's 4550. Now that one falls on the line here typically will do the higher amount, so we want the higher amount. I mean, that'll withhold a little bit more, and that's like a little bit more conservative. We'd rather have a refund. In other words, at the end of the year, when they do the 10 40 then to owe money, so we're gonna try to air by withholding a slightly too much than too low. Although the dollar amounts probably pretty minor. So here we have. The 235 will go back to our table and we're gonna put in its going back over to the F I t 2 35 group insurance. I'm gonna say that's the same. So we're gonna pick that up and again this would this could very I mean, this could differ depending on the terms, but I'm gonna pick up the same for the union dues. I'm gonna say that 401 K is gonna be the same. It may very depending on the earnings, but we're just gonna keep the standard or fixed 41 k contribution. It just depends on, um, the options that were agreed upon between the employer employee in the plan. Then we're going to the net pay, which is gonna be the total earnings minus all the deductions and taxes. So this equals the 4550 minus the sum double clicking the some function highlighting the oh , hey, s d I to the 401 k tab, it's gonna close up. That's good. So there's our net pay. So there is the net. Pay now will calculate the the employer taxes so away. SD I should match this amount, but I like to re calculate it. So we're going to say this equals the O A S T I wages times 0.62 which will be that same to 82 to 82. The h I or Medicare equals. And when it's cruel back over, it's gonna be from total amount here times, and then it's gonna be the point 145 tab. And then the Fouda, we're gonna say, equals the food wages, which will be this amount in l 13 times 0.6 tab. And then these Suta well equal the suitor total. And in 13 times 0.54 enter that picked up the wrong number. There's let's delete that it's gonna equal. We're gonna scroll over just one more to find the suit a number times, uh, 0.54 All right, so that looks, that looks more reasonable. Next employee scrolling back down. We're looking for Jill. And so Jill here has ah single one and 140 hours on regular pay and the hourly rate is 31. Regular pay will equal the hours of 140 even normal regular hours times to $31 an hour and then we're gonna have the overtime. We're gonna say that there was zero overtime overtime rate will still calculated, even though there's not any overtime to keep in. Conformity with our formulas equals the 31 regular rate times, time and 1/2 or 1.550% and then the overtime pay them. We're still gonna calculate it, even though it zero equals zero hours times the 46 50 overtime rate. Then the total earnings is we're still going to calculate both numbers even though there's only a regular pay equal to the regular pay plus the overtime pay, then the OSD I they're not gonna hit over jail. Haven't hit the overtime yet for hasn't hit the O. A S d icap yet. Therefore, this is just gonna be the same number. Tam of those 7000 will have hit the 7000 so same thing on the 7000 were going to say this equals the 7000 minus the prior time period tab. And so the prior time period is what day and what she has year to date in earnings, plus the current time that makes it the 7000 Therefore, we're gonna pick that number up instead of the wages here. Same thing for the suta, except for the 8000 cap. So it's gonna equal 8000 minus the suit of wages from the prior time period. Time. Our tab? That's gonna be 5 2090 This plus the prior time period is that $8000 amount. Then we're gonna have the o a S D I Someone scroll back down the o a s t I will equal the o A s T I wages times 0.62 tab the H I or Medicare will equal the total earnings Times 0.145 Then the f i t. We're gonna use our tables again. She's gonna be single one and 4340. So going back to our tables, we got scroll to the single table. So married, this is a single table monthly and we're looking for 4340 and the one column is here. So 4000 300 and 40 is gonna be in between here and the one column is this one? Because that first column is zero column so that's gonna be, ah, 4 91 Wait a second. That's for 405 It's actually 4340 we're looking for. So for three, 25243 it's gonna be between this column, which I believe is that for 74 that we want. Yeah, the 4 74 So we'll go back to our excel worksheet. We're gonna pick up that 4 74 minutes Scroll bag over. If I t will be 474 group insurance. We're going to say that's the same as the prior period. So I'm going to say that's the same. No union dues for one K. We're going to say that's the same just to keep this simplified and then the Net pays will calculate the next pay that's gonna equal the total earnings minus the sum double click the some function of the O. A S t i to the 401 k and we're gonna close that up. That's fine. Okay. And then we want t o a S t i for the for the employees. ERM re calculating it equals the o A S t i times 0.62 That's gonna be the to 69 which should match here. And then when the h eyes gonna equal the h I wages, which is gonna be just a total going back over times 0.1145 tab. Then we have the photo on. The Fujita will equal scroll back over to the photo wages, which is at El 14 times point 006 tab. And then the suitor, which will equal scrolling over to these suit times 0.54 and enter next one. We're gonna scroll back over last employee married three. We're going to say this is a salaried employee, So this time we're just going to say salary for the regular pay. Actually, we're gonna say salary for the, um, regular hours, and we're going to say that it's 35,000 and the total earnings is just gonna be the same. So we'll just say that equals the same amount. Now the O A. S t I she's gonna get a lot closer here because she's got that 35,000 but she's not there yet. She's that I mean, if we look at the earnings so far, 35,000 and then the 35 is the 70. So we got Obviously be careful here on the O STS will be the 1st 1 or the only one that will possibly hit that cap hasn't yet. Those who is still the 35 and then the Fouda already hit the food out here. So there is no foods, so it's gone and it's gonna be gone for the rest of the time, period. So they this always happens in the in the early periods or the early payroll periods, the food that's gonna be everything. And then it's gonna fade away. Ah, And then, obviously, if if we weren't monthly, if we're something other than monthly, then it would fade away a little bit more slowly. We paid People Weekly rather than monthly. But ah, it's gonna go away after the first quarter or first quarter and 1/2 typically for most employees. Okay. And then we're going to see the O A S t. I will equal the O A S T I wages times 00.0 Ah! 62 tab. And then the a h I or Medicare will equal the 35,000 times the point. 0145 tab and then the f i t. Now it's gonna be the same. We could do that calculation again. But what? Let's take a look at if we scroll back over here, I'm going to scroll back up, and we have to use these tables up top. So we'll do this at least one more time. We might not do it next time. It's gonna should be the same, but we'll take a look at this percentage calculation. And as we got to go all the way up past these tables because the tables are not gonna have enough numbers in order to calculate this, it won't be high enough to calculate the wages. Now, remember, what we're gonna do is we're gonna scroll back up top, and we're going to pick up this number first. So 3 45 80 So three. 45 p et. Times three because she has three exemptions. So this number, this 1037 40 is what we're going to decrease the total earnings of 30 fat 5000 by to then use in the table. So this minus minus. The 35,000 is 33,009. 62. If we scroll down to the correct table now, that's the number we're going to use that 33,000 or so We want to find the monthly payroll table, and we're gonna find the 33 is gonna land in between here in between these two numbers. So we were going to say 3 55,048 plus 32% over the floor, which is going to be this 27 at this first number 27 here, 27. So if we take out the calculator here, What, we're really doing what you were saying? How much is actually in between this section? Well, we said it was 33 96 to 60 minus the floor of this category, which is 2 27 1213 means that there's 7 6049 60 within this range, and that's the 32% range. So times 0.32 that's how much is gonna be taxed at the highest 32% and then we're gonna add to it what was in there before from prior brackets, which we can calculate from the floor already, which is gonna be plus this 5348.26 So that's gonna be that 7005 +08 So I'm gonna go back over here and we'll see the formula for I'm. All I'm gonna do is copy the formula. So if we scroll here the formulas here, I'm gonna copy this and just put that full formula right quick and pieced 123 So I just right click and copy, right? Click and paste. And then let's just take a look at it if we double click on it. It looks really complicated here because we don't see the sub totals. Eso It's almost easier to calculate this not in this kind of fashion, but we can do it this way, and it's it's nice to be able to see. So what we're taking is this 35,000 minus the exemption amount of 3 45.8 times three because there's three exemptions. So because of the order of operations, it's gonna multiply first and then subtract. And then it's gonna take this bracket of number of whatever we get there and say that minus the floor number 27 to 13 and and then it's gonna take. That's going to be really the number. We calculate this whole thing at the highest bracket of 32% times 32% then plus the 3 5048 all other brackets added up. So that's gonna be that number than the group insurance. Same thing is the prior month. So we'll just say that equals that 1500 nothing in the union dues. And then the 41 K will be the same. And so the net pay went scroll back down a little bit well, equal the total earnings minus the sum double clicking the some highlighting the O A S D i to the 401 k tab. You know, I'm gonna say yes, that's what we want And then the o a s d I should be the same here, but I'm gonna re calculate it equals the O A S T I wages times point 0.62 tab and then the h I or Medicare and note this number matches this number equals we're gonna scroll all the way over to this 35,000 times 0.145 tab And that number should match this number and in the Fouda equals. I want to scroll over to the food A wages and it zero times the 0.6 And then the suitor wages, which is also gonna be zero times 0.54 So there we have those numbers. 98. 80 Payroll Comp Problem September Earning Records: in this presentation, we're gonna enter the data from the payroll, register to the earnings records. We're gonna do this for the second month of operations for our problem. That being the month of September, we can see the payroll register on this side. The earnings records were going to scroll over to the right. We tried to put him on the same worksheet, which hopefully will be easier than having to different tabs. But we still have to scroll around a bit. Note the earnings record is in order by the name of the employees and then the pay period. If we scroll back to the payroll register, it's an order by the pay period and then the employees. So we're reversing the order in in order to get the detail by employees e rather than by pay, period. Now, we need to be very careful to make sure that we're picking up the data from September and not another time period as we go over and pull this information. So to do that, we could try to do something like highlight, possibly change the color of the paper, and we're on. So I'm gonna I'm gonna highlight our pay period here and just right click and go to make it , make it green or something and say, Hey, this is this is where we're pulling the data from And we could do that, even front for the whole thing. We might just want to go through the whole thing here. I like the entire process and say, right click make it some different color, like green. So now we're gonna say, Yeah, that's the one. That's where we want to pull the data from. Make sure that we're getting potato from the right periods very common to to mix that up. Okay. And then the next thing I'm gonna do, I'm going to scroll up a bit. And I want to keep the header rows here, whether I'm on the payroll register or the earnings record. So to do that, let's freeze the pains. So you want to be all the way to the top and then you want to put your cursor on, we're gonna put our cursor on a four, and then we'll go to the view tam up top. We'll go to the Windows Group and then we'll go to freeze panes and then within freeze panes, we will freeze the pains. And there we have no more pains or the pains. They're frozen. And so we're gonna scroll down and there we have it. So now we're on this record, and we can see that the headers will will follow with that. Now, if we go back to our earnings records, the pain is frozen too, because it was on the same cell. We're still going to screw up and down here a bit, and we're gonna get used to the the pains, you know, scrolling up and down with us. Okay, so then we're gonna go to the filing status for Anthony. So we're in Anthony's earnings record for the second month the month of September, and it's the same data. So all we gotta dio is use formulas to pull this information over. So within. So a B five, we're just going to say this equals and I'm gonna scroll to the left, roll down to the green data, and we're gonna pull in that m and sell B 12 and enter. So if we screw up just a bit, we pulled over in cell a B five. We pulled over the information from B 12. Now, we could just copy that. Information over. Now, I don't want to auto fill it over, you know, And it'll pull all the data that we want because it'll that'll change the formatting. So we're going to right, click and copy. We're gonna select every other cell and then let go, right Click and paste formulas only Just the formulas. We don't want the formatting. Just the formulas and moment will take it over and it pulls over the next cell each time, which is exactly what we want. It should be formatted perfectly to pull that over. And now what we're gonna get here is we're able to tell our employees on the earnings record not just what they earn that pay period, but what they earned year to date. So that's the point. Now we got the summary by employees rather than a summary by pay period. Now we'll do the same thing for a Cindy. So we're down here and Cindy, and we're going to say for the month of September, we're in a B 12. We're gonna say equals and scroll to the left. We're looking for the green data for Cindy. There it is. We're gonna pull this M right there for married and Inter. So there we have it. So there's the M. It's pulling from B 13. Now, we'll just right click on that and copy it, and we're gonna highlight the rest of the area. Let go, Right. Click and paste formulas only. So there we have that. And once again, we got all the data in terms of total earnings and total earnings to date, total earnings for the paper told learns to date, total earnings for the Pape total total alway S d. I sold security for the pay veered and to date, a total Medicare for the paper and to date, net pay for the pay period and to date. Okay, so now we're gonna go down to the next employees and do the same thing. It's gonna be great. So now we're on Joel Jackson. We're on a B 19 were going to say equals scrolls of the left Scroll up to the green data. There's Jill Jackson. We wanna pull, that s over so we'll say equals and there's there's the S that we want going to scroll down just a bit Now we're just gonna copy that. Right? Click and copy. Select the data to the right of it. And then right, click and paste. No formulas. So there's gonna be that data. And once again, we have the totals here for the net pay. And we've got the year to date total for everything. So we'll do this. Ah, believe one more time. So we're now on Judy Jones in a B 26. We're going to say equals. Um, I scroll to the left, gonna scroll up to the green data. And there's Judy Jones. So we're gonna say Enter. And now we're just gonna pull that over. So the M and there's coming from B 15 So be 15. So now we can right click on it and copy it. Select the area to the right, and then let go, right? Click and paste. Just the formulas only. And that will sum everything up for us. Make these a little bit larger so that we have that. So there's gonna be our information. We could check this now with our totals down here. Remember, we we could total everything up. There are total numbers and these air summing up each total for each individual. So in this case, we have total earnings of 96 9 73 If we were to do that over here now, we'd have to total up our totals for all the payroll registers. Now, well, sum up the totals in the payroll register, so we're gonna go all the way to the bottom here. We're gonna put in Total for the year for the payroll register. Now, to do this, what we're gonna do is unfreeze the pains first. So I'm gonna go up to the to the View Tab Windows Group, freeze panes and select that and we're gonna unfreeze the pains. I don't make it a little bit more screen that we can see. Then we're gonna scroll down, and we're gonna put our cursor in F 41 and say equals and then scroll back up. I'm just gonna I'm gonna have to use a fairly long form that we're just gonna just toe put ever. It's a simple formula. How her? So we're gonna say here's the total for the first paper in August. Plus, here's the total for the second pay period, so f nine plus f 16 plus. Here's the formula up time and then we're gonna go down. Here is the formula for, uh, October. Here's the formula Top. So F 23 plus, Here's November at F 30 plus, Ah, December at F 37 enter. So if we see that data, here's the actual formula equals F nine plus F 16 plus F 23 plus F 30 plus F 37 and that gives us our total. Now I'm just gonna copy them. And it's the same relative formula for the rest of the of our totals here. So we could just put this to the rest of our totals. Just gonna select our totals column or row down here. Let go, right click and paste. And I could just paste the 1st 1 because it should. The format should be the same. And so there's our total. So it brings down the totals. If we double click on it, I'm gonna make this a little bit larger here so we can see it. If we double click on anything, it should just bring down totals. Looks like it's doing what we want it to do. So now we can see that our total for what is this? Gross total earnings is 96 9 30 73 for our register. If we pull that over to our total earnings record 96 6 42 and that's regular earnings. And then and then we have total earnings. Is this 96 9 73 So 96 9 73 here. And if we scroll back over, we've got the 96 9 73 the other one, The check. Just to check one of these numbers, the best one check would probably be the net pay. So net pay is this 55 9 71 34 and so we probably should check all of them. But this net pay is is, uh, you know, the some 55 9 31 34 So it looks pretty good Looks looks like we're tying out here, and we just reformatted this data in order by employees rather than by pay period. Last thing we'll do is just undreamed this September area. Some backup here on B 12 some kind of scrolling around bits of B 12. Highlight this information and make it blue again. So I'm gonna select it and then right click on it. Selective little paint area. Now I have blue selected. If you don't have it there, this color blue, it's not on the wheel. It's not here. If you go, the more colors at the bottom. And if you go to the standard colors, you'll get this little wheel thing. I'm picking up this one right there, so that's the one we're using and enter. Other than that, of course, you could also go down here and format paint. If that was easier to do, you conform at paintbrush this up here. Just make sure you don't format paintbrush that the other format, I mean. In other words, if you were to do it that way, make sure you pick up the whole data set like this and then format paintbrush and then pick up the full data set here so that you're not formatting. One sells format cause that'll format more than just the color, in other words, so there we have that, and then I'm going to remove the color here. So this one's just white so that when or clear so it's not actually white, so be careful here it should be. No, Phil, no Phil down here. All right, so that's it 99. 90 Payroll Comp Problem September Journal Entry Payroll Expense: in this presentation, and we're gonna take the information from our payroll register for the second month of the operations of payroll the month of September and record it into our journal entry into the General Journal and the General Ledger and the trial balance. Remember, this is a process that many people many accountants don't fully understand. So if you can really understand these payroll journal entries, then your understanding, debits and credits. Really, Even if you're not processing payroll, by the way, you're still understanding debits and credits really well, and you get a good concept of how to record and post journal entries that are probably some of the more complex journal entries that we will see. So to do that, I'm gonna do September. We're gonna do September here. Now, there's still a situation of us having to pull over the wrong information, possibly making a mistake and pulling over the wrong information. So to make sure to pull over the right information, we may want to make this green again, and ah, then freeze our pains so that we can see the header column. So to do that, I'm gonna put my cursor on B 12 and highlight all the way over Teoh. Ah, be 15 right? Click and go the paint and make that green. Then we're gonna scroll up top, and I'm gonna try to keep this head or road. Now eso to do that. What will put our cursor right here on B four? Make sure your scrolled all the way to the top and then go to the view Tam up top Windows Group and freeze panes and freeze that pain. Okay? Pain is frozen. We're scrolling down so we can just see September. We could see the headers. This is the information that we want to pull from. We're pulling from the totals. So the blue area, right under the green areas where we want Now, we put this information on the second tab here. So it's the G l tab. So we're gonna go back and forth a bit from Tab Tam. Teoh up all the information to the G l tap to make the journal entry. Let's go over to G L tab. Now. Last time we were here, we left off entering this information for the first pay period and we were out of space here, so What we want to do is is, um, on hide some cells and and then get to a situation where we can enter data as easily as possible. So to do that, see how it's goes from B C D. E. And then it goes to 80. I'm just gonna highlight over this cell where I know there's some hidden cells right here, so we'll put a curse. We're right on the ease who It has his drop down, left, click and then go to a F Let go put your curves around the selected area and right click and unhygienic. So here's our data, and if you go to the right T, there should be. I'm gonna unhygienic to the right. And also you may have the frozen pains still in place here. So it's if something happening that's funny, such as? I can't get over two column A. Sometimes that's a hidden pain over there, or it's it's The pains are still frozen. So if we go to the view tab up, top windows frieze pains, we want unfreeze panes right now so we can see everything. And then if we scroll over, we can see our dates here. Okay, so now what we want to do is I want a freeze, the pains just to have the information where we want to put the input. So that's gonna be here in columns, G. Takei. So I'm gonna I'm gonna, um, hide these cells over here. We don't need these anymore. So I'm gonna put my cursor on f all the way to to a make sure selecting the whole column, right click the selected area and hide. And then we're gonna do the same for this, For the sheets to the right that we don't need right now. So from l put my cursor right on l We're gonna put a curse around hell and go all the way to the right to a D Let go. Right, Click and hide. Okay, So here's the data that actually I'm gonna unhygienic that I would like to have that little space there. So we're gonna go from metal, and I'm gonna get Teoh a c So we have this a d s a little space, and so we'll have that. So we'll hide. So if you wanted unharmed, do that again. Toe unhygienic. You have to just highlight over the highlighted area. It doesn't matter how many rows you go over. So he wanted unharmed. Right quick on hide and then do the process again. Okay, so now we're gonna enter this information, we're just gonna pull the information. Remember, there's gonna be two journal entries to record the payroll and that one to record after the payroll is over. The actual payment of payroll First journal entry will be the employee payroll earnings that were going to record than the employer portion. That's how I would think of it. We have an employee journal entry and then an employer journal entry. And then we're gonna have to pay that what we withheld from the employees and what we owe for the employer payroll taxes. So to do this, we're going to say, first, the employees and again, if you think about the most common or easiest way that paid roll would be recorded, that's kind of a good place to start. What would you dio if we didn't have all those payroll withholding stuff? You would just probably say, Well, cash is going down. I would credit cash, and I would debit payroll expense, something like that. salaries and wages expense. That would be it very should be as easy as any other journal entry. But now we're gonna do all these withholding, so it's still the basis he's still their cash is going to go down. But I'm not going to start with that. I'm gonna format cash at the end because it'll look kind of like the gross check going to the net. Check that cash being the net check. So that would be a credit at the bottom of a journal entry. And so we're going to start with the expense, which will be the first thing. So the expenses go up, expensive dead, it balances. We're gonna start with salaries and wages. So we're gonna copy salaries and wages. That will be our starting point. We're gonna put that in a church five. Right Click and paste. 123 Okay, so then if we get the information from our register, we'll go back to our register. Now, the total earnings then are going to be Ah, the earnings here. Now, we could pick this up with a formula, so I'm gonna go back to us. I'm gonna jump back and forth here we're gonna go back to the g o. We're gonna be in J five. I'm just gonna say equals Jump back to the register tab and we want to pick up that 48 77 50 and enter. So there we have them. So then what we're gonna do is we're gonna do mimic basically what we have here. So if I go back to the register, we're just mimicking everything that's gonna be pulled out, and that's going to include away SDI Isil Security, a child, Medicare F I t. Federal income tax group insurance union dues for one K and that will give us the net pay. So let's do that. We're gonna start with O A S T I. If we scroll back over here to the G L. So where we gonna put that? It's not gonna be an expense is gonna have to be some credit cause it's gonna have to reduce this amount here. It's gonna be a liability. It's gonna be something that we took from the employees pay check that they earned. We're taking it from them. We don't get to keep it. It's not credit to revenue for us. It's gonna be a credit Teoh these liability accounts. So here we have figure for Social Security, Medicare, not F I t or suta yet those air employer taxes. So if I hold down control, then we're also gonna pick up. I'm gonna skip those two. I'm gonna let go. I've let go of my mouth, have highlighted these two. Selected them, let go of my mouth and then hold down control. We are gonna pick up F I t group insurance, union dues and retirement. So note I can select all of these even though there's kind of a space here a gap by selecting these two and then holding down control and selecting the rest of them and we can copy them all, then at the same time. Or we could do them one by one over Can type them in over here. That's either way. Works red click and copy. And then we're gonna scroll up top. Gonna put that in a church? Six. Right click paste. 123 Now we just need to pull over this information. They're all gonna be credits. There are gonna be liabilities going up. So in k six, I'm gonna put not equals but negative. Go back to my earnings record. Are were earnings record. We're going to say this is the O A S t I in in 16 and enter. I'm just gonna do this all the way down. Here's a chimes Could put negative instead of equals To put a put a credit, go back to the earnings record. Here's the H Im and enter. We're in the f i T. Where it's going to say negative, Go back to the register F I t and enter. Here's the group insurance. We're just going to say negative. Go back to the register. There's the group insurance and enter. Here's the Union. Do that. We're just gonna say negative. Go back to the register Union dues and enter. Here's the 41 K retirement plan. Gonna say negative. Go back to the register, pick up the floor. One came and enter. So there's our information and note that the debits don't equal the credits to credits equal 3 20,074 The depth. 27 cents. The debits equal the 48. The next step is to have the plug. I use that after plug and the Czech figure. What should the blood be? Cash. The cash that's going out house of that match The register. It should be equal to the net. Check 27 705 23. So let's see if that's the case. That'll be our kind of our check. So we'll go back over here and and I'm going to use their negative some formula. The plug formula equals negative. Some double click to some. Highlight that 48 77 down to the 7 2074 and enter. So there we have that. And then we're gonna put that to cash. So we're gonna highlight the 100 the cash checking account. Right? Click and copy. We're gonna put that in age 12 right? Click and paste. 123 So there's our information. Now we'll post this transaction to the General Ledger to do that, we're going to post first the, uh, this item here and now we might want to freeze the pains, so I'm going to scroll up just a bit and go Teoh this cell in 81 and I want to be able to see this screen no matter where we go on the other side here. So what to do that we're gonna go make sure you're on a D one, Then go to the View Tab Windows Group and freeze panes and freeze the pains. Now, if you can't freeze the pains for any reason, that's OK. It'll just take a little bit more scrolling. Teoh, pick up this information. So we're gonna have this in 502 if we scroll down in order assets, liabilities and then equity and income. Here's 502 on the income statement. If we scroll to the right to find 502 and assets liabilities Equity. Uh, here's still liabilities. And here's the 502 It's in all the way over here in B m 19 where we will say 10 1 and we want to pick up and be in 19 equals. Scroll up just a bit and we're picking up that 48,077 50 and enter. So there's our information. It brings the balance up from 8 48,096 by 40,017. 50 to 96 9 70 30 50 If we scroll back over, I'm gonna put my cursor right on the left side of the frozen pains and go right. And there's our information right here on the trial balance. Okay, so then if we scroll back up, I'm gonna make this a bit smaller so we can see this all on one screen. We're gonna pick up this to 15. So, uh, count to 15. If I scroll over accounts to 15 I'm gonna make this a little smaller. Free scroll back down. We're looking for 2 15 That's gonna be this item. So it's gonna be the same order on the G l third liability account school to the rights. If we scroll down on just a bit, we got to 13. And then here's to 15. So we're picking it up here on a S nine. We're gonna say 10 1 tab, and then in 89 we will say equals. And we're going to pick up this, uh, 2980 81 and that will bring the balance back up to that 2980 81 Reporter cursor right to the left of the frozen pains and scroll. Right. Then we'll see that information here as well. Now we're gonna go to to 20. So to 20 is gonna be the next item down to 20. We're gonna scroll to the right and see if we confined to 20. So here's to 15. Here's to 20. So we are gonna be in cell A W nine date is 10 1 and then in a X nine will say equals. And we're gonna point to that 6 97 12 bringing the bounce up to 6 97 12 and its rounding a bit differently. It's because of rounding here. So what will be okay with that? We're gonna go to the left. We're gonna go right one. And so there's our information there. Now, we're gonna go to 2 25 to 25 if we scroll back to the right, we're looking forward to 25 So here's to 23 years to 25 so once can date 10 1 Ron, be eight now B f eight and we're gonna pick up the information by saying equals and we're looking for 2 25 which is this 8004 04 and enter. Then we'll go right to the left of the frozen pains and scroll right once and there. We have our information here. Okay, so now we're looking for 2 43 Here it is in the journal entry. Here it is on the trial balance. If we scroll right, looking for 2 43 and there it is. So to 43 scrolling down just a bit, This is gonna be in b e 22. We're gonna say 10 1 and then in b F 22 equals, we'll scroll up and we'll pick up this 5500 a penny. So there's that amount, and then we're going to scroll to the right Or let's put a curse that writes the left of the frozen pains and then scroll right ones. And so there's this information for the, uh, retirement plan. It looks like that we put in there, and now we're going to the union to 45 to 45. So it's fine. Account to 45. Scroll into the right, scrolling up just a bit. Here's to 45. So as of 10 1 tab in cell, B J seven equals and we're looking for 2 45 Here's that 16 and enter bringing the balance upto 32 And if we go right to the left of the frozen pains and scroll right, then that same information should be here as well. Now we're gonna go to 2 47 the retirement plan, which is down here to 47. Scroll into the right to find 2 47 we're gonna scroll to the right and there's 2 47 It's in Selby, I 22. I don't say 10 1 10 1 and then and sell BJ 22 equals, and we're gonna pick up that 7 2074 20 and Inter brings the balance up. Then we put a curse it right to the left of the frozen pains and scrolled right. And that same information, then is that is here. Then we're gonna pick up the cash. So here's the cash on the General on the journal entry. Here's the cash on the ledger. The general journal being the same areas, the 1st 1 So here it is on a K eight 10 1 Here we are in a l eight equals and we're picking up that 27 705 and enter. So they're brings our cash Teoh 5 26 9 55 51 If we scroll back over, we see that same information on the trial balance in the trial balance should now be in balance. Note the results of this journal entry is that the expenses went up. Now, of course, this has given us to join countries. Now it's something both the data, but the expenses are going up, and the payroll taxes have not been recorded yet. And all of our liability accounts have now been increasing. We're going to pay them at some point now. That's just gonna be the employees e portion to record payroll. Now we got to record the 100. 100 Payroll Comp Problem September Journal Entry Payroll Tax Expense: Now we got to record the employer portion of payroll taxes. So in this case, we know that cat and we're first going to start with the liabilities. Now, if we go back to our register, what we're picking up this time is everything in the orange area. Employer taxes, Social Security and Medicare. Fouda and Suta, these two are matching. They're both in the employee and employer portion, But this is the employer portion that's not coming out of the paycheck. Food, federal unemployment, tax, Suta, several state unemployment tax. Our federal only taxes. They're not coming out of the state checks. So if we go back to the G L then we were gonna have an expense here. So looking at our general Ledger, then we're going to say that what we have here is the pika osd I the h i and the food and the suta. These are gonna be the liabilities we need to pick up. So I'm just gonna highlight from a 12 down Teoh the, uh what is that? A F 15? Let go of the selected area, right? Click and copy. And then I'm gonna skip a line because we're gonna put this on the bottom. There gonna increase the liabilities and therefore be credits will be on cell H 15 under the date. Right click and paste. 123 And then the debit is going to be payroll taxes. Expense. I remember this is the tax portion. We haven't recorded any taxes yet. Even though we had liabilities related in the prior journal entry, this is the only employer taxes that we have. So these are gonna be debits. They're gonna go up in the debit directions, Will, right, click there. Copy them. Put that on on top in H 14. Right Click and paste. 123 All right, So we're gonna pick this information up from our register, but will pick up all the liabilities and then the payroll expense will be just the some of them. So we're gonna start here in K 15 were going to say negative instead of equal, so we can flip the sign and then go to the register and we want to pick up the O A. S t I and enter. And then we want to go to the to 25 acre for the Medicare. So we're in K 16 negative and then go to the earnings records. And we want to pick up this 6 97 12 and enter. Then we're in K 17 for the photo. We're gonna say negative and then go back over the register and pick up the photo and enter . Then we're in. Kate 18. We're gonna say negative, this is suitable. And go back over and pick up the suta and enter. So there's our information. If we sum that up, flip the sign. That's what The dep. It's gonna be 4000 to 66 17. That's gonna go here in j 14. Gonna do that with our plug formula. Negative s, um, double click the some. I'm gonna move this over now, and then we're gonna highlight this information and enter. So there's our payroll taxes journal entry. Let's record this now. So here's the 5 12 So we're gonna go find 5 12 I'm going to see if we can make this find 5 12 in the General ledger. So of course it's it's dim way down here. It's gonna be in the same order on the G L. So we're gonna go to the right. We're looking for 5 12 order assets, liabilities, equity income and expenses scrolling all the way over. And we see Ah 502 and we're looking for payroll taxes. And here's the payroll tax expense. It's 5 20 not 5 12 5 20 So here it is in B Q seven. We're gonna do this. Now. This one's as of 10 1 and we're in BR seven, which will equal. And we'll pick up this 4000 to 66. Enter bringing the balance up. So if we put a curse it right to the left of the frozen screen and school, right, then we should see that same balance here. Then we're gonna record on to 15. So here's to 15. Account to 15. That's a liability account. Here it is. So it's our third liability. Should be the same order on the Geo assets Liabilities were looking for a count to 15. Here it is. This is on 10 1 in 80 10. We're going to see the employee portion right above it on the same date. Now the employer portion equals this 2980 81 bringing the balance 25961 If we go right to the right or the left of the frozen screen and then go right. And then we see our balance down here for, uh, fi ca for the 2 15 account and that we're going to go to the to 20 account. That's gonna be right underneath to 20. Same order on the G l if you go to the right, but looking for a count to 20. So to 22. 23 20. So here it is for Medicare. So to 20 we're gonna be in a W 10 as of 10 1 Now we're in a X 10 equals and we're gonna scroll down just a bit and pick up that 6 97 and enter. That'll bring balance up. So again, we have the matching here. Two accounts, one in the prior journalist of the employees and now in the employer portion, that'll bring the bounce up to 13 94. We go back to the left side of the frozen screen and click rights. Then we should see that same amount here. Now the employer only taxes, photo and suit. M 2 23 to 23 is here to 23 same order on the Gol. We're looking for 2 23 So we're looking for 2 23 Here's to 20 years to 23. So we are in B A eight. It's gonna be on 10 1 date, and then on BB eight, we're gonna say equals and scroll down to that photo in K seven and enter. So that's gonna bring the bounce up to 40 to 62 if we go right to the left side of the frozen screen and scroll right, then there's the 42 here. Now we're gonna go to suit him on to 24. Here's to 24. Gonna scroll to the right and look for accounts to 24. Screw up just a bit. Looking for to 24 gonna be down just a bit. So we're having down here in B A 22 10 1 date BB 20 to sell. We're gonna say this equals and go over to the suit em. And that will bring the balance up to that 5 45 uh, 62 for go right to the left of the frozen screens and scroll. Right. Then we should see that amount here as well in the trial balance. That should put us back in balance here. Note that two accounts affecting the net income are from the first journal entry. The wages payable the second, the payroll taxes and all these other things that we withheld on the first journal entry are are not directly involved. They're not payroll tax expenses to us on Lee. The employer portion are recorded of payroll tax expenses to us as the company on the on the financials, Okay? 101. 110 Payroll Comp Problem September Journal Entry To Pay Payroll Taxes: Okay, next journal entry. We're gonna say 15 more days of past we're gonna pretend 15 days have passed and we've taken this information from the employees and recorded our portion of the employer taxes for payroll. Now we need to pay it. So just like we would with accounts payable, it went up. Now it's gonna go down. We're gonna pay it. We're gonna pay it with what? Cash. So cash is going to go down, and we're gonna record all these other liabilities. Now, I'm gonna record cash last year because it's gonna be a credit to cash, decreasing cash. And it'll be just basically the sum of all these accounts we will make here. No, just just as a note in practice. In real life, we might get this information and record it from summary from A from an outside payroll provider that does our payroll for us. And we could do it in one journal entry there, but also will have if we're doing it in practice, we could have ah, separate paycheck for each individual employees. Or in this case, we might have to have a separate deposit for the federal taxes in the state taxes possibly and so note that it could be broken out a little bit differently in multiple checks to pay off the, uh, the payments. However, in essence, it'll be the same type of thing. We're doing this with journal entries. If we were to write a check in the system, we would have to write, you know, at least one check for the fight gun, Social Security, and possibly separate checks for food, Toe and suta. But we're gonna do the journal. Entry will be the same type of journal. Entry in the payable goes up, and then we pay it off. Okay, so here's all the liabilities we need to pay off. We need to pay off. Uh oh. Asd I h i fota and suta and at federal income tax. So we're just gonna pay all these amounts there and just take it out of cash. We're gonna leave the group, insurance the union dues in the retirement right now, and just accumulate those upwards as liabilities that we owe to the employees. We owe the 41 K payments in some way, shape or form the union dues we gotta pay to the union. We're not gonna record the payment, but obviously we would have to pay. That's the union. We're just gonna let them accumulate the retirement plan on This is the insurance. We would have to pay the insurance in some way, shape or form. Retirement plan is gonna have to be repaid in some way, shape or form. We're not gonna get into the details there. We're gonna pay the payroll tax, so we're gonna right click here. We're gonna put that in cell H 20 right click and paste. 123 Then we'll pull the amounts, and we're just gonna These are all credits, so we're gonna do the opposite and debit them to make them go down. Now, I know you might be tempted to do a journal entry here and say equals the cell. We can't do that because it will make a circle reference when we post it so because when we posted this number will change and then we posted it using this number, and that doesn't That's a circle reference. We can't take this number in order to make this number and then change this number. Based on this number that we used to bake this number. So just that's why we're not using a formula. You could try that just to see what circle references. Once we posted, it will be a problem. So okay, we're just gonna type these in their 5961.61 and then the next one for pica 1394.25 and then food to have 42.62 And then Suta is gonna be 5 45.62 and federal income tax 8404.13 And then we will some these up. We will need a credit then, which of course, will go to cash. I'm gonna copy the cash right click on E E and a F five and copy. And we'll put that on the bottom here for cash in H 25 right? Click and paste. 123 And the amount is gonna be if we sum this up, it's 16 3 48 23 am gonna use our plug formula Negative s, um, double click the some function in Highlight this information and enter. So there we have it. So now it's post this out. So here's to 15 We're gonna record this one first. So to 15 up Top and I scored all the rights. It's gonna be the same order on the general ledger. Here's to 10. Here's to 10 years to 15. So we are in So a s 11 this is gonna be 10. 15 now, when we're actually making the payment and we're just going to say equals and scroll down to the 5961 Make sure you pick up the correct journal entry because clearly we have a few now And it might help to if you're if we get mixed up to highlight the journal entry were on. Sometimes I do this right click and make it green just so the colors actually help. I used to think colors were not not accountant like, but they're really helpful. So we're just gonna pick up the green numbers now. So now we're gonna say to 20. So here's to 20. Here's to 20. So we're gonna scroll to the right and find to 20 and so we're looking for 2 20 And so here we got it and it's gonna be in sale a W 11 10 15 minutes l a X 11 will say equals Scroll down just a bit and will point to this 1394 and enter. So it goes down to zero. We go right to the right of the frozen pains. We can see that these air going down to zero now zero and zero now food Tim. So here's Fruita to 23. It's going to the right Looking for 2 23 It is 2 24 We want to 23 is gonna be as of 10 15 in Selby be nine equals Scroll down. We're looking for the green area 40 to enter. That brings it down to zero. We go right to the left of frozen pains and scroll. Right. We could see it goes to zero on the trial balance. Then we're looking for suitable to 24 so we'll scroll to the right to find suitable. So 2 23 to 25. So here we are on 10. 15 and b B 23 equals and we're looking for this 5 55 45 Enter. And that brings us back down to zero. Does typically what you would think in a payable account just like accounts payable it goes up and then it goes down. You know, we owe money, and then we bay money, okay? And then we're gonna go to the F i t. So I'm gonna go to the right of the frozen pain one more time. F I t 2 25 Let's look for to 25. So here's 2 24 Here's to 25. We're on 10. 15 tab in b F nine We're going to say equals and point to that 8004 04 13 bringing us back down to zero. Same effect on the payable account. And then if we scroll to the right or we go to the left of the frozen pains and scrolled right, once we'll see it goes down is there on the trial balance as well. And then we got We should be imbalanced by this point. Oh, we didn't record the checking. Now we're gonna according to cash the cash going out. So here's the cash. That's our first account. So we scored on the right. We're gonna be on a K 10 10 15 on a l not nine or nine out 10 equals and will pick up this 16 3 48 So there we have cash going down to 5 10 607 Every school to the left of the frozen pains and scroll. Right. We should have that same amount here. And there is our journal entries. So now we've recorded the employee portion, the employer portion, and, you know, the the salary expenses and the with holdings and then the employer portion of taxes. And then now then we paid it 15 days later. Last thing I'm gonna do is just make this back to our normal blue. I'm gonna highlight this right click, and we can go here, and then we can make it our normal blue here, which is also on the wheel for goto this wheel, The standard it's right there, or you conform at pain it. So if you wanted a format pain and just make sure you're picking up the whole row, don't pick up one cell and try to paint the color because you're gonna paint the format to . So we want to make sure we pick up this whole room, go to the home tab paintbrush, and then pick up these full rose. It should paintbrush the color and you know the same formatting for the respective columns . 102. 120 Payroll Comp Problem Form 941 3rd Qt: in this presentation, we will fill out the quarterly 9 41 forms for payroll taxes. We will do so using our information from the papal register in Excel. Note. We have information so far for the month of August and September, our data starting in August. Therefore we don't have any first or second quarters. We're in essence starting in the third quarter here. So we have these two months of data and then the fourth quarter, October, November, December we don't have yet note. When we talk about quarters, sometimes it's easy to. Sometimes it's We can think that there's four months in 1/4 because 1/4 because it's 1/4. But just remember, that quarter is gonna be the 12 months divided by four, which is three months. So there's three months in each quarter an hour quarter here forces only two months because we started in the middle of the third quarter. So what we're gonna do is we're gonna sum up of this data and we're gonna use this data in order to fill out the form 9 41 To do that, we're going to have to add this up, so I'm gonna add up the 2/4. Do that all the way at the bottom. Down here of our payroll registered, we have quarter three and then we have the year to date totals. So I'm gonna I'm gonna put both of those. I'm gonna fill both of those sections out. So in, Ah, f 39 we're just going to say equals. I'm gonna scroll all the way up top to the total in our first data, which is an F nine, and then just say, Plus, they're gonna scroll down just a bit and pick up thes total in the next set of data, which is September in F 16. And that's it. That's all we have for the first quarter and then enter. So there we have that. Now I'm gonna do the same thing for the yearly totals down here on. That'll mean that as when we weren't used the worksheet in the future, that totals will populate just for us automatically. Ah, these probably shouldn't be green here. My own green. These I'm gonna I was gonna highlight thes. It's probably not green on your sheet. Read now. Right click. But I'll show you what I'm doing and then paint and make it blue. Okay, so now we're gonna do the same thing for the yearly totals, and it'll match right now. But as we move forward, then it'll differ. So And once we do that, then I'm just gonna copy these formulas over to all of our total datas, and it'll populate for us automatically. So in cell F 41 we're going to say equals and scroll all the way to the top and were appointed to the F nine and then plus scroll down just a bit 0.2 f 16 plus and note. The formula is up here. We can see the formula in the formula bar up top, and then we're gonna scroll down, even though they're zeros in October. I'm still gonna pick it up, pick up that number. Plus And then here's the totals in the formula bar. Then we're gonna pick up this zero in F 30 plus and they're going to scroll down just a bit and we're gonna pick up the zero in F 37 enter. So there's our information now. We're just gonna copy that information and paste it over into our totals on the right, and it should just move over the relative formulas. So I'm gonna highlight these cells, right? Click and copy. And then we'll just populating is gonna highlight all of these cells or select all of these cells, right? Click and paste the 1st 1 and shouldn't matter here or the formulas, but they're all dollar amounts, so it should be the same. So there we have that now we're using. Well, it doesn't matter which one were using that. Both show in the same numbers right now because we only have two recorders. But as we populate the worksheet from here, it will then populate the rest of the data. Now, we're gonna take this data and see what we can fill out here on the 9 41 the 9 41 We're gonna have the e i n number First, that's gonna be the employer identification number, no matter what type of entity we are. So Proprietor Partnership Corporation, we typically will need what we will need an e i n number to fill out the payroll. And that's going to be separate than are other identification number for the Internal Revenue Service. So we've got the name, the address. We're not going to concentrate on that here. What we do want to make sure we do is check off that we are in the proper quarter. The third quarter, July, August, September Note. We only have data for August in September because we started operations within October. Okay, so then we're gonna go down and start filling out our form down here. Line one says number of employees who receive wages, tips or other compensation for the pay period, including March June in the quarters here. So we're gonna pick up the number. We have four employees. So it is a four. Okay, then the next one says wages, tips and other compensation. Now, the wages, tips and compensation here has to do with the federal income tax wages, tips and compensation, which will differ from what we will have down here in terms of wages and tips and whatnot for Social Security and Medicare. So those are the three taxes that we will be reporting here. These are the federal taxes, payroll taxes, including F I t. Federal income tax for the employees. Remember, this is the employee's withholding, not our taxes as a corporation that will report at the end of the year or as a business tax . This is the payroll tax. And then we'll have the Social Security and Medicare, both the employee and employer portions. So here we're looking for line to what the wages are for the F I t federal income tax, and that should match if we add up the 9 40 ones to the end of the year, what will be recorded if we sum up all the W two's meaning on the W three, it'll match the total wages for federal income tax there. So we're gonna go back to our data then. So from our data, we're gonna pick up the total earnings for the quarter, and we're going to reduce it by those things that are gonna be reduced from total earnings . Which would we calculate the taxes And those will include the retirement plan so before one K in this case. And it would include the group insurance. If the group insurance was a section 1 25 cafeteria plan, we're going to say this one is not here. So we're just gonna reduce the net pay and note that this should kind of match the type of calculations we had with the with holdings. When we withheld on the federal income tax meaning when we looked at each individual payment and tried to find the f i t tax, we should have taken the payment minus the 41 K plan and then looked at that information up to tie out to the tables. So, in essence, we're looking for that same kind of total number for total wages regarding federal income tax. So if we pull the calculator out here, we're looking for this. 96973.5 minus this 5548.4. That'll give us the 91 4 25 and 10 cents. So we'll go back to our form 9 41 back to the 9 41 we're gonna put then that 91 comma 4 to 5 tapped to be in this other side because they put the death toll in for us and 10 cents. So then we got the federal income tax withheld. No, no, we can't calculate this again. We can't use this total number and calculate the federal income tax withheld because it's not a flat tax. It's too complicated to do so. All we can do is tell the IRS Hey, this is the what the wage base that we that we used. But all of our employees have a different number of exemptions in a different set of circumstances, and therefore we cannot just use that number in order to generate the F. I t. So this number, although useful to the IRS, doesn't really indicate anything much at all with regard to what the actual federal income tax withholding could be, All we know is what we actually withheld. So if we go back, Teoh our data here, we're going to say that the actual with holdings for the federal income tax is the F i T number this $17,003 in 26 cents. So we're gonna use that number. We're gonna go back to our form, and we're gonna put in that 17 comma. 03 tab and 26 cents. Now we're at the Social Security, so we got Social Security wages, so we're gonna go back to our table. We're gonna pick up these Social Security wages now, in the third quarter, they're the same as total earnings. And that's because one nobody's hit the cap 1 28 400 in the next quarter at will. Because we have one employee who is ah, high earner and notes that it could also be different if there was something that could be deducted from the wage base for O A S D I Ah, and Medicare. It could be different from the total, and that would include a cafeteria plan. So remember, this isn't a cafeteria plan put. If it were, then that would be another instance in which the O A S t. I and the Medicare would differ from the total earnings. So we're gonna pick up this number. So we're gonna go back to our form here and just note Before we do that, I'm gonna pick up this number, and we already calculated the away SD I hear and we calculated it here and note the rate 6.26 point two. When we go back, we'll note the difference here could be a little confusing. So we're gonna go back and put this data in. We're going to save the amount of 96 comma 973 tab and 50 cents and note the rate here it says. Then the multiply times 500.1 to 4. You might OK, we'll do that. But what is that? Where does that number come from? 0.1 to haven't seen that number before. And that number, of course, is the 0.6 to 6.2%. We've been using times to meaning the employer and employee portion. So we're calculating the employer and employee portion at the same time. In other words, so we're gonna take that point. Oh, I mean, 00.1 to 4 times the 96973.5 and we get 12,024. 71 about So we're gonna put that here 12 comma 024 Ah, Tab 71 about Okay. And you might say, Well, I don't see that number. There will, of course. And you're probably thinking at this point that that's the twice what it should be. So here's the 6.2 and the 6.2, and then the amount. Then we had the employees portion. I'm holding down control and then highlighting the employer portion giving us the total portion of 12. 24 71. So that's where that number comes in. And it's a little bit confusing six to go back and forth on that. Now, we don't have any tips, Thankfully. So we're gonna go to the Medicare wages of Medicare wedges. We're gonna do the same type of thing. Here's the Medicare wages were just gonna pull from the O A S T I. It will remain the same. Unless, of course, once again we have this cafeteria plan was something that could be deducted from it. There's no cap as there is for the Social Security. Therefore, we're just going to use the total earnings here. So we're gonna go back to our form. We're gonna fill out that number with the total earnings is the same 96. It'll differ once we get toe the last quarter here because someone will hit the cap on this one. But not this one. Notice it is different than this number, which is total wages, because this one is reduced by before one K or the retirement plan. Okay, so once again, we're gonna multiply it times the 0.29 a number you may not recognize, and but that member is that point? 0145 The one we probably have used way too much. If you've gone through this old problem Times two. And then you got a 0.29 That's where that comes from. Its the employer, and include a portion of the rate times that 96973.5 gives us to 812 23. So we'll put that here. Two comma, uh, 81 Tab 23. Now, once again, where does that number come from? On our worksheet. Going back to the worksheet. Here it comes from the h. I hear there's the employee portion and the H I hear I'm holding down control and selecting the other one. And that's the to 812 23. Okay, let's see what else we have on this exciting form. We are then not having tips. So we're just gonna add these two up this one Line five. He says add columns to from line A five a five B five C and five D. So we're just gonna add these up? We're gonna say 12 024 points. That one plus 2812.23 gives us 14 8 36 94 total Social Security and Medicare or total FICA taxes 14 comma 836 Taft 94. Okay, so then we have Ah, the next line says section noticed them And do tax due on unreported tips. We don't have any veterans that were good. Believe that link and then six says total tax before adjustments saying number. So, uh, actually, we're gonna not the same number we're gonna add Line 35 e and five F meaning federal income tax, plus the Social Security and Medicare that we've already added up over here. So it's pulled a trustee calculator account once again. 17 3.26 federal income tax plus to Social Security and Medicare fighter taxes. 14 836.94 And that gives us the total taxes at this time 31 8 40 20 cents. So that's gonna g O here. 31 comma 8 14 and 20 cents. Okay, so then the next one says that quarter adjustments. If there's any rounding, we're gonna have to put some adjustment there. We could be off by pennies. So if we're off by less than a dollar. That's typically Okay, well, just going to say that's a rounding error. And they're gonna not gonna make us write a check for a dollar, which is nice. We do need to be pretty precise for payroll taxes as compared to other taxes, even even income taxes. We need to be pretty much down to the penny as close as possible. Then the total taxes after adjustments is gonna be the same. 31 comma. 840 20 cents. Small business payroll tax credit. We don't not gonna have anything. There were going to say total taxes after the credit. 2031 840 and 20 cents. Same number. Now it's really important. Teoh, wrap your mind around the fact that this is going to be the liability amount and then we're gonna compared to the deposit amount. This form is not here to tell us what to pay. And then we write a check necessarily. This form should be an information form only, just like the 10 40 except that 10 40 doesn't come out to be exact. So your individual, our individual tax form 10. 40 at the end of the year. We should, in a perfect world, already have made the payments. And we're just telling the iris, here's what we owe. Here's the payments we already made, and in a perfect world, it would be zero, and we wouldn't get a tax refund or payment. Now, because the income taxes so complicated, that's impossible. And we usually work it out so that we get a small refund back. But on the payroll taxes, because it is more precise. It is possible to be exact, and we should be exact down to the penny that we can around off. So no, we already made the payment, and we already we already have the payment. So this is the liability portion. Now we're gonna look at the deposit portion, and the story is, Hey, Iris, this is what we owe. Based on the calculation, you can see that we prove it up top How we get to this number Now, we're gonna show you that we have already paid it. Hopefully and and so we don't know anything here. That's it's been done. It's been done properly. Here's the evidence of that. So we're gonna go back to our form and we look for the deposits now. So to do that, we're going to go to the G L. So if we scroll down to our journal entries, remember, our journal entries had, like, a journal entry to record the expense for the salaries and wages and then to record the payroll tax expense, and then we paid the payroll taxes with cash. So here's this last journal entry paying it off. So with the payroll happened in, um, August and then we process it it in September. And we didn't make the payment until 15 day the 15th of ah, September. So this payment, then cash is paying for the OSD I the h i the food tub suta the federal income tax that was incurred for August, which were paying in September. And then we did the same for October. We're paying this cash for the federal income tax to fight up the food A and the SUTA and the federal and federal income tax in the Medicare for September that we're paying it in October. So, in other words, this payment in particular can be confusing because we might say what happened in October and that's the last quarter. That's October, November, December. That's the last three months of the year. That's the last quarter of the year. So where should this payment go? Well, we applied it to the liability which was incurred for the payroll period in September. So really, this payment is applied to the liability that was incurred in September. So these are the two payments we're gonna have here. Now we have to break this out a little bit more to because we're dealing on Lee with, uh oh, yes, D I h I. So security, Medicare and F I t. We're not dealing with federal unemployment or state unemployment. And you might say, Well, why aren't we dealing with federal unemployment? It's a federal tax, and that's what we're working with. The federal taxes. For some reason, the federal unemployment we only do yearly on a 9 41 possibly because it's so much smaller so that I arrested, saying, Hey, you don't have to report that on a quarterly basis will only make you report that on a yearly basis, because the amount is so much smaller typically on these, because the amounts are very significant. We want to see them on a quarterly basis. So in that case, what we need to do is pick up this number of this number. I'm holding down control and this number that's gonna be our 16. 80 21 for our first payment. And then we made a payment for the next month. In the quarter of this, this I'm holding down control and this. So these highlighted areas add up to 31 8 40 20 If we do that with a calculator, of course, we would just say it's this six. So 63.1 plus the 1417.98 plus. Then I'm picking up this number 8599.13 plus. And then we're picking up this number 5961 point 61 plus And then this number 1394.28 plus and then the f I. T s number 8404.13 And that should be that same 31 8 40 20 cents. So that's what we're gonna use. So if we go back to our form here Ah, we calculated it to be a 31 8 40 Tab 20 cents comes out exactly. Note that these aren't the same number, though. This numbers are liability. And this number is the deposits we made. Okay, so that's basically it. Now, the next component we can have is the monthly break out. So we're gonna kind of pretend that we need to break this out on a separate form just to show you the separate form that will basically support this number. So here's the schedule B for the 9 41 this is gonna be supporting once again that that deposit number. So we got the same. Yeah, in number. We need up top. We need to represent the third quarter that were working in, and then it's gonna break out by month. There's gonna be three months within the quarter and we wanna have the payments that were applied. Now for us, it's only gonna be one payment for that month because we're monthly payers or are payrolls monthly. But if we were to pay weekly, biweekly or semi monthly, then we would probably have more than one payment. So what we're gonna do is just break the same information out by the actual payments. So in the second month, we've already filled it out here. But if we go back to our data, we're in essence picking up this, uh, number that we paid. And that's gonna be this. Plus this. I'm holding down, Down Tab and the f i t. That comes out to $16,080.21. If we go back to here back to here, it's gonna be 16 80 21 cents, and that's the total. So we only have the one payment, of course. And again, if we had, if we had weekly pay periods, we'd have more than one payment in the month. And then if we go back over here, we're going to say that the second payment we made it is going to be this plus this and this amount. And also note, of course, that ah, when we actually wrote write this check, we would probably have to write separate payments or make separate payments, whether the Elektronik or by check for Fota and Suta. So this journal entries, representing multiple checks that the cash went out, the cash went out, probably with multiple different checks here so in practice, if we're looking at the actual checks that cleared, then we would find separate checks on be breaking out at least food 10 suited for a separate check. So in any case, this has up to 15,007. 59 99. If we go back over here, here's the 7 15,059 99 That's our only payment for the third month. So here it is, over here. And if we add those two up, then we're going to say that the second month 16 080 point to one plus the 15 7 59.99 adds up to the 31 8 40 20 cents. So scrolling down, that's the 31 8 40 20 cents. So that supports the number that we put on the deposit side. So, in other words, we're telling the IRS, Hey, you know, we deposited this much. If you want more detail, here's the actual deposits we made. Here's the month we made them in. You should be able to see that on your side. If you don't see it on your side, let us know and we can then go back through and match this stuff up because on our side this if this deposit has cleared the bank, then we could be pretty clear that the that the iris has deposited it. And then the only question is, Well, if they deposited it and they say that they don't have it, then it may not be applied to the proper quarter. Meaning we might have put the wrong quarter up here and possibly they applied it to quarter four or something like that when we made the payment. And so then all we gotta do it, hopefully talk to him and say it's applied to the wrong quarter. Would you apply it to the proper quarter and everything should work out? That's common type of ah problem. 103. 125 Payroll Comp Problem October Payroll Register: in this presentation, we're gonna enter data into our payroll register for the third payroll period. That being October for our problem, it's gonna be the first payroll period for the last quarter, which will include October, November and December. In order to do that, we're gonna freeze the pains so we can see the data we are working on. To do that. We're gonna go up to a four cell A force will scroll all the way up cursor on a form. Then we're gonna go to the view, tap up top Windows group, freeze panes button and freeze the pain. Okay, so then we're gonna scroll back down now, now that we have no pain or or frozen pains. So we're gonna go back to the payroll for October. So we're gonna enter in this information again that we're going to the same information for the filing status and allowances, and from here going forward, we are, in essence, gonna have the same hours and overtime and just enter this a bit more quickly. We just want to get practice and show that there's a repetition for the most part and not focus so much on differences that could happen so that we can then get some data input in place and then move Teoh the year end information. So these air basically gonna be the same as the prior periods will just get practice and doing that's a little bit faster so that we can see multiple sections of data and see what repeats what differs. What we really want to watch out for when we differ is gonna be these caps. What happens to these caps after we have more payroll processes? That's really where you gotta be. Careful. So we're gonna scroll back up and we're gonna these they're gonna be the same the m and the allowances, Unless there's any changes than those will be the same. So unless anyone adjusted their W four information So I'm gonna copy that information right click. I knew what right Click was gonna or control see, and then scroll down and we're gonna put that and be 19 right click. And we want pace. Just the form just to ABC, Not the former dominicanpeso format. Anyway. Either one, whichever you like, And then we're gonna go to the regular hours, and that's gonna be we're gonna say is 1 63 and we're going to say that 25 is the rate for more regular pay. And no, this this shouldn't mirror. We're basically gonna be marrying what happened up here. That won't be the case when we have hourly employees. They may have different schedules that are buried from time to time or maybe very consistent, depending on our who we are working with. If we have salaried employees, it could be very consistent. So it just really depends on who's payroll we're talking about as to how varied their schedule will be for month to month or pay period to pay, period. We're now gonna have a very consistent schedule s so that we can just show the same data and put this date in a little bit more quickly and push forward with it. And the rates, actually, not 17 it's gonna be $25. Okay. And then as we do this, I'm actually gonna make this green too. So we'll make this all green so that we know where Which data said we're working on something. A highlight from beat 19 all the way over Teoh. Um, X 22 right click and make that green, so that when we when we go back and forth, will be able to see that we'll have to go back and forth a little bit more than the prior means registers as we'll see here. So then we got the regular pay, which will equal the 163 times the $25 rate. We're gonna go through this a bit faster. So if you want to slow down on a couple of these like the prior month's and will be much the same type of calculations, the overtime hours we're gonna say are three. The overtime rate is gonna be the 25 times 1.5% 150% equals the 25 times 1.51 point five or 150%. So, Tab, that's the 37 0.5. Now note because we're doing the same thing here. We could copy this stuff down because the rate will be the same and the papal will be the same. But we're gonna go through the calculations a few more times because this is where we really want to focus in on these calculations of payroll. So then we're gonna say the overtime pay will equal the three hours times the 37.5 G 19 times age 19 tam. Total earnings then, are gonna be the regular pay plus overtime. So total earnings equals the regular paying plus the overtime, and that will give us the 4187 50. Now, we got to go to the other types of earnings on and see if we hit the cap. It would differ if we hit thes caps. Now, I'm not worried about hitting the cap here. This employees not gonna get up to the 1 28 400 But we do have to worry about Fouda and Suta. So in other words, the OS de ir Social Security wages equals the same number. Remember that the O A S T I could differ from total earnings indicates where we have a pretax items such as if the group insurance was a qualified cafeteria plan which would be a Section 1 25 plan. In this case, we're saying the group insurance is not a section 1 25 plan and therefore will not be reducing the f i. T. income, federal income tax, Social Security or Medicare. It will, however, be a post tax deduction and calculated in the calculation of net income. Now the food toe. Although this numbers under 7000 we have to go to the earnings records the year to date earnings to see if this employee has already met that that food cap. To do that, we would go all the way over here. Scroll back up and we're looking for Anthony. More has earned over 7000. In other words, if we go to the food toe, it's already been completed. He's already at the food a cap, so we don't want to include any more food. So if we scroll back down to ever at the green area over here, we're going to say that photo needs to be zero. And if we put something in Fouda there, we're gonna end up paying fruit to taxes and will over pay food. And then we'll have toe adjusted and amend it. And then suit has the same thing. So suit, if we go over to the earnings records for this employee, throw up to the records earnings, we see that he's over 8000 here and we can see that he's over 8000 here. So it already he's already hit the captors. I'm gonna scroll back to the left. We're gonna scroll back down and say has already hit the cap there. So that means, in other words, no Suta Oh asd I wages. Now we can calculate our taxes is gonna equal We're gonna pointed to the osd I times 0.62 tab h I is gonna equal the total earnings because there's no cap Times 0.145 If I t, we would be getting from the tables here. And but now, since we have the same earnings going back here, I'm just gonna pick up the same earnings just because we don't want to take the time to go to the tables again. So we've already looked at the tables. It's the same earnings here, and that's one of the reasons will keep the same data. So we'll say the fighting I'm just gonna say is equal to the prior F i t. Because we have the same parents. Okay, got it. So now we're gonna go the group insurance is gonna be the same as the prior year. The union is gonna be the same as the prior year. It's not the prior year, by the way, Prior pay period prior month in our gaze. They for one gay. It's gonna be the same as the prior month. And then the net pay. We're gonna calculate, uh, so should be the same. It's prior month, too, but we want to calculate that that's gonna be the total earnings minus everything that were taken out of the total earnings to get to the net pay formula being equals s, um I'm sorry, No equals. And we want the total earnings minus s, um, double click the some function and will highlight the O A S D I to the 401 came, and it's gonna close it up. That's OK. Good. So there it is there. So 2052 30 ah, six cents. If we scroll back up, that's gonna be the same calculation as up there. Okay, so now we're going to go to the employer portion of Social Security, so it's gonna be the same, remember? But we're gonna calculated again equals the O A S T I wages times 0.62 h I is gonna equal the total wages times Ah, 0.145 tab. These two should match what the employer portion waas Fota equals the food, her wages, which is zero times point. Oh 06 And we don't need to obviously the former there. But it's nice to have the formula have everything in conformity. So if I was to copy and paste anything, it would be uniform even though it's gonna be zero. And we already know that suit is gonna be this Times 0.54 So there we have this. So let's go to the next Employees. Now we're gonna say we've got Cindy. We're gonna say Cindy is gonna be 1 61 hours rate 28 Multiplying this Adam and do this all with the keyboard rather than the mouth now equals going left two times to that 1 61 d 20 times going left once the 28th and then tab and then we're gonna go to one overtime hour. We're going calculate overtime pay all with the keyboard here, so I'm not gonna use the mouse at all. What is going to say equals left, left, left on the arrows to the regular pay in E 20 times, 1.5 time and 1/2 150% tam overtime rate. Then I mean overtime pay then will equal left left one. That one and d 20 times left. Once the 42 tam total earnings then will equals left, left, left, Left, Regular pay Plus left. Once overtime pay tab. So there's gonna be our total earnings now again, she's not gonna have Ah, Cindy is not gonna have, uh, any problem. We're gonna have a problem with her getting up to the 1 28 So it's gonna be the same here for OSD. I wages photo. However, once again, if we scroll over, we have tea. She's over under 7000 here, but we have to look a total earns to date, which is on the earnings records. Every school over here, up to Cindy, we see her total earnings over 7000 and she's hit both 7000 and 8000 for the food A and Suta caps. So we have no more food A or Suta wages, in other words, So if we scroll back over, we're gonna say Fota zero suta zero away SD I we can calculate now I'm gonna say equals Go left, left Left to the osd I wages times 0.62 Tam h im equals total earnings Left Left left Total Arendse Times 0.145 tam f i t equals the same as the prior period. Up up, up that to 35 tab I scroll back down. So weaken, just your data here. Group insurance is gonna equal up, up, up, up Samos Prior period for Cindy Tam. Uh, union dues up Samos Prior period 41 k equals up, up, up, up, up! Samos Prior period. Net check will calculate here, so I'm going to that. All with the keyboard. Now we're gonna say this equals Left, Left, Left, Left, Left, left, left, left! Total earnings minus s. Um, shift nine. There's are some function left. Left, left, left, left, Left! This, uh, deductions for security holding down shift now. Right, right, right, right, right. All the way to the 401 k and then shift zero. Close that up. So there's our our formula with just the keyboard. Now we'll do the O A s t I were gonna calculated again. Equals Is that the employer Portion? Left, Left, Left, Left, Left, left, left, left away! FBI wages Times 0.62 tam H I. Medicare equals left! Left, Left, Left, left, left, left, left, left, Left To total Earnings Times 0.0, 145 tab. Now, if you couldn't see that, I'm gonna hear it is here. It's also up here in the formula bar, so if you it so it's always there when we do the calculation. So this is gonna be 0.6 Food TEM. So equals Left, left, left, left, left, left, left! Food! Town Times 0.6 Tam Souter equals left. Left, Left, Left, left, left, left, left, left, Left, times! 0.54 Tap! Of course, those are always gonna be zero now that we've cleared the photo and Suta Caps of seven and 8000 respectively, Back to the next data. Next individual. Next employees. Jill, we're gonna say Jill, Same status. 140. The rate is 31. Most planets out equals left. Left times left. Once tab over time. Zero tab. Overtime rate equals left. Left. Left to the regular rate times 1.5 tab overtime pay then equals left left to the zero times left. Wants to overtime rate tab. Total earnings equals left, left, left, left in the regular pay times left ones the order and a tab again, we're ah, something went wrong. There is that Let's do that again. Equals you wouldn't be happy with that Left left to the 3 4040 plus left. Once tab must have multiplied that. Okay, so once again, we're not worried about Jill hitting this cap of 1 28 400 So the ASD I wages air just equals the same amount. 7000. Has Jill going over the seven and 8000 cap. We have to look at the earnings records. Let's go over the earnings records. We're gonna say you're looking for Jill over here. Two years, two. Here's Joe. So Jill is over seven and 8000 before this pay period and is at the cap for 7 8000 respectively. So it should be zeros for Jill, for suta and photo wages back to our green records. We're gonna say this is 00 away. SD I calculation equals left left left times 0.62 Time H I Medicare equals left, Left, left, left, times 0.145 Time F I t equals because we didn't make any change from last year. We'd have to get this from the table, But we're just gonna pull it from last year because it's the same income that 4 74 tam group insurance equals Samos Prior Tom, there is no, uh that equals for 41 K tab. And then the net check will calculate down here cause it's good times to do so equals. Left, left, left, left, left, left, left! All with a keyboard Here, left. There's our total earnings minus the sum s, um shift nine. Then I could go left. Left, left, left, left, Teoh, The osd I hold down shift, Go to the right. Right, right, right, Right. And highlight to the 401 k shift nine to close it up and enter. Okay. And then we're gonna do the o A S t i for the employer Equals Left, Left, Left, left, left, left, left, left! Osd! I wages times 00.62 Tab h I or Medicare equals left left left, Left, left, Left, left, Left To the total earnings times. You can see it up here. 0.145 one 45 Tam. I think that's OK. And it should be the same number. So it looks good. Fota equals Left, left, left, left, Left, Left, Fruita! Zero times 00.6 Tab equals suit M left, left, Left to suitor Times 0.54 Enter. All right, now we're gonna do this for one more employees down here. We're gonna go to Judy Jones, the owner here who is a salaried employee. So it's going to say salary regular pay 35,000 and month overtime pay. It's just gonna equal the same as the regular pay total earnings over time. I'm sorry. That's not true. The total earnings will equal the same is the regular pay. Now she were worried about her getting over the cap of 1 28 4 hundreds. Probably gonna happen. Maybe not this time, period. Let's go check. So if we go over, Teoh are bigger hair in the company. Jerry is at 70,000 so she's not to the cap yet. At this point in time, she's clearly over the 7000 and 8000. So she's hit the suit. 10 food it caps. So we're gonna go back over here and into this data. So still first for Social Security wages equals the same Suta or fota zero suta zero alway s t I is gonna equal left left, left osd I wages times 0.62 h I or Medicare equals the total earnings Times 0.145 tab F I t equals the same as last paper. Tam Group insurance equals the same as last pay period equals or tam, not a union workers and the 41 K equals the same as prior paper tam Net pay. We're gonna calculate once again, all with the keyboard equals Left left, Left, left, left, left left. Total earnings minus. It's, um, shift nine for the brackets left, left. Now we could do this faster by going to the left once and so starting from the end point holding down, shift left, left, left, left, left Going to the h I so doesn't matter if you highlight left to right or right to left. In other words, it's still the same. You can see the formulas The same. It's the squares, defined as in 22. Or it's a rectangle in 22 Colon s 22. Shift zero and enter. So then we're gonna go to always die for the employer Equals Left, Left, Left, Left, Left, Left, Left, left, Left, Left, times. 0.62 H I. Medicare for the employer Equals left. Left! Left, Left, Left, left, left, left, left, left! Left! Times, actually, not that one. We should be picking up this one. That's kind of important. Times point. 0145 Not important yet, but it will be. I want to be consistent. Tab and in Fruita equals. Left, left, left, left, Left. This number times 0.6 Suta equals left. Left, left, left, left, left, Left, times. 0.54 Okay, so there's gonna be our information for the pay period of October. Last thing we should probably do is clean this up and make it blue again. Now, I'm gonna just copy the formatting from this cell up here so that because notice we didn't keep the blue from last time on this blue, which is a different blue, so I'm gonna highlight that in a pan and make That's this color, which is one of our standard colors. So that one's always there. And then I'm gonna paintbrush to ungh green or other one. So I'm gonna highlight the whole thing, not just one cell, one highlight this whole group and then go to the home time. Paintbrush it, and then I'm gonna scroll back down, and I want to highlight this whole group said that the formatting not just the color, but the for formatting, for the whole thing is this is equivalent. So let me, then we have that. Okay, so there is that. 104. 130 Payroll Comp Problem October Earning Records: in this presentation, we're gonna enter the information from the payroll register to the earnings record for October, which is our third month of payroll. Our first month of quarter for so we're gonna stroll down. This is the data we want now to do this, we're gonna put this data from this register over and school into the right Teoh, Uh, the earnings record. And I remember what the difference is. The earnings record is an order first by employees, then by date to give that give the information by employees scrolling back to the left. Whereas the payroll register is in order by payroll period, then by employees giving the data in essence fight period rather than by employees. So that's gonna be our goal. We just need to flip that information over. So to do that, we're gonna first I want to freeze the pain. So you may have frozen pains already from the last time. So you may never have unfroze the pain, but just toe practises. In case you have, we're gonna go. We're gonna go up top to a three we want to be on. So a form view tab, Windows group, frozen pains, select and on freeze panes. Then I'm gonna scroll down to the current period we want. And it's gonna be important to make sure that we pick up the information from the current period because it's common to, you know, get a mixed up because they all look very similar. So in order to do that, we're gonna highlight or select should say select. It's the proper terminology it can't pay, period. And then once selected, let go right click And let's make that green selecting green. Let's try to make it a lighter green. This time it might be easier to see the numbers. I'll make it this green. Okay, so now we're gonna enter that data into our records here. So it's all formatted force already. We're gonna scroll up to October, so and we're just gonna copy that data over. So I'm gonna do that with a formula and a B six. We're just going to say equals holding down the left arrow, and I'm just looking for our green data. So I'm going down. Green data. Where's the green data? There it is. Anthony More. We're picking up this M in B 19 and enter so there it is. Scrolling up. There's RM. Now. I'm just gonna copy that across, and you'll just have relative references and copied all across. So I'm gonna do that with a right click and copy, and then I'm gonna select all the cells and blue next to it. And then we're gonna right click on it and paste it just the formulas We don't wanna pays total cause it'll it'll tell the formulas or the four matter all. Um, not the same. So we want to go to the formulas only. And there we have that. Now we're just gonna do the same thing for the rest. And again. Why are we doing this again? Because we have to tell our employees one how much they earned this pay period and how much we took from them and therefore what their net check is for this pay period and the cumulative year to date totals. So this helps us to generate that information. Okay, so then we're gonna go down to the next employees on, do the same thing. So then we're gonna be here. And this is the employees, Cindy. So we're in a B 13. Just gonna say equals Go straight holding down the left arrow to find our green data on the payroll register. Green data for Cindy. There it is in beaten B 20 and enter when a scroll right school up. And they were just gonna copy and paste the formula. So we're gonna right click on that, M Copy it. Select all the data to the right of it. Right. Click on it, Paste it formulas only. So now we have her team let of data up to the current time period, then Jill, Jack, Jill Jackson. So we're in a B 20 equals we're gonna scroll left. We're gonna find our green data for Jill Jackson here. Eyes her s for a single enter, and then we're just gonna copy and paste that data. Right? Click copy. Select the cell to the right. Highlight all the way over. Let go. Right. Click paced formulas only. All right, we get to do this one more time, and then we have to stop because that's all we got. So we're gonna be over here for Judy Jones in a B 27 equals Scroll into the left. Looking for the green data for Judy Jones. scrolling up. There it is. Green data, Judy. So there's the M and enter. And then we're just gonna copy and paste that across once again. Right? Click and copy. We're gonna select the cells to the right of it and right click and paste formulas only. Okay, so we're gonna make these a little bit larger, cause Judy's income is just too high for our the width of ourselves there. Okay, so now we can check our totals and just double check that everything's good. So to do the lazy check instead of checking each number, we can check total earnings and the net pay, which should cap recap, mainly everything. Thio, thio, You know, be a good check. So we're going to go check that over from our earnings records over to our, um, payroll register. So again, I'm gonna make these cells a little bit larger so that we can see everything. It's nice to see stuff. So here's our total earnings. 1 45 51 And our net check is, uh, this 83 a 6 76 So is that what we had here? All right, now we could do a formula as well this might make it a little bit easier to check, which means I want this number. I'm gonna say this number minus the net check over here, which should if it zero, they're the same right minus this number. And then if it zero, it should be the same. So that that formula is 80 34 minus t 41. And if we did that for the total earnings, which should be the same thing that checks the same, you would think total earnings would be the same. Equals total earnings minus total earnings over here. And that should be zero. And then we said, check zero check. And if you want to make him just for an XLT, I'm gonna make this little white if just for excel tip. If you want to make it a little fans here toe, make the worksheet, you know, give you an indication that would be maybe a little easier to read. You could go to these format. Have been using these a bit If you go to the style tools and you go down and say I want my check field Teoh, um, have rules. And if it's equal, Teoh zero then we wanted to be green. So say if it's equal to zero, we wanted to be green and then we can, we can say are conditional for name for Manning. We can say, if it's greater, then let's say one we wanted to be read and then one more time. Conditional formatting if it's less than one. Ah, what happened? Less than negative one should said negative one. Then we wanted to be to read, and that will make it pop a little bit. If especially, someone else's using it. You can say it turned red. That's not good, right? So if they haven't to, it would turn red. If it was negative one it would turn red. Should turn old negative negative to let's say it turns red. And then if it zero, then it should be good and that if you want to copy the format and you could go to the paintbrush and use that same here, so that should do the same thing. So if it was two or negative to rid, that's one way to format your check your check format cells, and then the last thing will do to set up for the next time is Teoh. Is Teoh undreamed in this area? So do that. I'm gonna use the paintbrush, so I'm gonna paintbrush September. I'm going to select the whole September area here, and we're gonna go back in the home tab, paintbrush it and then scroll back down and then highlight this whole area. And remember the paint brushes. Not paying. Brushing just the color. It's the whole format. See? So you want to make sure you don't just do one cell or else will change all the format? Just not just the color. All right, so that is that. 105. 135 Payroll Comp Problem October Journal Entry Payroll Expense: in this presentation, we will use information from our papal register for the month of October to enter the journal entry for October into the General Journal posted to the General Ledger and record the trial balance with it to make sure that we pick up the right information. We're gonna highlight this information green again. So gonna go down here? We're gonna highlight from B 19 all the way over, I should say, selected. Ah to the X 22 and then right click. And then I'm gonna make it green and then select this little pain and let's make it Ah, lighter green again. Let's go to the screen here. It's gonna lighter each time for some reason. OK, then we're gonna go back up top and let's freeze the pains. So I'm gonna put my Crystal Wright on a four. If it's not frozen already, I don't know why we keep on. I keep unfreezing the pain, but we're gonna go up top. We're gonna go to the view, Tam, We're gonna go to the windows, freeze panes and freeze the pain. Okay, then we're gonna scroll back down and this is the data. We will be working with. We're gonna enter that data into our journal entry tabs. We're gonna go to the second tab over here. We're gonna do some back and forth work between the two tabs. We're gonna clean this tab up a little bit. We're gonna either unhygienic or hide. Ah, what we need. So if anything is hidden in your town, what you want to do is select whatever sell. You can't up top and just select the whole thing. Just unhygienic everything all the way over. As far as you need to go, right click and then unhygienic anything that's hidden. Then what we're gonna do is just hide the cells that we need. So these two are for the first payroll periods. We don't need those now. I don't need those toe bother us right now, so we're gonna put our culture on the A and select all the way to the L. A. L let go and right click and hide. Then we don't need any of this data. We only need this data to enter this pay period. So I'm gonna put my cursor on the hour, drop down and select all the way to a C and then left. Click and hide. Okay, so this is gonna be our information when enter the data here. And we're gonna post that to the general Ledger on this side, which will generate the trial balance. Okay, there's gonna be three journal entries which will be one for the employees payroll to for the employer payroll taxes. And then we'll make the payment, which will be the last one on, and that will be on the 15th. So we're gonna process the payroll, pay a process it as of November 1st for the payroll period ending in October, and then we'll make the payment in November 15th for the with holdings in the payroll taxes . All right, so note that these air, they should look very similar now. And we could copy and paste the journal entries from the prior time period of Just changed the numbers, but we really wanted so just note the repetition there. So could you look at the prior papered for help? Yes, of course we could. This is accounting. It's very similar from paper paper it. But we want to regenerate these because these are things we want to think through. So first we're gonna deal with the payroll journal entry now cashes affected. But this is one time I'm gonna do that last cause we're really working down to the net. Check remembers that they're gonna be our goal. We're gonna start with the payroll expense, which will be a debit here to 502 salaries and wages. So we're gonna copy that, right? Click and copy. We're gonna go a bit faster here. Since we've done this a couple times, it'll be much the same as the prior transactions. So in five, we're going to right click and paste. 123 and then the amount is going to be from the register. So we'll go back to the register, and we're looking for the total pay. So here's the regular pay. Here's the total earnings. So we want to pull over the total earnings, so we'll go. I'm gonna do that with a formula. So we'll go back to the G l and I'm gonna put in soapy five equals and then go over to the register and we're gonna pick up that 48 77 50 and enter. Then we're gonna pull over all of the liability accounts that we withheld. So I'm gonna go back to the register just to see what we're doing. We're nearing this calculation, so we've got total earnings minus all these deductions. So we're marrying these deductions, so we want away SD i h i f i t group insurance union and 401 K Those Walt will all be represented by liabilities on our accounts. So we've got not this one, not the payroll we got PFI, kefir, osd I h I, and I'm gonna let go. Not Fujita and Suta. Those will be involved in the employer taxes holding down control. We want this 1 24 No, we don't want I'm gonna on highlight that. We hunt. I'm holding down control the to 25 for F I t. The 2 43 group insurance and the 2 45 for the union dues letting go of control, right click and copy. So we'll put that over here in six and in six in right click and paste and we want to paste 123 and then we just need to pull over our amounts so we'll put a cursor in q six and we're gonna change the sign to a negative. So instead of hitting equal, we're going to say negative and then go back to the register and we want to pick up this away S t I enter. Then we're on h I. We want to say negative. We're gonna go back to the register for H I this number and enter and then the f i t. We're gonna say negative, go back to the register for F i t this number and enter, and then the group insurance we're gonna say negative, go back to the register group insurance and enter and then union dues. I'm gonna put negative, go back to the register for his union and enter, and it looks like we're missing when we're missing retirement. So I'm gonna copy this one. I like that copy. Right? Click and copy. Well, pace that right here in in 11. Red click and paste. 123 And then we're gonna go back to Q 11 negative. Go back to the register and pick up the 401 k and enter. So now we have, of course, These are are the credits adding up 20,003. 72 27 does not equal the debit. If we select all of them, it adds up to what we need. 27 705 23. The difference which will be a credit. Now that should match if we go back to the register net pay, so that will equal the net pay. So let's do that. We're gonna see what I can do. That with a club formula, which is negative s, um, double click that some function highlight from the salaries and wages down to the all the debits minus the credit. All the deficit credits and enter 27 7 or 5 23 back to the earnings record just to double check 27 705 23. So back to the trial balance. Okay. And then so that's gonna go to that's gonna be the net check that were gonna pay. So I'm gonna take that out of the checking account so we'll highlight the checking account . Right? Click and copy. We're gonna put that in in 12. Right? Click and paste. 123 So there's our journal entry Now we're gonna post us The Geo will try to do this a bit faster. So these are all going to be in the same area. So it's gonna be easier. Find this one's gonna be all the way to the end because it's so it's 502 So it's gonna be our second ah, income statement accounts. So we're looking for 502 1st it's in order, assets and liabilities and then equity and then income and then expenses. So we're looking for 502 Here is our salaries and wages and B m 20 11 1 is the date and in B in 20 I'm going to say equals, I'm just gonna hold down the left arrow, which will take us all the way over and scroll up to that 48 77 enter. So there's our amount. Our wages are expenses went up from 96 9 73 50 by 48 77 50 to 1 45 51 And of course, our it's exactly the same because we're mimicking the data from payroll to payroll at this point. So we're gonna scroll back over, and that's gonna be our 1st 1 Now for the rest of them, I'm gonna freeze the pains so that this side will remain here every time we scroll over To do that, I'm gonna go to sell a D one. I'm gonna go toe freeze panes and freeze panes. So then I'm gonna scroll over. I'm gonna find to 15 and we'll just find all of all of these liabilities that's gonna be down here. And they should all be pretty close to each other, so I'm not gonna go back and forth. In other words, this timer is gonna go school this way. We're looking for 2 15 There's 2 15 here in a as 12. We're going to say 11 one the date and then in a T 12 equals point to that 9 2080 81 And there it is. Then we're looking for to 20 so it's gonna be the next one. So to 20 is here in a W 12 as of 11 1 and then in a X 12 equals that 6 97 12 and enter then for looking for the to 25. So we're at 2 20 to 25 should be around here somewhere. We have to skip a couple. It's gonna be to 25 years. So to 25 b e 10 we're going to say 11 1 in the F 10 equals and we're gonna point to the to 25 which is that eight 404 13 and enter. Then we're looking for 2 43 So 2 43 looks like it's underneath hair to 43. I'm on B E 23 11 1 tab. The F 23 equals scrolling up a bit to that to 43 at 5500. So there we have that. Then we're looking for 2 45 2 45 It's here school to the right, 2 45 11 1 And we're gonna say this equals Here's the 2 45 or picking up that 16 bringing the bounce up from 32 by 16 to 48. And then we have the 2 47 so scrolling down here the 2 47 as of 11 1 So and so B J 23 equals the 2774 20 enter and then the checking account. Here's the checking account. That's gonna be our first accounts. If I put my cursor right to the left of the highlighted cells and go right. We're going to the checking account, which is here on a K 10 11 1 threat. 1 11 1 We're going to say this equals that 27 705 23 and enter bringing the bounce down to 4 82 902 We can see that then on the trial balance here. So if you go back to the trial balance, here's our information on the trial balance. If we scroll back down, we can see now that these totals have pulled over, now we owe 29 80 81 6 97 8004 04 f i. T. And the group insurance down the retirement. We also note that the salaries expense has going up here. So we owe more for the salaries that brings net income down and are debits. Minus are credits are zero meaning debits do equal the credits at this time 106. 137 Payroll Comp Problem October Journal Entry For Payroll Taxes: next journal entry. We're going to say that we're gonna pick up the the employer taxes. So if we go back to the payroll register, we want to pick up this information now the employer taxes away. Stith, I've food test suta. These two are matching. So we saw that as a deduction in the employee section. These two are employer taxes, only federal unemployment, state unemployment. So we'll pick up these numbers back to her. Our journal. So we're gonna say that in essence, we need to pick up the 2 15 the faker men, the Medicare, the food A and Souter. So these are the ones we want when a highlight those air, select those right click and copy those. We'll put that underneath the date here cause they're gonna be credits. So it's an end 15. Right click and paste. 123 And then the Deb, it's gonna go on top. And the dead. It's gonna be the payroll taxes. So 5 20 year, right click and copy. We're gonna put that up top in in 14 right? Click and paste. 123 Don't make this a little smaller. Okay? So now we just need to pull this information. I pull this information for all the credits, and then the debits will be this some off them. So we're over here in Q 15. Instead of flicking equals, we're gonna put negative in order to flip the sign. And then we'll go back to the register here and we're looking for the O A s T eyes. That's the one on you. 23. Enter next one were in ah fi ca h I and that's ah, the Medicare equals or negative not equals negative. And then scroll back to our register. We're picking up the h I. The 6 97 12 Enter now the food and Soutar zero. So I'm just gonna put zero here, and I'm not even gonna post these. I just want to show that this the symmetry in the journal entry to show them here and and note that they're going to be zero. So note the difference in our journal entry there. Okay, so then we're gonna add these up and they add up to 3006. 77 93. We're gonna put the debit there. We can do that with our plug formula, which is negative s, um, double click the some function. Gonna move this out of the way. We're gonna highlights that information. So there's our debit. So there it is. So now we'll post of this out. So we're looking for 5 21st That's gonna be on our income statement. Here's 5 20 The filtered income statement accounts. If we go to the General Ledger over here, we've got the assets. We've got the liabilities. Then we've got the income statement accounts were looking for 5 20 5 20 Here we go. So it's on B Q eight, 11 1 and then B R eight equals. We'll scroll down just a bit and we want to pick up that 6 3077 93 bringing the bounce up to 6 12,077 53 weeks ago. Just well, let's go figure to the left of the frozen screens and then click. Right then that balance should be here is well, then we'll post both of these a same time or without going back to the trial balance. So the 2 15 to go to the right to 15 of course, is going to be right here. So if we go to the right, we're looking for 2 15 Think it's gonna be up top? Here it is. 2 15 And now we're on 11 1 again. So to 11. Once we got the same amounts gonna be here again. We're gonna say this equals and make sure we're picking up the right journal entry. We don't want this number up here. You know, it'll be the same. We want this number there. So we're picking up that 2890 and enter. It's actually 2980 and then we're going to the H I, which is to be 20 so to 20 it's gonna be right next to it. So here it is on Ah a w 13. We're going to say 11 1 and then in a x 13 we will say it equals and point to that 6 97 12 and enter so that we have that bringing the balance up here. And I won't post these two because once again, it doesn't look like obviously, there's nothing there on those too. So we're good there. And so if we go back to our balance going to the left of the of the, um, frozen screens and then going down, we see that we should be back in balance here. The effect on net income being the payroll expense portion at this point in time. 107. 140 Payroll Comp Problem October Journal Entry To Pay Payroll Taxes: we've got these liabilities now that we're gonna have to just pay at some point, we took these out of the payroll check and or that's our payroll liability, which we now will have to pay. At some point, we're going to say that we're gonna pay it on the 15th to remember the payroll ended in October, and then we paid we process payroll November 1st, and now we're going to pay it on 11. 15. So we're basically going to make this payment for Ah, these amounts here. So what we're gonna do is we're gonna take all these amounts that we Oh, we're gonna make the payment for them. So that includes the the not the payroll tax, the to 15 the h I. There's nothing in food 10 suited because those who have been totally the cap has been reached. So therefore, we don't know any money for I'm holding down control on letting go here. I'm holding down control and then highlighting the f i t. And that's all we need. The f i T should do it. So we're gonna copy that. I'm letting go of control, right? Click and copy. And that's gonna go in in 20 right click and paste. Ah, 123 Values only. So that's gonna be what we have now. I'm just gonna pick the exact same numbers up here over here in our journal entry. So we'll put a cursor here in Q 20 and we're picking up this number, so I'm just going to type it in their negative. 5961.61 Then we're picking up this number for H I. So here's h I were picking up this number. Negative, actually. I'm sorry. These should be debits. It should be debits. So I'm gonna have a debit side, because we want to make this go down to zero. So we're on the debit side, and this is gonna be 5961.61 for the pika security. Medicare is gonna be 1394.25 and the f I T here will be 8404.14 So that's what we have there. And then we'll sum that up, and that's gonna be the cash that's going to come out of cash here, So we'll be in Q 23 negative s um, are are plugged formula that some formula double click the some highlight thes cells and enter. So that's gonna be this total that's coming out of cash. But here's cash going to right. Click on that copy. Scroll down. That's gonna be in in 23. Right? Click and paste. 123 Okay, so now we're just gonna post this. So here's to 15. Here's to 15 on the trial balance is gonna be the third account. That is a liability. So here's assets and liabilities, and here is to 15. So we are on 11. 15 is the date, and we're in 80 14 equals. We're gonna point to that 5961 61. And that's gonna bring the balance back down to zero. So note the pattern here. Employees portion employer portion paid. Both employees portion. Employer portion paid. Both employee employer paid. Both. Okay, then we're going to the same for the H I, which is 202 20. Account to 20. So here is a count to 20 were going to say this is 11. 15 and then we're in a x seven a x 14 equals and will point Teoh this? Ah, 13 94. And that will bring the balance back down to zero again. These are the FICA taxes, same pattern and Floyd portion, employer portion paid, both of whom employees portion, employer portion paid. Both of employees. Portion employer portion paid. Both of them. Now, we don't have anything in the h I or I'm sorry, the food or the suit so we can just go Teoh our trial balance over here and click to the right a few times to get to the trial balance. And we're out of bounds by that 3 7055 because we need to record the to 25 for the, uh uh, f I t that scroll back over to 25 f I T f I t 2 to 5 those 2 to 3 to 25 So this is on 11. 15 to 25 or in B F 11 equals, they won't scroll back down. Remember to be careful on which which number we're picking up here. We're on the correct journal entry down here. Hopefully have picked up the correct journal every every time. And then we've paid that off, so it goes back down to zero. And this one, of course, on Lee has an employee portion. No employer portion paid off. Employees portion. We paid it off. Employees paid it off. Okay. And then we're gonna go Teoh the cash account. That, of course, is our first account here. So we're gonna go to cash. Here's cash is gonna be on 11. 15 a. L 11 in a l 11. We're going to say equals Scroll down just a bit. Pick up that 15 7 60 and enter. That brings about from 4 82 902 down by 15 7 62 4 67 1 42 05 We should see that, then on the trial balance here as well. And if we scroll down, we can see that we're back in balance. Green zeros and net income not affected by this last journal entry. No income statement accounts. It's just like paying off accounts payable with paying off on account. And it brought down all the payable accounts. So this one went down 2000 We don't know anything there anymore. We're not paying off the group. We're not going to deal with the group insurance UnionPay able those, we're just gonna go up on the liability perspective. And then, uh, we're not focusing their when we're doing the payment methods because those could differ depending on the group insurance that we have And how are paying out that wind and how we pay off the group insurance and the union. The union dues would obviously pay the union retirement plan. We have to set up what you know, the retirement plan and make sure that we have the contributions made for future obligations there. 108. 145 Payroll Comp Problem November Payroll Register: in this presentation, we're gonna enter data into our payroll register for the month of November is gonna be similar to the prior time periods, and therefore we're gonna answer this a bit faster, So we're gonna enter the data into November. We're gonna copy and paste it some more of the data representing the fact that it will be repetitive for the most part. Although we need to be very careful on certain things that will change from paper to pay period, which is where we will spend our time, including the OSD. I wages the food to cap in the suited cap. Gotta be careful on those. Okay, So if the screens are not frozen, we're gonna freeze the pains first. So we're gonna scroll up top, and then we're gonna put our cursor in a four. So we're in cell a four, Then we're gonna go to the view tab, We're gonna coated the Windows group, and we're gonna freeze the pain selecting freeze pain and freeze panes. Now that the pain is frozen, it will be a little bit easier toe work and we'll scroll back down. Hopefully it will. That's the point. We'll throw back down to November here. So here's our November data. We're gonna pull some of this data from the prior time period, so I'm gonna scroll back up just a bit. We're gonna pick up the filing status and number of allowances. Those air pretty commonly the same. So we're gonna just copy those right click, copy, Scroll. Back down. Right click paste. 123 When what they differ. By the way, if someone changed their W four information now we're going to say that the pay period is even the same for these four employees. Meaning when we have a very standardised pay set, were going to say that they worked 1 63 hours again. So I'll copy that, even these hours, and we're also gonna copy the raid. So I'm just gonna copy this whole thing. So we're gonna copy the hours and the rate we're going to see the hours will be the same, right? Click and copy. Now again, it would depend on what type of employees we have to see if the rates would be much the same from paper and pay period. Some. Sometimes they are very similar, especially if they're salaried employees then they will be. And sometimes they very greatly, so it just depends. Um, what industry were in? We're gonna right click in D 26 paste. Ah, either way should work. 123 or not. I'm gonna re calculate the regular pain and the overtime pages to practice that. So we're in F 26. We're going to say equals left, left the 163 hours times the regular pay into then in F 27 equals left. Left the 1 61 hours times the regular pay enter. And then in F 28 we're going to say equals left, left the 140 times their regular pay and in terms. And then the regular pay for Judy, remember? Is 35,000. So there's the 35,000. The overtime hours we're going to say are the same as the prior pay periods. I'm just gonna copy the prior pay period. Read. Click. I should right click and copy. You can also use control, see and go down here to G 26. Right click and paste. Ah. Either one should work. 123 or normal. Then we'll calculate the overtime rate, the overtime rate, which will equal this 25 e 26 times, 1.5 or 150% 1.5. And then the rates for Cindy will equal the 28 times 1.5 150%. And then the rate for Jill will equal the 31 times 1.5. And then there's no rate, of course, for Judy. Then we'll go to the overtime pay, which will just equal the three hours times the 37.5 in terms and then for Cindy equal the one hour times the 40 to enter and then for, uh, Jill equals zero times the 46 50. Then we don't have anything for Judy Jones. And then total earnings will be in J 26 equals the regular pain, plus the overtime pay enter and then for Cindy equals the regular pay plus overtime pay. Enter fours. Jill equals the regular pay plus overtime pay. And for Judy will equal just the 35,000 salary pay. Okay, so now we're in the O A S t I. Now we need to check these because these could defer. Now we don't have to worry about these three going over this o a S t I. It doesn't look like they're gonna make over 128 4 But Judy made I mean, this, like that's Judy, right? That's Judy. Yes, she may. So we had to check that one for sure. So these three, I could basically say this will be the same. This will be the same. This will be the same. This one could differ. I want to check her earnings records. So we're gonna go over to the right earnings records and see if she's over that limit. She's currently at 105 so not quite there yet. So this Ah 105 Which means then let's do some math here. If we take the, uh 1 28 4 minus the 105 there's only 23 4 to get to the cap of 1 28 4 eso. Therefore, we we need Teoh record just that 1 23 4 to get up to the cab. And we can't record the full 35,000. So this is where we really have to be careful not to miss that or will over withhold both on the employee and employer portion, so we'll scroll back over. And so this is where we hit that cap. So we're going to say that this is only 23 4 and so that's that's important to note the food A and suitable for all employees. If we go tofu, tha and Suta, they should have hit this already because we're past that point in time. So in other words, there, over the seven and 8000. And they're both, uh here. So we've got to seven and 8000 over the 7 8000 here. Here's this over that. Here's the seven and 8000. Here it is, and we're over there. Okay, so there's zeros. In other words, for Fota and Suta across the board. 00000 There and same here. 0000 and zero. Then we have the o A S t I. Which is gonna be this column times 00.62 So this equals Left left left. This column times 0.62 Same for the next employee equals this column Times 0.62 equals this column Times 0.62 equals this column Times 0.62 And there we have thesis. Oh, Shil Security with H. I or Medicare. We're gonna just say this equals. I'm going to scroll all the way to the total calm Times 00.145 We'll do the same thing for the next employee. This equals all the way to the total column Times 0.145 Same thing here we're gonna say equals all the way to the total column. Times 0.145 and one more time equals all the way to the total column Times 0.145 Now we can copy and, um, copy and paste, which will do next month. But I just want toe calculate their formulas at least one more time. And then the f i t we're gonna say is the same because we had no changes. These would come from the table. But we're going to say this is the same as the Trump Prior period because the net income is the same. So it equals the same as the last. A month equals the same as the last month, which is the last pay period equals the same as the last month, which is the last paper in equals, the same as the last month, which is the last pay period for all of them. So here's what the F i t the group insurance will be the same. So the group insurance equals the same as the last month equals the same as the last month equal the same as the last month and Samos the last month for the four individuals. Same for the union. We're going to say this equals the same as the last month and equals the same as the last month. For one came we're gonna say equals the same is the last month as well as the second employee. Same is the last month. Third employee. Same is the last month and the last employee saying is the last month. Then we'll calculate the net pain so net pay is gonna equal. We're gonna go all the way over to the total earnings. I'm gonna do this a couple different ways this time. We'll do that the long way. First, minus the O A S t I minus h I minus f i t minus the group insurance minus the union dues minus the 41 K Now we'll do our some function within this formula. For for the second way, we can come to the same type of calculation equals all the way over to the total earnings minus the sum shift nine. And we're gonna go all the way over from left to right this time that in 27 Social Security hold down, shift and go right to the 41 k and then shift zero to close it up. Similar formula we're going to say equals same formula, Similar way of of doing it going all the way to the total earnings minus the sum s, um, shift nine left ones. Now we're just gonna go from left to right. Hold down. Shift left to right. To the O A S t. I close it up all the same way to get the same calculation tab. This third way is the fastest, and the fourth way will be the fastest of all. Which is just to copy the formula down. I'm just gonna put my cursor on the auto, fill here and just drag it down. That's what we'll do most the time next month. And that, of course, will give that same formula. And it'll it'll change the relative references, which is very nice. Okay, so then we're gonna go over to O a S D I Same thing we're gonna say this equals Roll over to the O A S T I wages times point of six to equals Scroll over two The O A s T I wages Times 00.62 equals grow over two The O A s T I wages times 00.62 equals scroll over two The O A S T I wages times 00.62 That too we could copy the formula down as well. Due next month H im equals Gonna scroll all the way to the earnings Times 0.145 You can see the calculation up top here Enter equals all the way over to the earnings for the next employee Times 0.145 Enter equals all the way over to the earnings Times 0.1451 more time equals all the way over to the earnings Times 0.0! 145 and into now Suit food! Tim is gonna be zero for all of them. So I'm going to say equals. Go to the future wages Times 0.6 and I'm gonna tab over and I'm gonna do the same thing for Suta. And then we're gonna copy him down. I'm gonna say equals the suitor wages. So Suta, times 0.54 and then we'll just copy these down will be zero down across. I'm just gonna highlight Thies, too. Put Mike Restaurant auto fill, and then it's Copy that down. That's a big, quicker way to fill out this data. 109. 150 Payroll Comp Problem November Earning Records: in this presentation, we will fill out the earnings record for the month of November from our payroll register to the earnings record the month of November being down here note that we have frozen the pains. So if, uh if you haven't had the pains frozen, you can freeze the pains by going to a four. You tam Windows group free Spain's. So we're gonna scroll down to the data that we want to implement, and that's gonna be down here in November. We're gonna highlight this information so that we make sure to pick up the correct month. So I'm gonna highlight this whole thing and down here, and we're gonna right click on it and let's make it to green. I'm gonna make it this light green this time, unlike in the light green. So we want the green ones and then we're gonna go to the right and we're just gonna enter this data. Remember what we're doing here. This is the payroll register, which is an order by pay period and then by employees within the paper in, and we want to go to the earnings records and kind of flip that around the earnings records being in order first by the employees here and then having the pay periods. So we're gonna scroll up top. Our first employees gonna be Anthony, and we're going to save the filing. Information will hear filing status first. Now note all the information will be the same. Why are we doing this? Because we need to tell our employees, amongst other reports, for our own purposes. That what their total earnings were for the pay period as well this year to date. So this gives us the this summary of what's going on for an individual employee year to date. Okay, so let's do that. We're gonna be here in a B seven. I'm just gonna say equals. We're gonna So I'm just gonna hold down the left arrow till I get to the end, and then I'm going to scroll down looking for the green data. We need the green data, which should be November data. There it is. November data. We're looking for Anthony More want to pick up that emits n B 26 enter there. We add it. So I'm gonna scroll up just a bit. There's the information B 26. Now we're just gonna copy that across. We're not gonna auto fill because that will change the formatting. We're just going right click and copy and then heil and then select the cells next to it. And then we're just gonna right click and paste. The formula is only just the formula, and, ah, there's a problem with the clipboard, But it seems to have done what we asked. So I think we're good. So now we have the net pay here, and we have to growth pay and all the withholdings for both the pay period as well as the totals. We'll do the same thing now for Cindy Lewis. So we'll be down here in a B 14 within a B 14. We're going to say equals, but ah, hold down the left arrow till we hit the wall, and then we're gonna go down to the Green Data Korean data. We're looking for Cindy Lewis. So there's Cindy Lewis. We're gonna say, pick up the marital status and enter there we have it. Now we're just gonna copy and paste that across the rest of the data. So my crystal on a B 14 right click and copy gonna select the data to the right for the place where we want to put the data, I should say. And right, click and paste. Uh, just the formula. I So there we have that. All right. And now we're just gonna continue this process for Jill Jackson. So we're down here in a B 21. We're going to say equals in the scroll to the left to find our green data looking for the green data scrolling down. There's green data. There's Jill Jackson. There's the single status that we're looking for him, we will say equals Scroll up just a bit and we're gonna copy that. Right? Click and copy. Select the blanket cells where we want to put the data to the left and right. Click and paste the formulas only. All right, we get to do this one more time than we have to stop, because that's all the employees we have. We're currently on Jill Jones. Jill Jones were in November. We're going to say equals scroll left to that green data that we're looking forward. Green data, green data. And here we have the Green Data M for Joad Jones and enter. So there we have it. Now we're gonna copy that formula I and paste it to the right. So right, click and copy. Select the cells to the right where we want to paste the relative formulas. Let go, right click and paste. 123 Then we can double check our totals down here. We're gonna have to make. I'm gonna make this a little bit larger so we can see your data. It's nice to see the data. Gonna highlight these two. And make that a bit larger. See the data? May we have it? And then if we scroll down our green zero's air Nice little green zeros we did last time. It will tell us that our total earnings here match what we have on the earnings records to the payroll register. But let's just double check the two best once checking It's a total earnings or 1 93 1 28 50 and 112 101 So this is probably the best number to check, So I'm gonna go back over here and scroll down our totals down here. Also need some whitening of the columns. Let's do them. And then here's the 1 12 1 a one so same data formatted a different way 110. 155 Payroll Comp Problem November Journal Entry for Payroll Expense: in this presentation, we're gonna take the payroll data for the month of November from the payroll register and create a journal entry in the general journal Post to the General Ledger and create the trial balance. So to do that, we're gonna We have the frozen pains here, So if you're pains aren't frozen, you'll want to freeze them so we can work more easily. So that's gonna be up here. You want to be up in a four cell a form, we're going to go to the view tab. We're gonna go to the windows and freeze panes. So then we can scroll down and we're going. Teoh the November I've made it green here just so we can work with these numbers. Did not get confused on them, hopefully or get less confused. And so we're gonna go through this tab now that g l to have the trial balance tab. Now, once here, what we want to do is make sure that we're have the correct area to enter the data and you can see that there's gonna be some hidden cells the way I have mine set up. So far, I'm gonna first unhygienic all the cells and then we'll hide the cells that we don't need to be looking at. So I'm gonna put my cursor on anywhere outside the highlight details. And then I like the entire column and then highlight all cells and then right click on the selected should say selected area that highlight it selected area, and we are going to a new hide. Okay, now, there also may be frozen pains. So if something doesn't work quite right for you, you may have freezing frozen the pains before which would be in the view tab windows and frozen pains. We're gonna want to unfreeze the pains so the pains must be unfrozen before we can freeze it back up again. So now we're gonna try to do this a bit faster, and this will be to show us that you know that the journal entries they're gonna be much the same for a month, a month. So we're gonna do this month, and we're going to say, Hey, you know what? The format, if we look at the last few months, are pretty much the same right? The numbers could change and will typically from from payroll, the payroll Of course, we're using a very symmetrical payroll system, you know, same amount of hours. So our first calculation is different than the second. But the second and third are pretty much exactly the same. So I'm gonna at least copy the formatting and say, Well, hey, you know what I can copy? Pretty much all of this when a copy from here down and say that journal entry will look pretty much the same. And then right, click and copy that. And we're gonna put that in cell T five, right? Click and paste way. Either way will work. I'm gonna go 123 All right. And then we're just gonna pick up the numbers, which will probably pretty much the same as well. But I want to make sure to pick up the numbers from the correct register from the correct papered, because typically those are things that will change. The accounts affected typically will not so know what you can typically do from period to period is construct the journal entry in much the same fashion. Then pick up the new numbers from the new pay period register. Now that we have that set up, I'm gonna hide all these journal entries to the left. So I'm gonna put my cursor right on the are here with you had to drop down and then go all the way left, Left, left, left, left, left. And then there's selected sales and right click and hide. All right, then we're gonna do the same for the data on this side of the lines. We're gonna put a curse on the X. So it has a drop down and want to hide that. And I'm gonna hide all the way till a C and I want to keep a d to have that nice little space there. So we're gonna right Click on that and hide. Okay, so now we have our data sheet and we even have our accounts, so it's gonna be much the same. It's gonna have one journal entry. That's going to be the recording, the salaries expense, then the payroll taxes for the employer abortion. And then we will actually pay off the liabilities that we have created on the 15th of the month. So we're gonna pick this up from the register, So we're in V five. I'm just gonna say equals Go back to the register and we're picking up this cell in J Ah, 30 J 30 and enter. Now we're gonna pick up all of the taxes. I'm gonna do that with a credit. So instead of hitting equals, we're gonna say negative and we're gonna go back to our register and pick up. I'm gonna go to the right a little bit, so we want to pick up everything under, kind of like the red area. So here's the O A S T I enter. Here's the h I. We're gonna say negative and go back to our register, Pick up the H, I've And that's Medicare, of course, and enter. Then we're gonna go negative for the F i T. Federal income tax back to the register. Federal income tax, F I T enter and then the group insurance. We're gonna say negative, go back to our register group insurance and enter. Then the union dues were just going to say negative, go back to our register union dues enter, and then the retirement plan. We're gonna say negative, go back to our register and for one K plan, and then we have the check that we're gonna have Now this? Of course, we could take from the register going back to the register. That 28 4 24 But I like to use the kind of plug formula here that debits minus two credits and then note that it should be equal to the net. Check in essence, re calculating the net check. So we're gonna These are pulling formulas and how I call it the negative s, um, double click the some function and highlight the debits and credits in this journal entry and into. So there's the 28 4 24 43 If we go back to the register, there's the 28 to 4 24 43 net check Looks good. Checks out. Let's post. I know that it's also imbalance if you highlight the whole thing. That debits minus the credits equals zero. Okay, so we're first gonna look for this 50 to 502 on the tryout balances down here. It's gonna be in the income statement. Dark blue accounts, same order on the general ledger. So we're gonna scroll the right. We've got the assets. We got the liabilities. We've got revenue and expenses in the dark blue. We're looking for salaries and wages Expense right here in the M 21. I'm going to say that date is 12 1 No, I didn't freeze panes. So now we're just going to say equals. And if you can't freeze the pains if it's locked or something like that, just the best way Do I think it's just a hold down the left arrow? Or one way you can do is hold down the left ever to hit the screen or just pull this all the way over, take it to the end, and then we just need to go up to where we want and pick up that number that we want fought five over to. To do that, you kind of have to memorize that you're looking for account. Find out to Okay, so then we have that, and it brings the balance up. Teoh 1 93 1 28 Ford 50 for the payroll expense. If we scroll back to the income statement, we can see that that has increased here. And that will, of course, bring net income down. Net income starting at that 500,000 before all this transactions and note. Of course, there would be other activity Cohen on other than payroll during the year. But we're just showing some income so you can see what will show on the income statement and what What? Um, we'll show on the balance sheet so you can see that distinction as we go through the year here. So that's 500,000 is the only other activity other than payroll that we have right now, just so we can demonstrate the net income decreasing over time due to solely concentrating on payroll. Okay, so now we're gonna go back up, and we're gonna freeze the pains for the rest of them. So we're gonna go up, and we're gonna make this less painful by freezing. The pains were in So 80 to 82 we want to Then go to the tabs up top in the view tab. Then we're gonna go to the Windows Group and we want to select the freeze pain. Then we're gonna sick, select the freeze pain, and there we have it. Now the pain should be frozen, and we're gonna go to account to 15 to 15. It's here on the trial balance. Gonna be in the same order on the general ledger. So we're gonna scroll to the right. We're looking for accounts to 15. There it is. 2 15 We're gonna scroll down to A S 15 date, 12 1 were in 80 15 equals and we're gonna point to w six that 2000 to 61 61 enter. That brings us up to 2000 to 61. 61. Now we're looking for 2 20 which should be a pretty close threat next to it. So I'm just gonna post them all out here before we go back to the trial balance and check it going a little bit faster here. So we're gonna say this happened on 12 1 as well, and we are in cell. A X 15 equals, We're gonna point to the 6 97 12 and enter. Now. We're looking for F I t to 25. Also a liability. Also in the orange area here to 25. Looks like it's over to the right. So it's I'm in b E 12 date 12 1 Then we're in b f 12. We're going to say equals and point to the 8004 04 13 bringing the balance up to 8004 04 13 . Then we're looking for a count to 47. 2 47 is gonna be to the right, it looks like. And possibly down a bid. Yes, there it is. So we're down here and be I 24. We're gonna say the date of 12 1 and we are now in B J 24 equals, and we're gonna scroll back up and pick up that cell in W 11. Enter bringing the balance up from 8003. 22. 60 by 2007. 74. 20 to 11,096. 80. Then we're gonna go to the checking account, which is their count 100. That's gonna be away on the other side. So I'm gonna put my cursor right on the left side of the frozen pains and scroll. Right, And that'll Pappas back over to where we want to be. And we're looking for the checking account. The first account. We're here in a K 12 date, 12 1 a. L 12. We're going to say that equals and point to the checking account in W 12 that bringing the balance up from or bringing the panels down from 4 67 1 42 Old five by 28,004. 24 to 4 38 7 17 62 Okay, lets see if we're in balance. I'm gonna put my cursor right to the left side of the frozen pains and school. Right. Scroll down and see if we have our in balance. We are not missed. I have missed something. All right, let's see. 55 16 is what we're out of balance by. Okay, so we're obviously missing these two accounts. That was done intentionally. In order to see how the double entry accounting system works. I'm gonna highlight those are gonna make those a different color now, just Teoh, um, show what they are in the reason of way I found that out pretty quickly. Is one. I should have recognized that. Number 5516 And then I went through here and I traced where these accounts are going. I could see these. They're going somewhere by using these icons up top. You can get those on the data tam or the formula tab. And here they are, so I put him in the quick toolbar. But if I traced to, I could say, Let's go in somewhere that's going someone that's going somewhere. This isn't This isn't and those are the problems And then you can kind of remove those arrows. And now we can finish the process that we're looking for a to 43 account to 43 screwing to the right. We have to 43 group insurance scrolling down. We're going to say on 12 1 Ah, so B F 20 form equals scrolling up just a bit and picking up that 5500 01 Then we got the last one on 2 45 So we're gonna scroll up just a bit Tears to 45 Union dues B I nine. We're going to say 12 1 and then n p J nine equals and we're gonna point to that 16 and enter. That brings bounce up from 48 by 16 to 64 for butter cursor right to the left side of the frozen pains and go right just bit. We'll see that those two accounts should then have been input as well. We should be back in balance as we are there. So, uh, accounting system was working again. That's good. The debits minus two credits on the income statement. Net income went down by the wages. The other portion went to the liabilities accounts. Here are the liability accounts that have been affected, which we will then need to pay fairly soon. 111. 160 Payroll Comp Problem November Journal Entry for Payroll Tax Expense: we're gonna record the pay roll. Ah, liabilities for the employer portion as well as the payroll taxes for the employer portion . I'm gonna make these ungh Rinne again. So I'm gonna do that with the paintbrush. So I'm gonna highlight the whole row above it, because I wanted to look like that room going to go to the home time going to go to the clipboard group and the paint brush within the clipboard group, and then highlight thes cells that we want to reformat. All right, now we're on 12 1 whore on the payroll expense. The liability portion. So if we go back to our register, we have mimicked this part of it to the paycheck. Now we're going to this part of it. The employer taxes, including, uh Oh, ASD eyes, Social Security, H I, Medicare food, a federal unemployment and suta state unemployment. Now, these two, of course, are we've seen before because there's 1/2 taken out of the paycheck, 1/2 paid by the employer. These two we have not seen in the prior journal entry because they are employer only taxes . So we're gonna scroll back Teoh, or we're just gonna click back to our to the tab of the G O. And we're just gonna pick up. I'm gonna pick up the liabilities first, and then the expense will be the sum of those liabilities. So we're in w 15. We're gonna say instead of equals, because it is a credit, a negative, and then go back to the payroll register and we want to pick up the O A S D I in you 30 you 30 and then we're in on W 15 w 16 negative and then go back to the register and we're gonna pick up the 6 97 12 And then there's nothing in suta our food food to our studio because those air typically things that will run out on no more pat taxes be do after the first few papers because of that low cap. Okay, so now we're going to the negative some plug formula to get the debit, which will be the payroll tax expense. So do that. Will say negative instead of equals s. Um I'm gonna do it all with the keyboard this time, so I'm gonna click shift F nine down arrow. One time shift right down, down down and we could close it up with shift zero. So if you use the keys, the keyboard, the more use, the keyboard, the more geeky you are. Which is, of course, a positive thing. So now we're gonna go Teoh 5 20 is our account. 5 20 will be down here in a way, down towards the bottom of the trap pounds. Same order for the General Ledger. So we're gonna go to the right. We have the assets, we have the liabilities and we have the capital. We have the revenue and the expenses were looking for the taxes, payroll taxes. It's over here, and b que The date will be 12 1 worry are in b R nine and we're going to say equals scroll down just a bit. Make sure you're in the right journal entry here. We could have made a green again, but we'll do that. Maybe in the next one we're picking up this number on the 14 bringing the balance up from 7 12,006 77 58 up by 958 2073 to 15 6 36 31 I'm gonna scroll all the way or let's go put our cursor right to the left side of the frozen pains and go right and notes that that portion is a, uh, income statement account, which is bringing down net income. Note that the payroll taxes that we have here are only including the employees, er, tape, payroll taxes, the employees e payroll taxes are included in the salaries and wages expenses here because they're not our payroll taxes. They're not something that we the employer are pain. We just took it out of the employees. Pay check. Okay, so then we're gonna go to the to 15 which is here on the trial balance. Same order on the general ledger scrolling to the right. Looking for 2 15 There's the assets. Here's the liabilities to 15. Here it is fickle. We're going to scroll down to A S 16 date, 12 1 We are now in 80 16 where we will say equals. Make sure you're picking up the right one. We're looking for this one, although it will be the same because this is the employer portion. This is the employee portion of the f I r f ica for Social Security. Now we're looking for the fight for Medicare, which is h I or account to 22 20. We are in cell a W 16 the date being 12 1 We're in a X 16. We're going to say equals and point to W 16. That will bring the balance up. And it looks much the same as the prior transaction in the G l four Fike out a chive. So Medicare, because this to as part of the fighter has a matching type of principle. And so we have the employer and the employee portion, in other words, So if we scroll back to the right, we should be back in balance here, let's scroll down and see if we see the green zero at the bottom, which would indicate that debits do indeed equal the credits, which is nice. 112. 170 Payroll Comp Problem November Journal Entry to Pay Payroll Taxes: Okay, so now we're on the last journal entry. What we've done now, we have entered the employer portion. Ah, the employee paycheck portion and the employer portion for the payroll. Now, we're gonna assume that we need to make the payment for all these liabilities that have been incurred on behalf of the employees taking the withholdings out and for the employer portion. And now pay them to whoever we need to pay them to, mainly the federal government. Okay, so let's do that journal entry in this is gonna happen on the 15th. So, no, we are obviously jumping forward in time a bit for that to happen. Okay, So to do that, we're just going Teoh make the zero. These are gonna go down just like a payable account where it's gonna pay it off and paid off with cash. So we're gonna debit these accounts because these air credits and we need to do the opposite thing that make him go down. So this one's got 5 4031 21 in its that we're just going to say debit 5 4023 21 And this one's got, uh, I'm gonna debit that 1394.25 and then the federal income. There's nothing in the Futa or Sutan, which is nice. That'll make it a little bit faster because once again, they would be there if it was the beginning of the papered and note. If you're just jumping into a payroll cycle, if you're in the beginning of the pay period, you'll be dealing with food A and Suta, and you'll start to be kind of shocked at the end That goes away, kind on it. And if you've only dealt with the end payroll periods within a year, you won't see photo and suited. So those things air things can kind of throw off the payroll process when you're looking at just one pay period, depending if it's the beginning or ending of the year. And with F I T federal income tax were going to say is 8404.13 and then the checking account is what's gonna be paid for those items. If we highlight the three of them, it comes after 14 3 2159 coming out of our checking account. We're gonna do that with the plug formula, the negative, some formula starting with instead of equals. Negative as to, um, we're gonna do this all with the keyboard. This time I'm gonna type shift F nine up arrow one time, hold down, shift left up, up. And then we could close it up with a shift zero, which we don't really need to. If you didn't do that, it'll still kind of do it for you. You can know that it'll and it won't even won't even give you an error sign. Okay, so then we have that. And now we're going Teoh, post this out. So there's 2 15 So here's to 15 on the trial balance. Third liability we might want to make. By the way, it's kind of stopping in the middle there, but we might want to make this one green since we have a lot of journal entries here now and we want to make sure we're picking up the right one. So I'm gonna do that. I'm gonna highlight this right Click on it, make it green. That's what we want. A post that that way we can do it a little bit more in a kind of brain dead fashion and still get the job done correctly. So we're going to go to the left. We're looking for a count to 15 2 15 to 15. Where's to 15? It looks like it's here in A s and 18. We're gonna be down online. 17. The dates gonna be 12. 15. We are in 80 17 at this time, and I'm going to say equals and point to that 5 4023 21 in V 20. That brings bounce down to zero. Then we're looking for accounts to 22 20. If we scroll back up, we see 2 20 A W and A X columns, respectively. If we scroll back down, we are in a W 17 date Will be 12 15. We're in a X 17 where we will say equals Scroll down to the green. Numbers were looking for him. We want to pick up that 3 1094 25 in sell the 21 bringing the balance down from 3 1094 25 by 3 1094 25 to 0. Now we want the account to 25. We're gonna skip a couple columns here. A couple columns skipped and we're gonna scroll back up and we're looking for columns. B, E and B F for account 1 25 were in row 13. Date 12. 15. We're in Selby F 13. We're gonna say that that equals scrolling back down, Picking up our number that fourth. That or 8004 04 13 bringing the balance down 20 Now we just need to post the cash accounts . I'm gonna go, right. That's gonna be the first account. Clearly their favorite account. I don't like it, but it's going down like this. But anyway, we're gonna go right to the left side of the frozen pains and then go right, and we're gonna pick up the cash account, which is up here in a K and A L. We are in a K 13. We're going to say the date is 12 15 and then in a l 13 will say this equals and find that last account pick up. 14 3 2159 Bring the bounce down from 4 38 7 17 62 by 14 3 22 About 24 24 3 96 03 If we go back to our trial balance and see if we are in balance, we are. That's good. Note that this journal entry does not affect the income statement at all. No income or expense accounts. In other words, what it does do is it brings down the payable accounts down to zero, and it affects cash, bringing cash down in a similar fashion as our most popular, most common and favorite payable the, uh, famous or infamous accounts payable, which goes up when we buy something on account. And it goes down when we pay it off and note when when the payable goes down. No effect on income because income statement and net income net income went up when the papal was incurred, not when it was paid. Okay, Last thing. Let's just make these green accounts blue again. We want to Britain make those green out green accounts blue, so we're gonna highlight thes cells above it. We're gonna use the paintbrush. In order to do this, we're going to go to the home tab clipboard group paintbrush. Select that paintbrush. Then we're gonna highlight the green cells that we want blue, and that should make them blue. I note that I indented them because I picked apart. So apparently that had an indent in it. So I'm just gonna highlight these, um, and go to the home tab alignment and decreased that indentation. I'll do that here to just Okay, so looks good. 113. 175 Payroll Comp Problem Dec: in this presentation, we're gonna enter the payroll data into the payroll register for the last month of the year , the last payroll period of the year. That being the month of December, we're gonna enter the information into the papal register and then put that into the earnings record over on the right side in the same presentation. A very ambitious endeavour here. But I think we're gonna do that a bit faster this time, so it will be doable. In the last month. We are going to try to use some shortcuts, put this information in there as quickly as possible and practice here not so much what the papal calculations are. But what we can do to kind of make the process a bit faster and little learn a little bit more on Excel as we go. If we scroll up top, we can see that the pains are frozen. So to freeze the pains, you want to put your cursor right in the A four cell. If they're not frozen already and then go to the view tohave up top, go to the Windows Group and freeze panes and then select the freeze panes option and then we'll go down to our payroll register now. No, we're gonna basically say that December is gonna be much the same as November, so we can get much of our information from November. So to do that, I'm going to go up top. These two are gonna be these two columns, the filing status, and the number of allowances will be much the same unless they change their payroll status on their W four. So will highlight or select those right click on them and copy them. Strolled back down and put that into our current month at being the month of December and Selby 33 right? Click and paste. 123 The hours, the irregular hours. That's gonna be the same too. So I'm gonna pick those up on a copy. That going to right click on the rate the rate will be the same as well. So let's pick that up, Teoh. That'll be great. So we'll pick all that up. We're gonna right click on that copy. That's gonna be the regular hours and the regular rate scroll back down To put that on D 33 right click and paste. 123 then we will calculate the regular pay because we want to practice that. But then we'll copy that formula down learning the the auto fill and copy functions of it better if we don't know those now. So I'm going to say equals. I'm gonna use the keyboard as much as possible on this last one going left two times to the 1 63 hours multiplied times gonna go left once. Note that you always going left. It'll start over like on on the cellular, calculating in In other words, you're not going to go to this cell and then go right like you think you're already over there after the multiplication time, so and then it's gonna be enter. And then we're just gonna copy those down. We could copy and paste the formula, or we can just drag this little auto fill button. So you want to get your cursor on the Phil handle So it looks not like that, but like that, Not like that. But like that, and then left, click on it on. You could double click on it like that. I was gonna drag it down, but double clicking will work as well And there's nothing here. Of course, because there's there's no calculation for the salary. So we're just gonna put here the 35,000 which is her salary, and that will be this cell in a format painted and got put. My cards were here. Format pain. I'm not sure what happened, formatting there and there we have that. Okay, so now the hours are going to be the same. So the overtime hours and we're gonna copy the overtime hours for the prior period of November. Right? Click and copy. We're gonna bring that down to the current period of December, right? Click and paste. 123 We'll calculate the overtime rate and copy that down as well. So the overtime rate once again will be equal to the 25. In this case, regular rate, times, time and 1/2 or 1.5 or 150% and enter. Then we're gonna put our cursor on that cell. We could double click on it again, or I'm just gonna drag it down this time, as I intended to last time. Just two cells. We're just gonna drag it down to sales. That's auto fill auto drives it down. Dr. Phil does the calculations, and there we have it. Now you know that. Excel. If you double click on anything of these settles well, then have put the relative reference down, meaning it point to the next cell down to do the same calculation, which is difficult, what you want in an excel sheet, but something that may not be natural when you first started using excel and something we need to get used to So then we're going to say that the P overtime pay will be equal to in I 33 the overtime hours, times the overtime rate, giving us the overtime pay. Then we're gonna copy that down in a similar fashion, using the auto fill by, selected in sales, selecting the fiddle handle, dragging down. And once again we could see that the relative references have moved down. That's the niceness of excel. Okay, so now we're gonna do the total pay. The total pay will equal the irregular pay and the overtime pay. The calculation will be equals. Strolling to the regular pay in so F or column F plus going left. One time to call him I and enter once again, we'll auto fill that down. So we're just gonna put our cursor on the Philando once we're on the cell, drag that down all the way down, this time to Judy's $35,000 salary for month of December. Not bad. And then we're gonna go to the wages. So we got the O A S T i wages, which has this cap here. We're not too worried about these 1st 3 employees hitting that cap. It's only big Judy here that's gonna be over that cap, most likely. So we can just say for these three, this equals the same amount and we're gonna auto fill that down. With the Phil handle dragging down and the other two employees then Judy, we're gonna check her in payment record. Because although this number is under the 1 28 400 she may be over that number for the year to date, which is what we're looking for. So we're gonna go over here to the earnings record looking for Judy and Judy is indeed over that amount, so you could see that she's already capped out the O A S T. I have 128,400 for the year. Therefore, her Social Security wages or O A S T I like of wages will be zero. So zero for that and then photo. I believe they've all hit the cap for food and Suta. We could just double check that if we go to the earnings records for these all these individuals because it's the final pay period. It's most likely that unless we have new employees, which could be the case. And it's something that you always at the check, which is kind of a bane s O that you could see that these have obviously, Judy's over the cap here, over the cap for this employee, all the employees, we don't need the name right now. The names that a little to the left, but we could see they're all over the cap. So no food, no suit for any employee. So we're gonna scroll back down to the last pay period. That would make things a little bit easier a little bit faster for our ambitious goal for this, uh, this one. So we're gonna say zeros and zeros, and I could highlight those two and auto filled zero down and we'll put the zero down. Then we'll do the O A S T I calculation in cell in 33 within equals and going to the O A S D I wages make sure you're picking up away SD I and not the total earnings. It does make a difference this time. Not for this employee, but it will once we fill it down to Judy. So we're gonna enter, then put our cursor on that once again and select the auto Phil. And I like I like to drag it down rather than double clicking on it first. Unless there's a lot of data. So I'm just gonna drag it down and there we have it. So note difference here. So this is important. And that that Ah, we use the correct column at this point because, of course, Judy has a different away. If the I wage then her normal wage in the h I we're gonna dio a similar calculation. However, it will be equals the total earnings, not the O A S t. I earnings, because there is no cap times 0.1 for five and enter Then will auto fill that down, selecting the fill handle and dragging down. Then the f i t. We're gonna pull that from the prior paper because the pay periods are gonna be the same and therefore the calculation for federal income tax or F i t will to be the same. So what is going to say that equals the prior period? Then I'm gonna auto fill that down. It's like that auto fill and fill that down and there we have it and it looks just like this column now. So it looks like it filled correctly and noticed that the moving of the cells as we fill it down with the formulas just got to get usedto how that will work. And you'll note that it's the best way to work. It's great that it it's able to see the relative references, which is usually what we want. Now I'm gonna do the group insurance, which is gonna be the same as the prior period, and instead of hitting interment, select tab because I'm gonna do the same thing for the union and the and the 401 K So I want to go to the left to the right instead of down when I hit Ah, Tam. So there's next cell union dues equals and the reason I'm gonna do this is that because then I'm gonna highlight all three cells and auto fill it down at the same time, which is gonna be very exciting and great to Dio. So we're gonna say tab and then the 401 k equals the same as the prior period and now enter or tab wouldn't matter. But now I'm gonna highlight these three, and we can also fill those down by selecting the fill handle and dragging down. And that should populate and look the same as up here. It did, of course, enter the two zeroes. That's okay. And then we're gonna calculate the net pain so the net pay in cell t 33 will be equal to We're gonna scroll all the way to the total earning. So here's the total earnings minus the sum. Gonna say shift nine left Once there's that and then hold down. Shift left, left, left, Left, left. Note. If you go too far and you could just go back right one and then shift zero and enter, then we can auto fill that down. So we're gonna put our cursor on the so on T 33 Phil handle. Drag it down. Auto drives it down. Dr. Phil does the calculations, and there we have the net pay. Now, at this point in time, you're probably saying something like, very funny with the net pay. And ah, you probably noticed that there was an air back here in the O a S T i calculation, where we just I just picked up the yeah, the OSD I wages, which is the correct comb, but did not multiply times the rate, which is 0.62 So let's correct that. Now we're gonna go back over here with a double click, and we're going to say times 0.62 Now we can auto fill that down. We don't have to delete these. What? You can just auto fill it, and I'll just override it. I'm gonna put my cursor on the field handle and drag it down. So that was intentional correction of ah, problem. And you could see how that works. All right, so then we've got the net pay looks good, and it should basically be the same as the prior period because it's the same numbers. So we look good there. Now we're going to calculate the O A S t I. What I'm gonna do now is will calculate this one then the Medicare than the food within the SUTA. And then we'll drag him all down. So we're gonna calculate away SD I We've already seen it in the employee side. Now we're doing the employer side, which looks much of the same scrolling over to the social security wages and then saying times 0.62 then selecting tab. Now we're in a chai where we'll say equals and we'll go over to the total wages. Times 0.145 tab then were in Fouda, where we'll say equals and scroll over to the food Tell wages times 0.6 Tam Then we're in suitable where we will say equals and scroll over to the suitor wages and say times point no, 54 and Inter. Okay, so now we just need Teoh. I'm gonna highlight these four sales were gonna select what should say. Select those four cells and then we're gonna auto fill those four columns down so we'll select the fill handle. Scroll down, auto drives it down. Dr. Phil does the calculations, and we have completed the earnings record for the last pay period the final month of November. Now we're gonna take this data and we're gonna reformat it. Note that this isn't format of boat for first pay period, and then employees, we want to inform at it in the earnings record by employees and then pay period. So to do that, I'm going to scroll back over and we're gonna make the I'm gonna make this one green once again so we can kind of do it with with almost it almost in a brain dead fashion, cause we just we're just gonna look for the green cells. We're gonna be on the green sales. I'm gonna highlight all of those and we're going to right click this set of data, go to the paint bucket bucket of paint here, and we will make that light green. So now when we and when we put this in, our earnings record will have of might green over there. So now we'll scroll all the way up to the top and we're going for Anthony. We're going for the month of December, last month of the year for Anthony and sell a B eight. I'm going to say equals for the filing status. We're gonna scroll down to those green data looking for the grain data, green data and anymore. We're just gonna put equals or Interscience. They entered. And so that cell were just saying, is equal to be 33 p 33. Now, we're not gonna auto fill it across. We could, but it would also feel not only the formulas, but also the form out of the cell, which we don't want to dio. That's why we have to right click and copy that cell and then highlight all the data to the right of it. Or the non data, the blank cells that don't yet have data and then right click and paste the formulas. Only formulas, only just the formulas. And that gives us, of course, the detail. The reason we're doing this is that we can then give the gross check as well as all the stuff that we took from these employees out of their growth check for their own good, supposedly and then gave them the net check. We can see that for the individual pay period as well as the year to date numbers. Now, we're gonna do this for the next employees, and then we'll do that for the next employees. And in the next one. So Cindy Lewis. So within sell a B 15 we're gonna say, equals, I'm gonna go all the way to the left, and then I'm going to scroll down looking for that green data looking for the green data. So there it is. Cindy Lewis were in Selby 34. We're going to say enter. Then we're just gonna pick up that M once again and copy it to the right. So I'm gonna right click and copy, but a cursor to the right into the blank data. We're going to select the blank data in the blue area, right? Click and paste it. Ah, Formulas. Only formulas. Only. It doesn't sound as nice is 123 but formulas only. All right, so now we're on this. So in a B 22 we're gonna do the same thing we're going to say equals. Scroll to the left. Scroll down. We're looking for the Green Data this time for Jill. There's Jill Jewels. Filing status. We're gonna say Enter, Scroll Back up. And then we're just gonna pick up that filing status by right, clicking on it, copying it, putting ourselves to the right of it and selecting the the cells to the right. And then right click and paste formulas only. Ah, and then we're gonna scroll back down and we'll do this one last time for the big earner, Judy Jones were in a B 29 equals. We're going to scroll to the left scroll, back down, Looking for the green data. Looking for the green data. There's Judy Jones. Last m last filing status and enter. I'm going to scroll back up just a bit. We're gonna pick up that him. We're gonna right, Click on it and copy and then select the data to the right of the M and right click and paste formulas only. Okay, so there's our information. Now we can see if we could scroll down. We got the green zeros. Remember that. That is our indication that the total earnings over here the net pay is equivalent to the total earnings for the year on the papal register, but let's double check it. Ah, One more time. This way as well. We're gonna say 1 41 9 76 now. And by the way, this is kind of like the lazy way to check it. We should check each number, but the net check obviously takes into account. You know all these numbers from the gross check to the Met check. So if we're gonna check one number should be this one. So it's 1 41 9 76 23 We're gonna scroll to the right, scroll down and see if we can find that same number On the net. Check. 1 41 9 76 23 114. 180 Payroll Comp Problem Dec: in this presentation. We're gonna enter the data from the papal register for the last month of operations of December for the year and enter that information into the general journal to the General Ledger and creepy trial balance from it. So it's gonna be a bit of a twist on this. Last one is gonna be much the same, however, a little bit different. We're gonna try to put this in a little bit faster, focus a little bit more on Excel as we format this last one. We're gonna start here on the register and know we're gonna be on the data aimed for November. We've got the frozen pains and we've made it in green here so that we don't mistake where we're at in order to freeze the pains. If your pain is not frozen yet, we're going to go up top to sell all the way. Teoh a four a four. Then you're gonna go to the view. Tam, You're gonna go to the Windows Group. We're going to go to the freezer pains. We're gonna go to freeze it will say freeze panes. If you're pains aren't yet frozen where his mind says unfreeze cause my pains are already frozen, so I'm not gonna click it once it's frozen. However, we should be able to see these top barred will remain. As we scroll down to the current paid period. We are working on that of the final month in December. Okay, so once we're there, I'm gonna make this green. You can highlight the all your numbers there and right click and make them green. If you choose to do so, It probably doesn't matter cause we're not gonna move around too much once we're here, then we're gonna go to the General Ledger and see if we can get our data situated there so that we can put this last few journal entries in and be good with the year. It's a busy time here. You're in for us as we enter this last payroll period in December. So we're going to select all the cells. I'm gonna unhygienic thing first and then see if we could situate things and then we'll hide everything once again when we're ready. So we're gonna put our cursor on the cell that dropped down like this, left, click and highlight all the way to the left and then select the selected or right click on the selected area and then unhygienic that selected area. Then we're going to see all of our data here. Now, we're gonna go to of course, uh, note. I'm having problems here because there's also frozen pains here, so the frozen pains can cause pain when you don't know they're frozen. So you want unfreeze panes, and then we'll freeze them again, uh, to to help us. So we're gonna go to the home to the view tab up top. We're gonna go to the Windows Group. We're gonna go to the freezer pains and go to unfreeze the pain, and then we can move, and then we'll freeze the pains once we no longer need as much movement. So we want to put her information into this last data cell. Of course. Are journal entries gonna be much the same? So as we did last time, we're gonna copy not the numbers, but the format of cells. So we're going to say, you know, we're gonna need this. We're gonna need this. I'm not going to copy the last one. Yeah, it's got the last one. We'll copy the last one to So we're gonna copy all that. We're gonna right click and copy, and then we're gonna put our cursor over here and right click and paste. 123 123 helps this time formulas Only. That means because we changed the format type down here a bit. And that's because there's gonna be a slight difference in this final pay period, meaning we've been running payrolls for the month and then paying the payroll the first day of the following month. That's when we actually wrote the check. That's when we're making the payroll. Um, if that's our system, if that's the payroll system were doing, which means we're kind of more on a cash basis, which is typical for payroll payroll, will not line up specifically to our papers when we make financial statements. It may not work exactly this way, but we'll have some, you know, depends on what system we're in. But in any case, we want to set up the payroll system to work as easily as possible for the payroll system, not so that it works as easily as possible for an accrual accounting system. Ah, and in our case, that meant that we wrote the checks on of the first day of the following pay period. And we just did one journal entry at that point of time, in order to process payroll now, we're gonna have basically an adjusting entry at the end of the year because we need to have all the papal in there as of 12 31 and we're not gonna pay it until January of the next year. So what we're gonna do is we're not actually gonna pay cash of a journalist will be all the same except this account. We're not gonna pay it yet because we typically don't pay it until the first day of the next year. We're gonna keep with that practice and know that we don't want to mess up the payroll. The payroll kind of usually is like its own function, so we don't want toe, you know, tweak the payroll process on, make it more complicated in order to align with the end of the year. What we're gonna do is making adjusting entry and then allow payroll to do what Harold does . So to do that, we're going to instead of just paying the cash out here, we're gonna put it into a payroll liability account. So that's gonna be our twist right there. And that's the twist that we were looking forward to seeing. So the liability is gonna be the thing that increases and not the cash account. I'm going to right, click and paste that there. Everything else will be the same in this whole increased Now note. If you're looking at payroll problems in a book, then oftentimes they like to use the payroll payable account. Because it kind of tells you exactly. You know what we're doing that this is a payroll journal entry. So you might see that on all the journal entries? Um, it just again, it depends kind of how we're setting up the payroll process then And then we've got the payroll tax liability. This one will be the same. And note that the payment that we make when we actually make the payment, then it's gonna happen in January of the next year, right? That's the actual payment happened on January 15th even though the payment with four payroll period ended in the prior year for December, and that's typically the case. So when we do the payroll taxes and try to tie everything out. We have to deal with that. The fact that the payments are not gonna be in the same time period, typically as the payroll period for which they're being paid and that will happen at the cutoffs that will happen in December and and possibly in the first in January. If we were doing a full papal period, we have to watch out for that kind of issue. So we'll look at that when we do the when we do to summary documents. So now I'm gonna hide, which will be the 9 40 ones in the 9 40 for the end of the year. So let's hide everything toe left. Now, we're gonna put my cursor on this X here, and we're gonna select the data all the way to the left. Let go, and then right click on that data and hide that data. We don't need to see that data. It's too much data would be looking at it the same time. So now we're just gonna pick up our information here from the payroll register. So we've got our our journal entry. We're gonna go back to the payroll register of what we want to pick up. Uh, well, let's go with Look at it. Let's take a look at it. We're gonna go down to our last month here, and we're gonna start with total earnings. We're gonna pick up just just the same thing here. We got total earnings minus all these deductions. Gives us the net pay. So we'll start with total earnings. Go back to our journal entry. That will be an expense. It'll be a debit were in a B five. We're gonna put equals there and then select to go back to our register and say we want this dark blue number, the 48 77 54 total earnings. Then all of these air gonna be credits because their liabilities, this is what we're gonna be removing from the paycheck for the benefit of the employees and painted Teoh the government. So in a C 60 we're gonna say negative instead of equals. Go back to the registered. We're looking for that O a S D I, which is right here in in 37 enter. We'll do the same for H. I were going to say instead of equals negative. Go back to the register and we're looking for a chai in 0 37 enter. We're going to that same for F I t. Federal income tax Negative instead of equal. Go back to the register and point to that federal income tax and enter group insurance. We're going to the same thing. Negative instead of equals. Go back to the register group. Insurance is nice of benefit. This is the optional benefit. Remember and enter the union dues were gonna say negative. Go back to the register, pick up that 16 and enter the 401 K or retirement plan. Also a nice option benefit to have. So it's good that they offer that this is actually is it benefit to take out of a paycheck ? And there's that 7 2074 20 Now, instead of the difference being cashed, the net pay. If I go back to the register, we see that the net pay should be the difference. That's what we're gonna calculate, which you would think would be the paycheck or the cash that would go out for the paychecks . But this time the paycheck didn't actually go out until January, but we owed it as of the end of the month and need to record it for this time period so that our financial statements will be a correct as of the end of time, period. So if we highlight the debits minus the credits, that's gonna add up to 29 8 75 23 We're gonna calculate that using our plug formula, which is the negative s. Um, I'm going to use the keyboard the whole time here. So shift nine. Hit the up arrow one time, hold down, shift left one time and then up, up, up, up, up, up till we have the whole square. Then we could ah, close it up. We don't need to, however, and And we could just say enter and it will close it up for us. As you can see it. Put the ending brackets on here. So that's the 29 8 75 23 Let's double check that. That is indeed our net in our net. Check on the register. 29 8 75 23 Looks good. Now, let's post it, then we're gonna go Teoh account 502 Let's freeze the pain first. Let's freeze the pain now, So we're gonna put our cursor on 81 81. Then we're gonna go to the view tab up top windows grouped at the bottom of the ribbon and then go to the freezer pain and freeze the pain. Okay, so then we're gonna look for 50 to remember That's way at the bottom. Down here, down in the income and expense areas, it's gonna be in the same area and the general ledger. So let's go with rights. We've got the assets. We got the liabilities, we got the capital capital, and then we've kept the revenue and expenses. So we're down here and be in and be in. So this time it's gonna be on 12. 31. Notice a difference in the pattern here? It's not. It's on its not on January 1st on 12 1 because it's in essence and adjusting journal entry and then in B in 22 we're gonna say equals scroll up just a bit. So we confined our data and we're looking for that 48 77 50 and Inter. Now I'm gonna put my cursor right to the left of the frozen cells and then go right, so it should pop back over. And then we're looking for 2 15 to 15 is here. Now, we're gonna record all of these at the same time without coming back over here. Teoh the trial balance. So we're gonna scroll, right? We're looking for 2 15 to 15. Where's to 15? There it is. It's in its columns A S and 18. So in a S 18 were going to say 12 31 and then an 80 18. We're gonna say equals and point to that a C six and enter. Now we're looking for 220. That should be right next door, right next door to 20. So we're gonna pick that up in its column. A, W and A X were in cell a deputy 18 date, 12. 31 in cell. A X 18 equals and we're gonna pick up the 6 97 for H I and enter. That's correct, right? H I OK, then we're gonna go, Teoh. See you. It's not miss one this time. We're gonna go to the to 25 to 25. If we do miss one. That's okay. The double entry accounting system will let us know, but we'll try to get it right this time. So we're gonna go on to 25 Selby e and B F. I'm going to say 12 31 and then in B F four team, we're going to say equals. And we're looking for that to 25 8004 04 13 bringing the balance up to 8004 04 13. Note the patterns in our payable accounts. Here it, you know, goes up and then it goes down, it goes up, and then we paid it goes up, and then we paid it that that should be the pattern, just like it would be in accounts payable type of account. So we're gonna go then Teoh to 43 to 43. Looks like it's down here and the date is going to be 12. 31 road 25 Selby F 25. We're gonna say equals scroll Back up just a bit. We're looking for that to 43 were picking up this 5501 penny and enter. Okay, so now we're looking for 2 45 cell to 45 or account to 45. And that's gonna be in. So be I 10. Date 12. 31. The amount is going to be equal to that 16 in a C 10 and enter. Now we're looking for 2 20 sent to 47 slightly different. 2 47 in B I 25 date 12 31. Then we're in cell B J 25 equals, and we're gonna scroll up just a bit and pick up the retirement plan in a C 11 and enter. Okay, so now we're gonna scroll back up, and we just need to pick up that payroll payable account. So that one, I believe, is to 13. I know it's 2 13 but it's to the left, I believe. And ah, so it's down. It's gonna be right here. So it's in a o ao 24 Aowei. So that's gonna be 12 31 and then a p 24 will be equal to scrolling back up just a bit. We're picking up that 29 98 75 23 enter. So there is our balance that we go right to the left side of the frozen pains and then go right will pop back over to that trial balance and scroll down and see if we are in balance , which I hope we are. All right, we did it correctly this time. If that means the debit sequel, the credits with the Green zeros and the net income is affected here because the expenses went up and we had to do it as a 12 31 instead of January 1st, which would be the normal routine in order to do and adjusting entry and pull this data into the proper pay period, the proper year for our financial statements, reporting net income properly down by that payroll cycle and reporting the related liabilities. We need to do the same thing, of course, for the employer portion. 115. 185 Payroll Comp Problem Dec: getting the proper payroll tax expense in the proper time period and the liabilities related to it. So if we go back to our register over here, we're picking up now the pay employer stuff, which is the Social Security, that Medicare, the food in the Suta. And, ah, these two we've seen before because they're basically matching. We're gonna record it again here for the employer portion. We already saw the employee portion coming out of the employees check. These two are employer only. Note that suit. I could have an employee portion as well. Well, we currently are saying it does not. Here. Depends on the state. Okay, so we're gonna go back and record this. It's gonna be great. So we're gonna be here. Ah, food to first. We're gonna go to the liability side, were in sale a C 15. Gonna be a credit. So we're going to say negative instead of equals. Go back to the register and earnings and point to that O a S t I. Then for the h, I were in a C 16. We're gonna say negative, go back to our register and point to the H I or Medicare it was not gonna be any Fruita or suit em because that's been completed. So we can just put zero there. We don't even need the accounts. I'm just gonna put zero there. We're not gonna post it because we don't want to waste the time. We're gonna be a little faster. So now we're gonna do our negative some formula. So negative some that's being the plug formula. We're gonna do it all with the key board and shift F nine down one time holding the shift down, right one time, holding shift down, down, down, down arrows three times and we could close it up. But no need to, so we won't and enter. Okay, so now we're gonna enter this data. I'm gonna make it green just so we don't mix it up here. We only need these three. So I'll just highlight those three right click on him and make him that light green. I'm picking up this light green right there. Nice light green. So we can still see the the numbers. Hopefully. So we're looking for 220. So here's 220 on trial balance. Gonna be in the same order on the general ledger scrolling to the right toe. Look for that to 20. We've got the assets and then the liabilities. And then here's to 20 of a fighter H I fight our Actually, there's 2 15 05 20. That's gonna be all the way to the right because it's an expense account and there is 5 20 the payroll taxes. So here we go is pick that one up first that's gonna be on 12. 31 b que ah, 10 and b R 10 we're going to say equals point to that 1005 07 93 bringing the expense up. Then we're gonna go back to that to 15 which is what I was looking for last time and finally to 15. Which is it gonna be in the liabilities area? It's in sales or columns A S and A T. So we want to be here in a S 19 date, 12 31 12 31 and then in 80 and 19 we're gonna say equals pointed to that 810 81. Note the pattern. We got the employee portion the employees er portion from prior periods and with the pattern employees portion. Employer portion paid it off. Employees portion Employer portion paid off. Both employees portion. Employer portion paid off both. That's what it should look like if the payrolls properly done. Hopefully, that's what it looks like. So then we're gonna go to the, uh to 20 2 20 which is right next door. There's 2 20 We want to be down here in a W 19 the date of 12 31 then in eight x 19 we will say equals point to the 6 97 12 And there we have it. Same pattern here. Employees portion. Employer portion. In the past, we see employees abortion employer portion paid off. Both employee and employer portion employees portion Employer portion than paid off both employee and employer portion employees. Portion. Employer portion paid off. Both employee and employer portion. Okay, I'll stop. So then we're gonna go back to the left side of the frozen pains, Click right one time and see if we're in balance and it looks good. So we're in balance. And so now we've recorded the payroll expenses which will bring down net income, and the prior transaction showed the payroll tax will. This one had the payroll tax expenses, and the last one have just the payroll expenses, which brings down net income and then on the balance sheet. We have the liabilities related to both employee and employer portions. That port we took from the employee paycheck and go to the government and the part we took from our I count and go to the government, our account as the employer where I always think of ourselves as the employer when we work these problems. Okay, so then we're gonna highlight this one, and ungreased I'm gonna un green these. That's what I'm doing here. So I'm gonna do that by selecting these cells at the bottom, and we're gonna paint brush it So we'll go to the hometown. We'll go to the clipboard group and paintbrush. And it was the paintbrush thes back to blue or get in the last transaction notice. I'm gonna keep this one in January 15th. I'm gonna record it just so we can see what it will be. And the reason we want to see it is because we're gonna need it when we do the, um, The year in documents the nine forties and 9 40 ones. We're gonna need to know what we paid. We're gonna need to know of a payment to be able to apply it to the proper pay period. And it's generally going to be the case in payroll, meaning when we do the processing, we're gonna we're gonna do it a month later. So it's obviously we're not doing the quarter in payroll right at December 31st. It's probably gonna be sometime in January that we process all this stuff and therefore we're gonna know we've already paid Ah, the payroll in January and, ah, when we process it. And so we need to know what that is. I'm gonna posted here, but we're not going to record it. Teoh our trial balance because this is our trial bounce. I'm gonna say, as of the end of the year. So this is the end of the year trial balance. If we went to the journal entry for the next year or the General Ledger, we would see the data for the next year, which would include the payroll payment that we're gonna need to apply to the 9 49 40 ones for this year's December's fourth quarter and year end of this year. So, in any case, when we pay this off, that journal entry is going to include the fact that we're gonna have we're gonna have to pay the cycm Ah, away S t I and h I. So these need to go down to zero when we pay it. So the dead it's gonna be 16 to 1 61 for salt security or O A S t i for h I It's gonna be 1394.24 for f i t. It's gonna be 8404.13 and then the checking accounts gonna be the the credit. Now note we What we didn't do is reverse the payroll payable, and that's gonna be done as part of the adjusting process. So we might have a reversing entry Probably would be the best way to do it as of January 1st, we're not gonna get into reversing entries now, so but we could do it. We could do it that way. What we're doing now is just the normal payroll processing, paying off the liability so that we can report that on the payroll forms the quarterly's and the urine. So I'm gonna do this with a negative some and then shift nine up one time left, one time shift left one time, and then up to times, you select in that area and enter. So there we have it again. We're not gonna post this here because this is just the data for the end of the year, but we need to note this so that we can use it for a payroll documentation. 116. 190 Payroll Comp Problem Form 941 4rd Qt: in this presentation, we will fill out form 9 41 employers quarterly federal tax return For the fourth quarter, we're gonna start off with the EI in number and the address T e i n number typically different than the other normal reporting number that we would report with depending on the type of entity are normal reporting number for recording the income tax could differ for sole proprietor of partnership or a corporate corporation. In other words, the EI in number will then be a more standard number. When just reporting the payroll for the Internal Revenue Service, we're gonna be dealing with the fourth quarter, the quarter of October, November and December. Remember that the quarter has the three months in it. I here for the fourth quarter, 12 months, divided by 33 months per quarter last quarter off the year. This is a busy time for us at this point, that will end of the year here, where we have to do the 9 40 ones. But nine forties that w twos the w threes and put this all together. We strolled back down. We're gonna go through our information that first cell here, the first line in Part one says number of employees who received wages, tips or other compensation. And for the fourth quarter, as of December 12 4th quarter, we had four employees, wages, tips and other compensation. Remember that this really lines up to the federal income tax were kind of looking for the F i T wages tips. So if we go to our worksheet and we scroll back down, I frozen the pains up top. So freeze panes by going to sell A for going to the view tab and then the freeze panes and freeze the pain. Then we're gonna scroll back down to our data that we have compiled at the bottom Got the data for the third quarter. We've compiled the third quarter data, and we've compiled the data for the totals which are now populating for us automatically. So if we double click on this is populating all of the totals for each month of operations . However, what we need is the fourth quarter. So we're gonna add Q four here, and we're just gonna add the months related to the fourth quarter and then we'll do the calculation here. That's gonna be October, November and December and then we'll copy and paste this across. So with in cell F 40 we're gonna say equals and we're gonna screw up. 2 October that totaled for October is gonna be here in F 23 and say Plus and then scroll down to November in F 30 and plus and then scroll down to December in F 37 enter. So there are three months now if we If we want to check this, we can highlight these two numbers. Excel will then calculate it down here. 240,000 411. That matches our total, which we calculated by summing up all the months. So it looks good. So now we're gonna highlight that cell. I'm going to copy it, right Click. Let's copy that sale and copy, and we're gonna put that over here in the data all the way. We're gonna select all these empty sales for the fourth quarter. Right? Click and paste. I shouldn't matter. We can pace 123 or normal pasting or not. 123 but either formulas or normal pasting. And that should do what we want it. We want to check any of these? Probably best just to check the net Check over here. Free highlight. Thies too. It adds up to the total of 1 41 9 76 23 which looks like that number. So that looks good. So now we need to make sure that we're picking up the right data now when we fill out our form, So I'm gonna go ahead and make We're gonna pick up this data. We don't really need this over here. I'm gonna highlight all this data. This is what we're gonna be using to fill out our form. And I'm just going to right click and let's make that green make it like a light agreeing a nice light green. Okay, so now I'm going to scroll down. Just so that's the only data we can see. And that's the data we will use. So, school back over. There it is. It looks fantastic. OK, so we were looking for the f i t wages, and that's gonna be the total earnings here less what would be deducted from it, which would if would be the 41 came on retirement. And if if the if this was a cafeteria plan, which it is not. Then we would deduct that as well. So here we're just gonna deduct the 401 k the retirement plan. So if we take the calculator here, we're going to say it's the 1 44 to 32.5 minus the 83 to 2 point 0.6. And that will give us the 1 35 909.9 We'll go back and populate our were our worksheet with that. So back to our worksheets we're gonna populate with 1 35 comma 909 time 90 Okay, so now we want the federal income tax withheld. I remember that the federal income tax withheld really has nothing to do with this number because it changes per employee. So this is just the sum of all the all the wages. But we can't apply a flat rate because everybody has a different rates and they have different with holdings and allowances. All we can do is tell the IRS Hey, you know, this is what we withheld. So we're gonna go back over here and say, What did we withhold? And we withheld for the f i t. That's 25. So I'm gonna put that in the calculator so we could see it to five. Do undo that. So it's 25212.4. So that's what we're going to be using. I'm gonna go back to our 9 41 So we withheld to 5 to 1 to tab for zero. All right, Now, we want the Social Security wages, which will differ from the federal income tax wages. So we'll go back to our worksheet. We're gonna pick that up. Here we have a separate column for the Social Security wages. Now, the reason it's gonna be different is that we had that one employee, Judy Jones. It's gonna hit the cap. She's probably like the owner you're making that you know, most of the money. So she hit the cap and therefore stopped having self security, which is at that point. And so we have less of a soul security wage. Their also note that if there's a qualified cafeteria plan, which this is not, then it could differ for that as well. So those are some reasons why the o a S t I wage could differ from the total wage as well as the Medicare wage. So we're gonna pick up that 97 so it's going to be 97632.2. That will put over here in our 9 41 97 comma 6 32 tab. 50 cents will multiply that times the 500.1 to 4, which can probably isn't a percent that's been drilled in your head. If you've been working this whole problem, as is 3% of 30.62 And that's our self security for the employee and employer portion. If we multiply it times to to take care of both employee and employer portion at one time, that's our 0.1 to 4, which we will then multiply a times 97632.5 to give us the 12,001 06 43. So here we're gonna put down the 12,000 comma 106 Tab 43. You may not recognize that number from our worksheet here as well, and that's because it's going to be the employee portion. This number, plus the employer portion. That number, which adds up to 12,001 +06 43. So I could be a little confusing when we go back and forth from the 9 41 back to the 9 41 We have no tips, which is nice. Don't like dealing with tips. And then we have the tax Medicare wages here. So we're gonna go back to our worksheet now. The tax, the Medicare has no cap. So we're just gonna pick up total earnings. When would it differ from total earnings? If there was something to be deducted from total Medicare, such as a cafeteria plan, a qualified cafeteria plant, which is a section 1 25 plan. So we're just gonna pick up total earnings, which is going to be this 144232.5. And we're gonna pull that into our worksheet. It will be 144 comma 232 tab 50 cents. Well, multiply that times the 0.29 You might be saying what? Where does that come from again? We don't recognize that percent. We've probably recognized 0.145 If we've been doing this holding. And if we multiply that times two, we get 20.29 So it's the employer and employee portion represented in the percent format. Times the amount of 144232.5. That gives us 4182 So we'll put that for 182 Over here. I got four comma. One a two, tab 74. Next we've got ad column to From Lines five a five B five C five D. So we're just gonna add these up? Then It's gonna be good times, so we gotta pull the calculator. A calculator out Column two were adding up 12 1021 of 6.43 Quest 418 throat 2.74 16 to 89 17. That's gonna go here in e five. That's gonna be 16. Comma 289 Tab 17 Okay, so then we have a section 31 21 notice and demand. Uh, we don't have anything. They're leaving it blank. Next line is going to say total taxes before adjustments Add line. We have 35 e g and five f. So we're gonna add up. In other words, F I t. So security and Medicare, which we've already combined together here. So it's gonna be the f i. T. 25212.4 plus biker taxes, Social Security, Medicare of the 16 to 89.17 given the 41 501 57. So we're gonna put that here. 41 comma, 501 time, 57. Okay, then we have some adjustments. If there's any pennies off, if we're off. Bye. Pennies. They're gonna allow us to make an adjustment for the pennies that air off from the deposit to the liabilities, which is nice. We're gonna stroll on down to line tain, which is total taxes after adjustments, which will remain in our case, 41 comma, 501 tab 57. Then we have the qualified small business payroll tax credit. Nothing for us here. Then we have the total taxes, which will be the 41 comma, 501 tab, 70 or 57. Okay, that should be 41 41. All right, line 13. Ah, then is going to be the deposits. Okay, so remember, this is the liability now, so we're telling the IRS Hey, this is how much we owe. We re calculated it. You can see how we got to it. Now we're gonna tell you what we actually paid you and it should be the same because we've already made the payments. This is an information form. Hopefully there will be nothing, Dio because it should just be an information form. So to get the payments will go back to our worksheet over here. Now, it's not gonna come from the register. This is telling us what the liability is. This doesn't tell us when we paid. We have to go back to our our journal entries to see where the payment happened. We could go to the G l. We can find the cash payments that happened. So if we go to the geo, we see our payments over here. We're gonna have to break out more detail, However, because we've grouped the payments together. So we're gonna have to go to the journal entries and see where these payments are. And we can see that we made a payment on 11 1 or sorry, we made the payment on 11. 15 and this payment was made for the pay period ended October. So the October papered was paid with this check, which represents the amounts for O A S T i h i and F i t. So security, Medicare, Federal income tax for October. So with made in November. Uh uh. It was made in December for the taxes and liabilities of October. And then we had one in December that we made this payment for the activity that happened in November. And then this payment was in January of the next year, but it was paid for the payroll period ended December of the prior year. All right, so those those are gonna be our payments that we need to pick up. Now it's going to include these payments. Only includes pica the fighter taxes. And if I t, which is exactly what we want. That's what we're calculating here. You'll note that it doesn't have as the prior paper periods fouda in suta involved, which makes things easier. Why not? Because all four of our employees have have reached the cap already. And therefore I don't have any food or suta at this time, so that makes it easy. We can just pick up these numbers. It's gonna be this number. The cash check. We paid for. So security, Medicare and federal income tax, This number the amount we paid. And this number, which adds up to 41 501 57. We could do that again in the with the calculator just for the fun of it. It's always nice toe punch things into the calculator. 15 760 plus 14321.59 plus And see if we can find that last number, which is right there. Plus another 11419.98 And that's gonna give us the 41 +501 57 today. Okay, so now we're gonna take that number, go to the 9 41 and it should match of this number, which it does 41 501 57. So our story so far, Internal Revenue Service, This is our liability. You can see how we got there. This is how much we deposited to you. Ah, and therefore we don't know you anything right now. If you want to see more support about this number of the actual deposits we made, then we're gonna fill out this second form the 9 41 Now, we're a quarterly depositors, so we may not need it. But I want to just show you this form just to show you the support, the more detailed support type form that you can have. So we're going to say it's the fourth quarter here, and we just got the three months that we're gonna be dealing with. And we're gonna break out all the payments for three months. We only have one because we're quarterly. I'm a monthly payroll processors. But if we were weekly or biweekly or semi week monthly, we would have more than one payment, most likely. So to do this, we're just gonna go back here, and we're just gonna pick up each of these individually each of these payments. So for the first payment that was applied to the first month, it was made in November, but applied to October. Is this 15 7 um, 15 7 60 Somebody's gonna memorize out on here. This time we're gonna go back here, and actually we're gonna go back here. It's gonna be the 15 comma 7 60 90 cents. That's our only payment. So if we sum that up, it's gonna be the same over here. 15 comma, 7 60 90 cents. So then we're gonna go to our next payment. That happened in the next month. Ah, yeah. It happened in December. We made the payment in December for November, and that's gonna be the 14 3 2159 Just double check this payment. I said there's no 90 cents there where? I got that 90. So I'm gonna go back. There's no 90 cents. No. 90 cents just okay. My memory's not get. Okay, so then we're gonna go back over here now. We've got December. We're gonna pick up this 14 3 2159 That was made in December for November. So we'll pick that up. That happened in our second month. So that's gonna be here. It's gonna be 14 comma 3 21 tab 59. Now it's gonna be our total because it's our only payment. 14 comma 3 21 tab 59. Okay, then we're gonna do this. One more time for the last month of payment happened in January of the next year. That's when the payment was made. But for the last quarter or month December of the prior year. So it's the 11 4 1998 So we'll go back to our data. Uh, here. We're going to say, that was 11 comma for 19 tab 98. That's our total as well. Which will be 11 comma for 19 tohave 98. Okay, so now we just add these up and it should come out to our total if we have done this properly. So we're gonna say 15 76 year old Close. 14321.59 plus. So if we could find that last number Saturday's there's the last number plus 11419.98 Enter 41 501 57. I think that sounds familiar. I think that's what we wanted. 41 comma five. A one point time. 57. That number should then match what's on the 9 41 9 41 41 501 57 So we're basically saying that this will give the support. And if the iris wants to know what checks we have written, we could say, Hey, here's the checks. Here's when we wrote them. You should be able to find them on your end. And if they can't, then we go through and match off, checked by check and try to see one. Did the checks clear on our side? If they did, then the iris deposited the check to. If that's the case and we still can't find them did the iris supply of the check to the wrong time period? Meaning possibly it wasn't, for example, this check here. Maybe, and it could be our fault. Maybe we maybe we applied it in the form when we made the payment to January of the next year when it should have been applied to December of the prior year. So those timing differences and applying the payments to the proper place is commonly the problem. That will happen. So then we just need to make sure that we have it all tied out, and this form can help us do so. 117. 195 Payroll Comp Problem Form 940: in this presentation, we will fill out the form at 9 40 employers, annual federal unemployment, food attacks. A few things we want to cover before getting into the numbers for the 9 41 1 is just to keep it separate form from the Form 9 40 The numbers being so closely related can make us think that they are related in the number 9 40 Being before 9 41 numerically can make us think that possibly the 9 40 is the quarterly form and the 9 40 ones are the yearly form of the annual form. And that's not the case. That 9 40 form is the annual summary form. The 9 40 ones are gonna be the quarterly form. The other common thing that this could lead us to believe would be that the 9 40 is re capping the information for the 9 40 ones. And this isn't the case, either. This is wrong, but it would make logical sense for us to think well. The 9 40 forms are going to give us the data's on a quarterly basis for payroll tax owed to the government and then the 9 40 at the end of year so that 9 40 ones give us quarterly. The 9 40 at the end of the year is going to re summarize that again as of year end. And that's not the case here. What is the case is that the 9 40 ones have different federal payroll taxes than the form 9 40 meaning the 9 41 covers the big payroll taxes of Social Security, Medicare and Federal income tax, whereas the 9 40 the end of the year tax return or the entire year return Onley covers FOTA federal unemployment tax, which is relatively small. So the way you want to think about this, why would that happen? Why do they do that? 39 40? Actually, the way we're doing food to kind of lines up closer to how we might think of our forms for our taxes are 10 forties, meaning we typically have our 10 forties are employers. Take the money out of our wages. In other words, we make the payments throughout the year, and then we report what has happened at the end of the year. One time on art are form 10 40 and we tell the IRS Hey, Here's what we earned. Here's our calculation of our taxes. And here's what we already paid. And in a perfect world, they would be the same, and we wouldn't get a refund or only taxes. Obviously, it's not a perfect world, and that's too complicated toe happen on a form 10 40 foot. That's the idea. The same thing is going to be true with the 9 40 which matches that same kind of scenario, we're gonna say We're gonna make the payments throughout the year, just like we dio with our income taxes. We will report it one time at the end of the year and hopefully our payments that we have made match our liability calculation, which they likely will on the form 9 40 Unlike our individual income tax reforms with 10 40 why don't we do that with the 9 40 ones? Why does it differ? The 9 41 Zahraa lot bigger of the numbers, so I can. The iris is more concerned with the 9 40 ones and want actual Moore reporting. They want not just a year and form. They want a quarterly form so they want payments during the year and they want to verify that those payments are are lining up on being done correctly on a quarterly basis rather than an annual basis. So in other words, they're given. It's a little bit more leeway on Fouda and a little less reporting requirements because probably the reason and again, if you're looking for justification, are good reasons. Within the tax code, you might be looking a while, but theoretically, I would think the reason would be that the amount is smaller and therefore they're willing to allow hostages have to the annual report him. So now that we have that, we're calculating the food, um is gonna be the smaller tax for and we only need the one form for the end of the year. We got the same E i N number that we will be reporting the employer identification number, name and then the business and the trade over here. We don't have the quarters, of course, because we're not talking about quarters. If it's admit if he's apply, we would check them like an amended returns or no payments to employees of the final. If it's the final return, because the business isn't gonna have payroll or going out of business or whatever. Then we would have that We're gonna go down to port one first thing if you have had, If you had to pay state unemployment tax in one state only enter the state here. We're gonna give the state of Nevada And And one reason is because they typically have less taxes. Oftentimes what may be more simply skated, but any state would typically be similar. You might be asking, Why do we need to know what state it is? If the federal tax form, what does it matter? Doesn't the Fed treat all states the same? And the reason is because remember that the federal tax here is tied Teoh the state tax in some way, meaning the way the federal law was written is that it said, you know, we're gonna have an exemption. You can pay less taxes if there's a state tax which basically mandated the state's toe, have some minimum type of suta. So for that reason, there's kind of a link here between Fota and Suta, and we need to know, Did you pay suit attack so that we know what rate we need to apply for food us up the state tax for the federal tax. So then be says, if you had to pay state unemployment tax in more than one state, so we're not gonna deal with that here? Uh, but you could see what the goal here. Same kind of gold. Did you pay state taxes? If you did, then you probably gonna get to have a lower federal tax rate. Two if you paid state wages in a state that is subject to credit reduction, we're not gonna deal with that here. Okay, Now we're gonna get to the actual calculations. So line three says total payments to all employees. So if we go back to our worksheet, we're looking for total payments to all employees, and here we're gonna pick up our total, some scrolling down to our worksheet. And so remember, I'm gonna scroll back. We've got the pains frozen, which is on if you put pressure on a four home tab, Windows group, frieze pains and freeze the pains. Then if we scroll down, we're looking at our data that we have summed up down here. It should already be summed up in the totals. So we have the third quarter totals. We've got the fourth quarter and we've got all the totals I'm gonna make The total column now, the green column. That's what we want to work with. So I'm gonna un green this column going to select the entire gun Gonna ungh, remit or make it to blue Let's make its blue instead of greening And then we're gonna right click on it and go to the paint and make it blue And if that blue is not there, you got a little color wheel down here standard. And that that's the blue we're using right there has that we have to be user confusing blue because just to confuse people Okay, so then we're gonna go down here, and we're gonna make this green the totals or what we're gonna be using. So we'll highlight all this data and then right click on it and make it green will make it that light green. And that's the data that we want when it's rolled down just a little bit. And just so we can just see that data and limit the confusion of limit my mistakes, any help in that regard is good. So now we're gonna pick up the wages. Now, note the wages. We're gonna pick up his total earnings here. Total earnings. Not like we picked up on the 9 40 ones, which was total earnings less something like the 41 K Or if there's a cafeteria plan, we're just gonna be picking up the total learning. So in other words, if we add up the 9 40 ones, it may not add up to the total earnings on the 9 40 If there are things like a retirement plan and group are not group insurance but a cafeteria plan. So we're gonna go back to our form here and we're looking for the 9 40 and we will enter that data top. So that's gonna be the to 41 comma, 206 Tab 00 All right, now, here's where it gets a little confusing. We got payments exempt from food. Um, we're not gonna have anything there. And then it says total of payments made to each employee in excess of 7000 which is a kind of funny calculation. So they want they want the number that was over the 7000 and then down here, it says the sub total, which is gonna be adding these two and in line seven says total taxable photo wages. So what we actually have done in our worksheet is calculate Line seven total taxable food that wages. We didn't calculate the amount that's over the $7000 limit, because why would we do that? You know, we calculated the amount that was taxable for food, toe and the tax. So what we're gonna do is kind of back into this number that we're gonna fill out what we know, this number and actual tax. Then we'll back into this number. That's kind of a tricky thing, the way I usually have seen this to think about this. So on our worksheet, we have food of wages of 28,000. It's less than the total wages because of the cap of 7000. Remember that just about everybody is gonna hit that cap. If they've been working for the entire year, the only time someone's not gonna hit the 7000 cap typically is if they haven't worked the entire year. If we up meaning if we hired someone in in December, then they may not hit the cap or if, um, we laid someone off throughout the year before they hit the cap, then they wouldn't. But for us, we've had four employees, so we had four employees. They all hit the cap time 7000. And so that's 28,000. So nothing over 28,000 is going to be included, because that's what the cap is. So we're gonna pick that 20 28,000 up and then it If we look over here, we already calculated photo, which is gonna be that 28,000 times 0.6 or 1 68 So we already know those numbers. So if we go back over here, we can say, Well, I know this number's 28,000. Let's put a comma there, make it look nice 28,000 00 And then we'll calculate it again. So it's a 28,000 times 0.6 Notice using That's lower rate, but the food of rate after suta taxes, if you've paid soon, attacks is point over six. That's the 1 68 So the taxes only 1 68 Notice how how much lower it is then, so security and Medicare and F i t federal income tax. So we know that now we just need to figure out what this number is. And if this is our total wages and this is the food of wages, the difference then will be total of payments made to each employee in excess. So we just need to subtract those out. So what pulled the calculator here? We're going to say 2 41 206 minus 28,000. Gives us to 13 206 So we'll put that hair 213 comma 206 Time 00 And that's really the essence of the form. So if we scroll down, then we then have part three. If there's any adjustments. And so, if all of the tax bill food of wages you paid were excluded from the state unemployment tax , multiply here. So meaning if you weren't subject of state tax and you didn't pay the state tax. In essence, you'd have to pay a higher food to tax. Remember, they're linked. So for all practical purposes, for most the time, it's this low rate for Fouda because suta taxes are paid. But if in some search situation they're not. Or whenever you read the law, No, it'll be confusing because technically, the food of tax rate is higher on. And then there's kind of like an exemption if you pay state taxes. Suta, which pretty much every state requires so s. So that, in essence, means that this is the the actual rate for most practical purposes. So that's basically part three. If we go down to part for, then we're going to say total food attacks after adjustments is that 1 68 tab and then the food attacks deposits the same thing as with the 9 41 this is the liability. Then we need the deposit, which should be the same. If we pick up our number, we should have already made the payment. In other words, we're not picking it up here, though this is a liability calculation. How do we know how much we deposit from the GL? So we're gonna go back over here, We're gonna say, here's all the cash payments we made. If we go back to the actual cash payments from our journal entry, we can see that our this is our cash payment consisting of social security, Medicare, food suta F I t. And then here's our second payment that was made and, uh, October. That includes food, food, food. And then in November, we have the same payment journal entry. But it's a lot smaller, not including food or Suta. Why? Because everybody hit the cap, which will typically be the case. We will make a lot of suit and food of payments in the first quarter of the first months of operation. First papal processing F period of a year, and then it will go down drastically. So ah, these were the payments that we have made. So if we have these up, this plus this adds up to that same 1 68 So it's the same number. So we're like, we're saying that we're good. We're good. 1 68 tab 00 So we're telling the IRS the story. Here's how much we owe. We can see the calculation and you could see the liability. Here's how much we paid. Um, and so we can tell him that same story and hopefully we owe nothing after that point. Then if we scroll down, they want here in line 16 report the amount of your food to tax liability for each quarter . Do not enter the amount you deposited you deposited. If you had no liability or quarter, leave them blank. So we want to get the liability per corner. I already filled it out in third quarter here. So if we go over, we may question that. You may say that it doesn't make sense if I look at the deposits. The deposit was made here in October. Ah, and that's like the fourth quarter October, November, December. But remember that that deposit was four. Ah, September's liability. In other words, if we need to get this from the register, not the deposits, if we go back to the register, we can see our quarterly break out. The whole 1 68 happened in the third quarter, none of it in the fourth quarter, because everybody hit the limit by that time. So if we go back to our are 9 40 over here here, that's not it, that's that's not it. Here. We're going to say it all happened in the third quarter. L took place in the third quarter, and then the total will be the third quarter 118. 200 W 2 & W 3 Comp Problem Form 940: in this presentation, we're finally to the point. We've all been waiting for the population of the form W two. This is a copy of a W two from the Iris website at irs dot gov. Just an example form to show us what the form will look like. Well, then use a mock form and excel to pick up our information. Note that the W two form is one that we've all probably received the w two form, telling us how much we have earned and that with holdings that we then use in order to report our responsibility, our taxes and related with holdings on our form. 10 40. It's also important to note that the W two. Once we get it, we should automatically stink and know that when we receive a W two that the another copy has been sent to the government. So the government has a copy of the W two, so we're voluntarily required to report this information on the Form 10 40. However, they're already aware of it on the on the Irish side as well. So if we do not report our information from the W to properly, then will almost surely get noticed on it. We'll get a notification saying that there's an error because it has been reported. In other words, we as the employer, are going to send a copy to our employees as well as a copy to the government. As we can see, this form consists of employer identification number, the E I n number that we're gonna have to report again. That's the employer Special number four reporting payroll taxes, then the employer's name and address control number. The employees first name, last name employees zip code. So all the data information in order to know who we're talking about here and then we'll get into the boxes, which can be more confusing than we may think. When we first look at this meeting, if we were to look at ah w to and say how much does someone learn? Most people would probably look at Box one, but Box one is probably the most deceiving to look at because Box one is related to the federal income tax and it could be reduced by things like a cafeteria plan or retirement plan, so it could be significantly less than actual earnings. In other words, because earnings are, you know, retirement plan and cafeteria plan. Things like that are still significant. There represent earnings, they represent compensation, and they're not included in the wages in Box one. So this this represents wages related to calculating are, um, 10 40 federal income tax. Box two is, of course, the withholdings for the federal income tax. Box three also represents wages but may different from Box one because it has different deductions would be involved. In other words, the 41 K or a retirement plan may not be included as a deduction from Social Security wages worth it would for the wages in federal income tax. And they may have hit the cap here, which will change from year to year, which means that this is not a reliable number either, especially as to how much someone actually earns, especially if there are high earner, because it's gonna be capped that will be used to calculate the Social Security tax. So here's the self security tax and box for Medicare wages probably the highest wages, probably the of the three, the highest, most accurate box toe look at for total wages. It still may not represent total compensation because of deductions from gross wages for Medicare, which could include something like a cafeteria plan. Uh, and we could find that would be reported in box 12 be somewhere in box 12 and have ah on indication which I believe would be a d d. Which would show us what that, uh, Medicare, or what of the insurance would be. And then we have the Medicare tax tax withheld here. Eso, security tips, allocated tips, verification, code dependent care benefits and then not qualified plans. And, um then we've got the box 12 which we're going to report, amongst other things. But we're going to report here. What will often be reported here is, if there's a retirement plan and if there's some kind of ah, cafeteria or insurance plan here as well, then we have these these items which are showing whether there is a retirement plan. So we had to select whether there is or not any room and then the state information down here. State identification number, state wages, state income tax, local taxes in the state with holdings. If we move to a form w three. So the w three form it's gonna be very similar to the W two form in that it'll in essence, it will just basically summarize the data. So if we were, in other words, add up all the W two forms for box one, then that should add up in some to box one on the W three. So you can think of the W three as sort of like a W two. As if all employees were combined into one individual is gonna be the reconcile ing form or the summing up form of all W twos. So you got box one wages box, too. So security wages, box three Medicare wages, which should add up to the sum of all W two, box one, box two and three, respectively. Same as box to federal income tax withheld box for a security tax withheld in Box six Medicare. So let's we're gonna look at it kind of a mock of this form here so that we can fill this out. So we got a similar kind of form. We're gonna fill out the blue area here, and we've tried to give ah, you know, close representation of the of these boxes here. Okay, so we're gonna start with the they'll be to information. And we're just going to try to fill this stuff out as we would from our register, Obviously, would be very nice in a system what this would happen on automatically or auto from a computer system. But we're gonna pick this up so we're gonna go through the earnings records for each employee. So if we go back to the register and I'm screwing up to the top, we frozen the pains. I still froze the pains up here that's gonna be on cell M four and forth and go to the View tab Windows Group, frozen pains and freeze the pains. And then we're gonna scroll to the right to the earnings records. So here's the earnings records. This is the information per employee. And that's of course, what we need when we're working with, um, the payroll. So we'll start with Anthony here. So Anthony's Air First employees and we'll just pick this information up. So first, we're starting with the the wages and compensation I'm going to say that's gonna be equal to and then go back to our register for Anthony Now you would think would be total earnings . But remember, we're going to subtract from that. The, um, for one k, any retirement plan. If the cafeteria. If this was a cafeteria plan, then it would be subtract. Two were saying it's not here. So this is not gonna be a reduction from gross wages, so it's just the 41 came. So there we have that. And then the federal with holdings, the F I t. Something, I, uh, high five equals. We'll go back to our earnings and we're gonna pick up the F I. T is the 9 21 and enter. And then we'll go to the Social Security wages, which equals Ramiele back to our register. And we've got the Social Security wages. It's the same as the total earnings it would only it would differ if they hit the cap or if there's some deduction for Social Security, which would include a cafeteria plan, which this is, we're saying again, that's not so. It's gonna be the 20 note that they're going to be different. Social Security tax withheld. We're going to say equals and go back to our form our, ah, our records and earnings records, and we're looking for the Social Security withheld, which is this item and enter. And then Medicare wages equals back to our records. Now we're going to say it's the total. It would only differ if there was something deductible from Medicare, which would be something like a cafeteria plan. So we don't have anything, So we're just gonna pick. It's just gonna be equal to the total earnings. Then we have the Medicare tax withheld. So we're just going to say that that equals and go back to our registered. We're looking for a chai. So that's Medicare H I hospital insurance. Then we got that. So that's gonna be the major components here. So notes that the most accurate numbers typically the Medicare this one's gonna be accurate here in terms of total wages earned and wage compensation here is actually that the least accurate because it's it could be reduced significantly depending on someone took advantage of something like a retirement plan, which we highly recommend doing if you have the opportunity to do so. OK, so then we're gonna go down Teoh Box 12 A and box 12 A. Is where we're gonna put that retirement plan. So within box 12 a we're gonna say equals and go back to the register and we're gonna pick up that, Ah, 1001 15 And that's the retirement plan. So of course, if you look at a W two, then typically the difference between, say, the Medicare 28 12.5 and box one 1979. 6.85 is represented down here. And if you look up the symbol DE typically will be for some type of retirement plan. Now, if if this was a cafeteria plan, then we would have the cafeteria plan with the d. D. So we're not. Oh, if there's an employer sponsored plan, it would be here. We're not gonna have that here because we're saying that that's included in the wages up in ah, line five. But just note that if you had something like a d d down here, that would mean that yet something like a cafeteria plan and then this number really wouldn't even represent. Of the three numbers, this being the highest number, the most representative of income would still be low too low in order to get to the actual income by the amount of cafeteria plan that would be then reported on 12 B in line 13. Usually there's gonna be different types of three boxes here. I'm just gonna say, retirement plan and put in X to say that we have the retirement plan here. That's basically gonna be it here. So I've got the employee's name and we're gonna leave it that we just want to go through these numbers broadly and see how this thing will tie out, too. Then the w three. So if we scroll back down, we're gonna take a look at the next W two. We got four of these to fill out. So the Knicks W two is going to be here, and we're looking for Cindy Lewis. So if we go back to our register, I'm just gonna scroll down. So if I go to the left a little bit, I'm going to scroll down just so we can see Cindy's data. So there's that and then go back to our W two. Okay, so we're just going to the same thing in box one. We've got the wages. Compensation equals back to our register. It's gonna be the, uh, total earnings. I'm going to scroll to the right minus minus. Ah, before one K right. And not not that it would be a subtract insurance if it was cafeteria, and then we're gonna the federal withholding equals. We're gonna go back to the register and we're gonna pick up the F i t. Then we're gonna go to the Social Security wages equals we're gonna go back to the register and pick up the Social Security differing from Well, it could difference not deferred now. But it could, based on if they hit the cap or if there's a cafeteria or some other reduction for Social Security. Those being the main ones and in Social Security taxes withheld, equals back Teoh our earnings records. We're gonna go to this item, and then our Medicare wages equals going back to your earnings. It's going to be equal to the total. And again, that one would only differ because there is no cap. If there was some deduction for Medicare, such as a cafeteria plan, so enter and then we're gonna go to I 33 equals back to our earnings records, and we're picking up Medicare H I and enter. Okay, so that's gonna be the main components. So security tips, vacation dependent care, non qualified. And then we're gonna pick up the retirement plan equals we're gonna go back to our records and pick up the 401 k And again, if this was a cafeteria, then it would be here and not included in these lines as income. However, it for us is included in these lines and therefore were not reported it here on 12 be. Okay, so then we're gonna scroll down to the next employees. So and we're gonna go over to our register and do the same thing. We're going to scroll down to the next employees. Uh, and that's gonna be Jill Jackson. So we're gonna scroll down, okay? I scrolled took to the right a bit so we could see the data we're gonna be using most and then go back to our information here. So, uh, I'm gonna delete this for now, Okay. We're starting with box one equals Go back to our register. It's gonna be the total earnings minus the 401 k enter, then the federal income tax equals Go back to our register. Federal income tax is gonna be the f i t. Then the Social Security wages equals back to the register. It's gonna be this one still the same because there's no cap, didn't hit the cap, and there's no other deduction for Social Security. And then, uh, I put in the wrong area, it's gonna be here. Social Security wages will be this item and then Social Security inbox 12 the amount that we actually withheld. It's gonna be equal to the O A S t I. And then we're gonna go to the Medicare wages, which will equals back to the earnings record. We're going to say Medicare wages is going to be equal to the total earnings. Unless there was some other type of deduction from it, like a like cafeteria. So we're going to say no, it's gonna be that Medicare withholding equals back to our earnings. And we're going to say that that is the h I hear enter and then so security, uh, nothing here. We got a retirement plan. We should have a retirement plan here and then the other thing we want is our 41 k here. We're going to say this equals go back and pick up the 41 k Okay. And again, no cafeteria plan, because, um, it's included. It's not gonna be d D at least because this would mean that it would not be included in, uh, 13 and five. And ours is a red last. Employees weren't scroll back down. We've got Ah, the big earner, Big earner down here, which is Judy Jones. We're gonna go back, scroll down to Judy Jones. If we scroll over, we're looking Judy Jones here. When it scroll back down and we're gonna go all the way to the right to the data that we are working with with total earnings here, go back to hear Box one is gonna equal back to our register. It's going to be equal to the total earnings. Ah, minus the 401 k and enter. And then box to is gonna equal. And we go back to our register, the f I t and enter. Then Box three is going to equal the social security wages. And this is where she has hit the limit. So that's why we have a different Social Security wages that she's capped out at the 1 28 400 So this number will be differ than this number. Social Security taxes equals and we go to the Social Security tax, which is this number. Enter note. In essence, that's the max tax you can pay because it's maxed out at the cap and then the Medicare wages for this particular problem. That cap could change over time. So Medicare wages back to the register gonna be the same as the total earnings because there is no cap and we don't have any other reductions from Medicare. And then the Medicare tax equals back to the register. The h I enter. Okay, and that's gonna be made of the most of it. We're gonna say that there is a retirement plan and we're gonna pick up the 41 K here in 12 A equals back to the register, the 41 K and enter. Okay, so now we're just going to sum this information up on the W three, so we're just gonna basically pick up all box ones box twos Box five from our information over here. So a box one equals. Let's go back over this number, plus this number for a next employee, plus same number for our third employees, plus same number for our fourth employee. And there's our total wages. We want to reconcile that it should be equal to our totals. If we scroll down to our totals down here, it should be equal to the 2 41 206 minus the 13 13871 for all employees to 27 3 35 So here's the to 27 3 35 and then the federal income tax is gonna be equal, and we'll go back to all the way back up. Federal This number for a first employee, same number for a second employee. Same number four hour third employee. Where's the third envoy? Same number for our fourth employee and enter. And then again, that number 42 to 15. If we go back to our earnings record for all employees, 42 to 15 for F I T. 42 to 15 66 and then we'll go back to our records here. Social Security is gonna eagle on the W three. It's gonna equal self security for our first employee wages. So security wages for a second employee. So security wages for our third employee Social Security wages for our fourth employee and enter. If we double check that number on the W three to our records, we're looking at this number 1 94 6 06 That should be equal to the 1 94 6 So six inthe e so security tax withheld for the W three will equal the tax withheld for R W two. First employee for the deputy second employee for the W 2/3 employees for the W two fourth employee enter and then that number Social Security tax withheld should match our earnings records for all employees. 12. 65 57. Back to our W to 12 65 57. Medicare Last 11 Hey, school over Medicare. Wages for the First Employee, plus Medicare Wages for the Second Employee, plus Medicare Wages for the third employees, plus Medicare Wages for the fourth employee intern. If we double check that number 2 41 202 to our records for Medicare, we're gonna save Medicare. Wages. Is total rate wages to 41 206 to 41 206? Yeah, that's right. And then taxes for Medicare equals taxes for the first employee taxes for the second employee, taxes for the third employees for Medicare and finally, taxes for the fourth and boy. And then we can double check that Medicare taxes here. 3497 49. That's gonna be equal. Teoh 3497 49 for the total. So that, in essence, is the W two. In the W three. You can see the W three is just basically summing up all of the W two's on and providing that information. Note that when we look at these numbers, the most accurate number really is this Medicare wages, and it may not even read, represent all wages that have been earned. If there's something that was deducted from Medicare, such as, Ah, cafeteria plan, this number often is not very representative of actual earnings because the social the retirement plan is significant to reduce. And if there's a high earner, this number will not be representative of all. If someone earns, Um, you know, if you have a lot of people over the cap, that'll be too low. So this number is actually probably closest. It is usually closest to actual earnings for the W two in the W three 119. 210 Comp Problem Reconcile Payroll Tax Forms 941s, 940 & W 3: in this presentation, we're gonna reconcile our year informs or 9 40 ones are 9 40 R W threes and are W two's as well as our papal register and our earnings records. We, in essence wannabe, as secure as possible that all of these reports are filled out as well as possible. And that'll save time because if they're not filled out, well, most likely will be going back and digging in in them to fix problems in the future, which can be very cumbersome task. It's much easier to get it right the first time when we fill this stuff out. So it's worthwhile to kind of verify everything as best we can before checking turned everything in on and the easiest thing we could do, or one of the best verifications is just to be able to reconcile what we have. We should be able to look at our numbers and say, I see how these things relate. I see where these numbers are coming from, and then if we find an error, at least we know what what we did. We know what's tying out, and we can then have a better idea of how to fix it. So once again, we're gonna have our payroll register. We're gonna scroll up top and make sure the pains air frozen because we will be looking at the totals at the bottom. We're gonna put our culture on a four, then go to the View tab, the Windows Group, and freeze the pains. And we are really gonna be working down at the bottom here to our reconcile ing screen and looking at this information for the earnings records. And will the payroll register and the earnings records? So then we're gonna go back to our forms here. So the forms that we have are going to be the 9 40 and the 9 40 ones. Now, first week, we can look at this item here and say, OK, here's the the to 41 201 which is total earnings. And we might think that that should match out to the 9 40 ones. But that's not necessarily the case. Let's go back to the 9 40 ones and see if we can reconcile those items. So we go to 9 40 once they've got the wages and tips and other compensation. This for the third quarter. We're gonna add up the 4/4 of that number and see what it comes out to you and see how we could reconcile that, possibly to the year end 9 40 So if we have the calculator here, we're going to say that the 9 40 ones at up to 914 to 4.1 plus and then that's we're gonna go to the fourth quarter. So here's the fourth quarter 9 40 and we only have 2/4 because that's when we started operations. And we're gonna pick up the 1 35 909.9 And that gives us the to 27 3 34 Now, if we go back, Teoh the 9 41 or the 9 40 you can see it. It doesn't match. We've got the 2 41 206 versus the to 27 3 34 So we would say, Well, where does this number come from? Why don't they use to match up? And where does this number come from? This is the 9 41 number. This is the 9 40 number. This is what you would think would be the wages for the year. This is going to be the wages for the year for the 9 40 So if we if we go back to our data , um, we're basically saying that the the 9 40 data is going to be the total earnings. So 9 41 2 of six of the 9 40 looks right. Remember, the 9 41 though, is really the f i T earnings, which means it's really the total earnings minus and arcades. Just the retirement plan. If there was a qualified cafeteria, Plan B minus the health insurance plan as well. So, really, for Q three, this is how it's calculated. So it's the total learning from minus before one K. Same for 24 So to 27 3 35 is what's on adding up the nine forties. The difference, then between what's on the 9 40 the 9 41 is gonna be what's in the 41 K plan? The 13 8 71 So if we go back to the 9 40 we say okay, I can reconcile this to the 9 40 ones, the difference should be the 41 K plan that could give us, you know, some peace of mind. We know exactly what the difference is there. The next things we can do is go to our 9 40 ones and we can reconcile the amounts won't from our federal income tax. We can add them up and make sure that they reconciled to our worksheet. So our federal income tax withholdings are gonna be this. 17 3.26 for our 9 41 This is quarter 39 41. If we go to the 9 41 for quarter 49 41 we have the with holdings line three plus 25212.4 42 to 15. 66. That should match what is on our form here for, um f I t 42 to 15. 66. Looks good. It should also be reported on the W three for f i t. So if we go to the w three for f i t, then we should also find the 42 to 15 66 for the W three. So then, if we go back to the 9 40 ones, I note that the 9 41 zehr really reporting f i t self security Medicare. And that's also reported on, um, the w three. So we can go back and forth and check those off the 9 40 on Lee is reporting food attacks. So then, if we go to Social Security wages again for the two time periods, we're going to say that this is the 9 41 for the third quarter. We're gonna add up the food toe wages. So that's gonna be this 96973 0.5 plus and then we'll go to the fourth quarter. So this is the fourth quarter 9 41 and we'll add up the plus 97632.5 gives us the 1 94 606 Okay, so that's what should be a on our report for the year on our register. I'm going back to our register for away SD I wages 1 94 606 and it should also be on the W two if we go back to the W two 1 90 or w three summing up all W two's 1 94 606 Let's go back to the register and well now will verify the Social Security, Um, amount that was paid. This one could be a little tricky. So we're back on 9 41 3rd quarter, and we're picking up the amount of payment. So that's gonna be Social Security paid. 12 24.71 plus the fourth quarter. We go to the fourth quarter. So that's the fourth quarter 9 41 Oh, I deleted it. Let's add this up. 12th 106.43 for the fourth quarter. Plus And then we'll go back to the third quarter, which is 12 24.71 24 1 31 14 Social Security That was withheld. If we go back to our worksheet, we're going to say that we have self security and we save him. I don't see that number here. I don't see it here. And the reason is this is twice that number. So if we want to find either half of it, which is what we'll see in the W two in the W three, we're gonna take that and divided by two. And there's our 12 65 57. And if we go back to our worksheet for our W three. There's our 12 65 6 57 So remember, you got to divide it out because the 9 41 reports both employer and employee portion. So then we'll go to the ah, Medicare for go to the 9 40 ones again. 9 41 3rd quarter. We're looking at the Medicare here. So if we go to the Medicare for the third quarter wages, Medicare wages 96973.5 plus and then we're gonna go to the fourth quarter here. So this is the Medicare wages. So we're saying 144232.5 2 41 206 If we go back to our worksheet, we're going to say that Medicare is the total wages that we had. So I'm gonna go to the right just a little bit. So there's the 2 41 206 And then if we go to our W three, that should match out here 2 41 2 of six. Now we'll go to the amount withheld Medicare tax withheld. So if we scroll back over here for the fourth quarter, so I mean, third quarter again. 9 41 Medicare tax withheld is gonna be 2812.23 plus and then go to the fourth quarter. So we're picking up the fourth quarter of 4182.74 6994 67 Back to our worksheet. So the Medicare again, we might say him. I don't see that. Ah, for the Medicare, we only see the 3497 That's because this is both employer and employee portion. If we divide it, then by two, there's 23497 49 About if we go to the W three, we see there's the 3497 Ah, 49. So there's there's how we can basically tie out the W threes, the 9 40 as best we can and the 9 41 Of course, the same information down here on the payroll register should be the accumulation of the data on the earnings records as well. And we verified that with these green zero so those to tie out if we add up the earnings records, the same totals should add up for total earnings, Net pay and with holdings as with the papal register. And, of course, we used these earnings registers to make the W twos and W threes or W 31 w three and w twos and the W three. 120. 500 New QuickBooks File: in this presentation, we will set up a new QuickBooks file. We're gonna open up QuickBooks and start a new company file. QuickBooks may open to the prior file we had been working on, or it may open to a window such as this. If it opens to the prior company file that we were working on, you can close it by going to the file tab and closing the company filed. However, you can also just started this new company file from the file drop down without clothes in the prior company file. If you're on this page, we'll also see the create new company icon down here. I tend to like to go to the file up top and say New company file. We're going to start this as quick as possible just to have a practice file that we can set up and we want as bare minimum amount of information in it because that's gonna allowed us to focus in on where we're focusing, which will be payroll. So we're gonna start a quick start file here with his blue button. We're gonna put the bare minimum information and here because it's the test files. So I'm gonna put it s Corp one. It's gonna be our test file industry. I don't want an industry at all because I don't want QuickBooks to give me a chart of accounts. I just want the least amount of accounts to get in our way. I'm just looking at what we're thinking off. Therefore, the industry I'm gonna choose is other or none. What that will do, you'll notice the accounts over here will go away. This is very useful, especially if you want to just start your own list of accounts. If you get good at categorizing the types of accounts, then this is a nice option to have because you really get to customize what accounts will be there. You can change the names if you want. Now, if you're someone that's kind of new or don't know exactly what types of accounts should be there, what account types are, then normally you would want the chart of accounts. But if you have an idea of what those account types are and you don't want excess accounts in there, then it's nice to be able to just set up all your own accounts and not have more than accounts than what you need. And when you want to deviate from some type of naming convention for your particular industry, then you can do so in this format. So I'm gonna say OK, and then the business type I'm going to say is an S corporation and the business has not gonna matter too much at this point in time because we're just gonna be dealing the payroll options will be similar. But with the S corporation type of set up, the reason we're choosing that is because I'm kind of making an assumption that one of the owner or one of the people were going to be pain is the owner, which is a common situation with an escort type of situation. So we'll set up the S Corporation and I'm just gonna create a company file. Once the company filed is set up, you might have some stuff that will be opened up. It's gonna close up any kind of information. I'm not going to any credit cards or set up the payroll as of yet. We will do so soon. Is the new file information. I'm gonna close that I typically like having the home page open, I'm gonna maximize this window. So it's has got as much room as possible. And then I'm gonna go to the view, dropped down up top and go to open Windows list, which I typically like to see. Now it's really nice that quick set up that's really easy to set up. The one thing I don't like as much about that quick set up is it didn't ask us or where we want to put the company file. It just put it somewhere, and that's kind of annoying. So if we want to know where the company file is, now that it is set up, you can go to the file here and we can go Teoh previous. And this will give us the mapping on our computer. And what I would typically to then, is just to take a screenshot of this. So on my computer on my keyboard, I'm gonna say print, screen, and then I'm gonna pace that onto a word document here. That's how I would typically deal with this. And then I'm gonna format this information to crop it to just what I need to see so I can see I want to see that information there and then I'll make it large. And then I can go and find this on the computer so I can pull this over here and say, OK, where? Where is this location on my computer? That if we open the Mac being on a Windows computer, we'll see. It's on the C drive that we have here, which is the actual computer. It's going to be on the owner and then it's on the desktop. So it's actually going to be on the desktop here and then from the desktop. It's in the QuickBooks files payroll. So I'm looking in here for the QuickBooks file payroll, which is here, and then it put into this account Escort one. And so that's the location. You confined it now if you wanted to move it, so I'm going to double click on that. And here's the actual file. If we wanted to move it, all of this stuff has kind of made. It was made when we created the file so we can select this whole thing and copy it and move it. But to do so, remember that she cut it close the program itself. It put it somewhere where you didn't want it to go, then you can locate it. In this format, you can close the QuickBooks file, find it, copy it or cut it right quick and cut it to actually move it and then go on, put it wherever you would like to do so because it's a new file, there's nothing in there. We don't have to worry too much about losing it as long as once we open it in the new location, it still opens. What we do want to do is be able to organize this information because these QuickBooks files do get large. And so it's really nice that we can use these different kind of company files. But you do want to put them somewhere so that so you don't clog up your computer with too many files all over the place. I'm gonna put this over here on our desktop. That's QuickBooks Files folder, and then within that section, I set up a folder called Escort One. Within their there's gonna be our practice file that will be working through with this practice problem 121. 505 Set Up Manual Payroll: in this presentation, we will set up manual payroll within QuickBooks. Here we are on the home page. We have the open windows open. You can open the open windows by going to the view dropped down and the open windows list. We're gonna go to the manual payroll by going to the Hope Help Drop down and the QuickBooks and desktop help. You might think this is a little bit unusual, but QuickBooks doesn't make the manual payroll something that is easy to set up. In other words, if we go to the payroll items down here to turn on payroll, they don't give the manual payroll option there because they really want us to either purchase the payroll. They basically want us to purchase the payroll, but that might be good. There might be a good reason for that other than just purchasing the payroll. And that is that payroll is a difficult thing, and they don't recommend us doing it with the manual payroll. However, the manual payroll really helps us to test payroll and see how it all fits together by forcing us to do a little bit more than the automatic payroll will dio in other words. When we use the automatic payroll, it'll kind of work completely dependent on it. And when there are mistakes that happen, or if there's a problem, we may not know how to go in and troubleshoot that problem because we don't know exactly what is going on. It's just a bunch of data for us, so we'll use the manual Penarol up here. And it's nice that they give us the option to still do the manual payroll for practice problems such as this or for certain specific needs within the desktop version. So the fine manual payroll We go into the help menu here and we're gonna type in manual payroll like so. And then I'll just hit Enter to search for the manual barrel option. And we have the first option, which is process Pedro manually without a subscription to QuickBooks desktop payroll. That's the one we want. So we'll select that item, then scrolling down here, set up your company file using the manual payroll calculation. That's the one we want. It's gonna give us a bunch of warning, Say you. Do you really want to do that? Dio we'd recommend you paying for payroll and it would be best. I do recommend pain for payroll once we set that up. But for the practice problem here, the manual payroll. A lot to learn from the manual herro. So we're gonna use that here to get the company payroll down and see how it works. Once again. Finally, we have set set my company file to use manual calculations, so we're gonna choose that item. We're gonna have the okay up top. I'm gonna close this window once we select. Okay, these two little icons, then we'll see some other icons show up, including a payroll icon, the one we push to actually process the payroll. So we're gonna say OK and that we've got these other icons, right? So we've got the turn on payroll here. It's still saying, Hey, you know, you could do You can turn on the actual payroll. We do recommend that gives you that important icon. And then we have the pay employees icon, which is of course, what we actually select. When we process and pay employees. This will help us to generate the paychecks or enter the information into the QuickBooks system. 122. 510 Set Up Payroll Items: In this presentation, we will set up payroll items like inventory items and service items. The payroll items are really the items that Dr Payroll, they're gonna help us to process the payroll. So if we see the payroll items, we can go to the lists dropped down, and we have the normal items. That was typically being the inventory items. These are the payroll items, so the payroll items are here now. We could go in here and set up the payroll anthems directly, but it's best to go in and go through the set up process. Note that some of the payroll items are here already, and that's because these air the federal items and we're gonna focus more on the federal United States federal items because those will be somewhat standardized. The states will change from place to place. Note that once we get the understanding of how payroll generally works, then the system will be similar, no matter what what type of process were using. The percentages, in other words, will change. But the general ideas of how the payroll process is gonna work will be similar, and many of the states will follow the practices of the federal process in order to process the state information. So this stuff will be standardised as we go from state to state. Note that then it would be more and more advantages depending on the state. We are in to purchase a higher quality of payroll to get help with those states individual needs, because the states can complicate things, given the fact that they will differ from state to state, whereas the federal information is more standardised and therefore more widely well known, easier to find information on it and easier for software such as QuickBooks to standardize . Now we could go through here and inter items, but like we say, we're going to go to the employees up top and we're gonna go through the payroll, set up process here. So we're gonna go to the employees, drop down, payroll set up. This is going to be the same no matter what type of paper we are using, because we're gonna have to enter this information into the system. In other words, whether we be using a manual process or we'd be using some type of pay process, we're gonna have to set up these payroll items in order to get this process working. Once this is set up, if it's set up well, the payroll should run smoothly. If it's not set up, well, then we're gonna have problems. And we may not know when those problems come up or what the problems are. Until we run quarterly reports or the year in reports and realize up, there's something wrong for the process here. So we want to go through here and set things up as best as possible from the get go. So we're going to go through the introduction You could skip through, of course, on the left hand side, and we're gonna go straight through the welcome information, the whole set up process for the payroll set up. If we take a look at their payroll, sit up checklist, we're gonna give some items it's worth going through here. You've got the company information and employee information and tax information that will be necessary. Any payroll history as well will be necessary to enter the paper. Note that payroll into a new system is best done at the beginning of the year. If you do have a system, where you going to switch the payroll in the middle of the year. It's possible, but it causes problems because there's some cats that happen with with certain types of tax calculations. So it's best, if at all possible, to try to switch any payroll information services to whatever that may be, whether you're going to a new payroll company or to QuickBooks at the beginning of the year so that all the Pedro can accumulate and all the processing the quarterly returns, the yearly returns can all go together for that ocular year calendar years typically, out payroll is done. If you have to change in the middle of the year, you can do so. Just be aware that you got some caps and we'll see those as we go and you'll you'll see as if someone hits these caps on some of the payroll calculations. Then it would have just the way payroll would be in. The only way we would know that is if there wasn't a new accumulation of payroll throughout the entire year in the system. So just be aware of that information as we enter this, we're gonna enter this as of a new company, and so we're gonna enter it and start in entering payroll at the end or around the third quarter. However, it's a new company, so we don't really have that problem. If we have continuing payroll and we switched from one system to another, then in the middle of the year, then that's when there could be issues. And we want to be careful with that with that switch. Okay, so we're gonna go through this process and continue, so we're gonna go through the benefits here, So we're gonna continue and see what we have in the benefits. This is going to be the D felt. Choose all that apply salary, hourly, wage, overtime and bonus. We're gonna keep all those items. These there are the typical types of payroll. So we're gonna keep these items. Even if we don't plan on having bonuses or anything like that or even salary, it doesn't hurt to have those items. Typically, these are gonna be more unusual if we have commissioned tips and piece work. And that's like if you get paid as you make something, so you get paid by the piece that you make so these air are less common, especially this one tips can cause a problem. If you're in an area that has tips, then you want to do some research on the best way to deal with the tips because they do have payroll implications. That could be a little bit confusing and same with commission. So you wanna look into those and just make sure that you're in compliance with the way the commission's should work and way the minimum wage law should work in your region, and we're gonna keep with standard here, however, so we're gonna finish this item. And so it's now it has the review of the information it typically will will have the hourly rate over time being time and 1/2. So that's gonna automatically calculate overtime. So we're at whatever region were in. If there's an overtime situation, then we pay time and 1/2. Whatever. The current rate is time 1.5% like a 50% razor increase. So we're gonna continue on that. We're gonna now go into the benefits. So if we select these items, we're going to say, What do we have? So what kinds of insurance benefits do you provide now? Insurance. The huge issue. So we want to make sure that we get whatever insurance items we have correctly. So if the company doesn't have insurance within the system, then that's you know, that makes it easy. If we've got health insurance that we want to know how we're gonna deal with health insurance, dental and visual insurance. And if you have multiple employees you want basically know what your options for these types of insurance plans and then set those up, we could set them up in the QuickBooks set up. We're gonna go with the health insurance here. Other insurance we have group life insurance on. You could take a look at the examples for each of the So we see here, the the I. R C. Section 79 provides an exclusion for the 1st 50,000 of group life insurance coverage provided under a policy carried directly or indirectly by the employer. So that might be a way these airways, that that a company can help the employees in both benefit because our goal is the employee herb will typically be. How can we pay the employees as much as possible without it costing us anymore? How can we do that, we can limit their taxes. So if we could set up anything that will be set up to something like a health insurance, something like the life insurance that will benefit them by resulting in them, paying less taxes and it doesn't cost us anything except for the headache of setting up something like something like these benefits, then that will be something worth looking into. Typically. So fringe benefits or anything that we can give to the employees where they don't have to pay the taxes on it, whether the income taxes or payroll taxes is worth trying toe, trying to look into and see if it's something that that's option for your company. So health savings account another. You can take a look. A look into the options for his health savings account. Set up a company contributions or employees deductions for contributions to health savings account so you could read up on the health savings account escort Medical. This typically has to do with owners that would set up an s corporation. We talked about why, you know, we might have an s corporation where we pay ourselves and we have health insurance information with that as well. That's a typical type of company file we might have. So we might be one owner, a single owner, instead of having a sole proprietor, Have AN S Corp. And therefore the benefits that we give ourselves are a bit different, which could be one of the reasons someone would set up an escort rather than a sole proprietor. So other insurance, medical care, you can take a look at that dependent care. And so those are our options. We're gonna keep with just the health insurance here. So how is health insurance paid? So it could be paid all by the company? And again, this deals with how do we want to set up our benefit program in order to hopefully save taxes? The whole point of this? It's the safe taxes. Because if it wasn't for saving taxes, we could just give the money to our employees and let them deal with their own health benefits. But we want to do two things that could happen here. We could Deb have some kind of group policy which might lower the rates for ourselves and the employees, which would be a benefit to everybody, Uh, and or pay less taxes, which would be a benefit. We're here just for this example. Going to say this is the employee pays for it. So all we're doing is basically taking it out of the paycheck for them and paying it as they go on, possibly providing, you know, the group insurance That might be a lower cost in that situation. So again, look into the different insurance options for the employees and note we can set them up as either something that company pays for or something that the employee, if pulling. And then we're just gonna take it out of their paychecks, just as we would with a withholding if the employee portion to deductible before or after taxes, we're going to see that the payment is deductible after taxes. So that means it's it's no. If you look through the information here, set up a pretax employees pay deduction. If the if your employees premiums are deducted before taxes are calculated, this requires you to have a plan Section 1 25 So take a look at the 1 25 and if you could set up a plan that fits within that, then you can use the information and put the payment is deductible before taxes, which again will be beneficial for the employee taxes. But we have, of course, to qualify. In order to do that, we're just gonna keep the normal payments here. And it's gonna be the after tax withholding time payment. So we're gonna say it next. And then we have the vendor related to the health insurance. Now, this would be whoever we pay, of course, for the because we're gonna keep the money, we're gonna take the money and then pay it, so I'm just gonna call it health insurance vendor. For this, this would again. It would be someone about provider of health insurance, but we're just going to set the vendors so that we can have our example problem here. So we're gonna say finish on that and then continue to the next item. The next item we have is going to be what type of retirement plan do we have? So this is another huge area for tax benefits for employees, And another, in the reason is because of the tax benefits. So if we set this up, we can typically be ableto have our employees give them the ability to put more money into a retirement plan and be able to deduct that or defer the taxes. So that's a huge benefit. If we have the ability to set that up, we're gonna set it up as a 41 k a simple for a one K plan but noticed that that from complex city standpoints, the 41 case is actually I'm more complex because it has a lot more options to it. So some other options for a small business might be the simple IRA. Ah, 403 b is kind of the same, but it's usually for non profit or state items, and then accept is another plan for 57. These are all types of retirement plans, so just note that we probably here for one K the most. But there's other types of retirement options that we, as the employer, could help out with the employees with and or options that we as a known erso proprietor of ah business or an owner of say, if we have an s corporation can set up in order to get advantages for tax savings by contributing to retirement plans. So we're gonna go with a 401 k here and say next and then I'm just gonna call it once again . This is the Vinger. I'm just gonna call it for a one. Okay, uh, vendor. And this would be whoever is we're gonna be paying into for the for a one k contributions. And I'm gonna say finish and there is that we're gonna continue. And then what kinds of paid time off do we have? So another huge thing we gotta think. About What? How do we want to do with paid time off? And how do we want to incentivize that some people have a lot of different opinions in terms of how they incentivise their time off? We're just going to keep it simple and say there's no paid time off here. And so we're not gonna be dealing with the paid time off in this example. So we'll say finished, then we've got the miscellaneous information, tell us about anything else. So cash advances if we're taxable fringe benefits, so they're going to get something other than cash. That's taxable mileage reimbursements, miscellaneous additions. Again, we can go through any of these explanations if we have questions about how QuickBooks, you know advises on those garnish mints. If they're gonna be, this is where their court leave. They have mandates by the court to take money out. We have to give it, take it out for them and give it to somebody else. And then we've got the union dues were actually gonna have union dues on this problem. So we're going to select the union dues donations if they want something to be taken out for charity just straight out. And we just pay it automatically so I don't have to see it or deal with it. They just get paid directly. Miscellaneous deductions. So we're going to We're just gonna choose the union dues here and say next. So then we're just gonna call it union dues. Uh, vendor? Who do we pay for union dues? Jimmy Hoffa. We're gonna put in here Union Dues Vendor will have, and then we'll say, finish and continue. Okay, so then we're going to set up our employees, and I'm just gonna set up one employee for the example in here, and then we'll go set up some of the other employees through the set up in poor he process . So we're going to say next and now this is just gonna be we'll see the similar process when we go set up new employees who will put the information in here. This would be information we would get from the W force will do this fairly quickly and then we'll see it again as we enter more, uh, more of the employees are going to have been Anthony More tab tab in O r. It's gonna be Anthony more. Ah, we're gonna print paycheck. That looks good. Employee status active. Correct. And we do need an address in this field. I'm just gonna typing at California location here. So 10 11 North Beverly Drive, Beverly Hills. This is actually ah, home for sale at this time. It's quite it's quite expensive, but that is going to be the location. We will enter here, and we're going to say next on that and then the Social Security number that we will have This will be on the W four. I'm gonna say it's gonna be 681 848347 date higher. We're going to start our business here. The new company filed a payroll file is going to start on. Uh 08 We're going to say, 08 a one. It's gonna be 2021. We're gonna enter all this information as of 2021 year, So 81 2021 we're going to say male, and that's all we need. They're going to say next, So wolf keep will be hourly will be hourly. We're going to say that the hourly wage will be $25 and we're going to say that there is over time, time and 1/2 for the overtime. We're probably not gonna be having a bonus or double time rates there, so we'll just keep it at 25 should be just time and 1/2 and should calculate for us. We could type in the amount, but it should calculate for us based on the time and 1/2. So let's keep that for now. We're gonna go next, and so he's gonna have the 41 K plan till it's about the additions. We've got the 41 K plan. We don't have the matching here, so we're gonna keep a very simple for one K plan. It's just gonna be the the employee entrant into this. We're not gonna get into the details too much on on the 41 case specifically because that's a whole other issue in and of itself. We're going to say the health insurance as well, health insurance here, we're gonna put in the amounts, which is the 41 King. I'm just not sure exactly where we got these amounts, but say that's before a one K in the health insurance. We're going to say that the health insurance will be 1416.67 This is I'm taking this from the problem that we had and then union dues. We're gonna keep that as well. And that's gonna be eight. We can double check these, and we will after we set this up in the employee centred as well. So we're going to say next and said we're not gonna have a direct deposit. If he were to set up direct deposit, it would be here. So that's a nice option tohave within four employees and ourselves. And so we're gonna say it's gonna be a California, Uh, and we're really only looking at the Fed. But I'm gonna keep the Suta because pseudo, as we've discussed, it's kind of linked Teoh the food tests of state unemployment and federal employment. So we're gonna keep California here, and we're going to say that this will be California as well. While working, Did Anthony more work in any other state? Know if there was different states than that becomes a problem begins a little bit harder. So it's nice to have everything, at least in one state. If we're gonna be running this and so on and then we're gonna say filing status the filing status. This would be gotten from the W four that the employees would fill out. We're gonna say married allowances were going to say four extra allowances, no extra allowances. Nonresident alien doesn't apply higher act. Not a qualified employees were going keep. All of those were subject to Medicare, Social Security and federal unemployment. So we're gonna keep those items, and that's what's gonna keep those standards here. Say, next. We're gonna say, filing status. California is gonna also be married. We're gonna keep the same allowances. That four. This may not always be the case that might have different allowances for California than then the Fed, but we're gonna keep it the same here. Estimated deductions extra with holdings were keeping, That is, as is, we really only want toe captivate the unemployment. So I'm gonna keep that I'm not going to deal with the employee training tax and the disability again. Those are going to be specific to the state And what? And so those will change from state to state. I really just want to focus in on the federal information, and the types of taxes for the states will be similar from state to state. But I don't want to focus in on one particular state for this particular example problem. And again, if, if we are doing different states, it is best to have the software that will kind of will help guide us on the state on a different type of state regulations. So we're going to say next and we're gonna say, set up wage plan. We will just keep this as is and finish. It's saying we're missing some of the state information I'm going to say okay, and again, we'll double check this as well. Once we go back into the employees center. So we're gonna continue with this Now we're on the tax information. We're gonna continue here. So here's our information here. The federal taxes we set up for you, It says that's great. Looks good. We're gonna continue with that. Now we've got the E d. D. Taxes and state taxes and unemployment. Now, these taxes will differ often times not only from state to state, but from from company to company so they could vary. So in other words, the system can't always just give us the percentage, because it may change not only by state but by company. We're gonna type in the unemployment company rate here, and we're gonna type in 5.4. So 5.4 and finish and continue. We'll keep the payee as the United States Treasury. Basically, the IRS will keep it at quarterly here and say next. And then we got the United States Treasury. We're gonna say that the payments once again I'm gonna keep it. I'm gonna go to monthly for the payments as basically the default next. Then the e d d. I'm just gonna keep that ass is I'm gonna type a California number again. I don't want to focus on the California, so I'm just gonna try to go through these so that we can continue with the problem. I'm gonna keep this hung monthly and then say next and then we've got the e d d again. We need some type of number payment amount we'll keep at quarterly and next and finished. So those California payments don't worry too much about Those were really focused on the federal payments here, and that's what we're So we're just gonna enter that information so that we can see it go through and mainly focus on the federal information Continue Now it's telling us if there's any year to date information, we're gonna have to enter that we talked about that previously. Basically, if you had prior entries into the current payroll period, we will be working on, then. That's gonna cost some kind of issues because the payroll system, in order to calculate some payroll processes properly, it needs to know all the payroll for accumulation of the year. So really, you really want to do this as of the beginning of the year or at the start of the company If it's a new company file, then you can. You can started in the middle of the year won't cause the same problem. If the continuing payroll and you're just putting it into the QuickBooks system and you already had payroll running throughout the process throughout the time period, then you gotta have some added issues to get that information into the system in some way. Somehow, that's going to say, Has your company issued paychecks for this year? This doesn't include independent contractors were talking paychecks, not 10 99. I'm going to say no, I'm going to continue on so we'll continue here. You have finished the payroll process. So now we're gonna go to the payroll center and there we have set up the payroll process will open up the payroll center. Here's our one employee, and now we're going to go through here. And next time, make some adjustments to this. We're gonna add a few bit more. Employees were going to see that the employees air set up. Okay, We're also going to go to the payroll items as we started with in lists, and we'll go to the payroll items list now and you'll notice we have more payroll items. So now that we've got this basic kind of set up through the interview process, we're gonna go back into these items and see if we need to make any tweaks and adjustments to them. 123. 515 Add Payroll Accounts & Adjust Payroll Items: in this presentation, we will add payroll accounts and adjust payroll items. Here we are on the home page. We currently have the open windows open. You can open the open windows by going to the view drop down and selecting the open windows list. What we're gonna do now is a just and add some accounts and we're gonna do this by adjusting the items. So let's see what we have so far and how we can make these adjustments. If we go to the lists up top and look at our items for payroll, we're gonna go to lists and payroll item list. Then we see that we have just created all of these items related to payroll. This is gonna have to deal with how we're gonna process payroll. What's the wages for payroll and the deductions that we're gonna have a payroll equipment, payroll, taxes and disability and insurance and Medicare and 41 K plan and all that great stuff. As we set these up, QuickBooks is gonna have to record this information Two particular counts on the trial balance. When we set things up in QuickBooks, it defaults to a very, very basic kind of accounting system for payroll, meaning a groups. Everything that's a pair reliability or everything that we withhold into a payroll liability account just calls it payroll liability and all of the wages and expenses on the expensive side of it. Whether be payroll taxes, whether it be different types of payroll salaries, payroll versus other types of payroll, hourly payroll and what not, it puts it all into one payroll expense account. That is easy on one perspective, because it just all we have are these two accounts. But it's also more complex from some perspectives because it doesn't break out that information that we might want broken out. In other words, we might want the liabilities to show who we owe. Do we owe the Fed we owe the state? Do we owe the union? Do we owe the 41 K Plan insurance stall grouped in the one liability account? That could be a little confusing. So here we're gonna go through and customize it. We'll look at another payroll option later where we just keep the simplified form. And if we have a really simplified payroll, which is a couple things 12 employees and we don't have a lot of information in it. Other than that, then we could just keep that simplified default form. If, however, we want to see more broken out, we want to see more detail, more information than we can adjust the payroll items as we adjust them. Then we're gonna add accounts to the chart of accounts. So in other words, if we go to the other list, that's our main list. You gotta lists up top chart of accounts. We'll see. There's a very limited amount of accounts here because we didn't choose it. An industry. So we don't have much in the way of chart of accounts. And the only thing here related to payroll is payroll liabilities and payroll expense. We're gonna break that out because there's gonna be more than just payroll liabilities were going. Oh, once we process payroll, we're gonna A bunch of people were gonna pay the employees, but only the net check, and we're still going to know people were gonna both taxes to the government, to the state government, to the federal government, for Fike, a soul security to the Union, because we're gonna withhold union dues. Teoh the health insurance to the retirement plan. So we're gonna group this. We're gonna break this out to other types of liabilities. Okay? It's gonna match in some ways our excel worksheet here. So we're gonna take these liabilities and enter them into the system. So we'll have the liability account related to the fight for the O A S T I. The fighter that's so security for the H I and Medicare, food, toe suit, the zero liability accounts. So we're gonna create these accounts by adjusting the items for the pair A lightens. So let's do That's gonna be great. Back in the open windows were gonna co into the payroll items and let's go through some of these. We've got the double time the our lead rages. That bonus that for a one k this 41 K plan, that's one that we're gonna want to break out and put into another liability. So I'm gonna double click on that and we'll go into our little walk through window. This looks OK. This is what I want to change. I don't want to just put it to generic payroll liability because this has to do with something specific. It has to dio with the retirement plan. So I'm gonna try to match what we have in our system. I want to create a different liability account. It's gonna go to add new account. It's an other current liability. That's right. And so we're just gonna add a new account, just like we are. If we were adding checks and whatnot into the system, it's gonna default here to the correct account. And we're just gonna add this name. This is the name that we had on our excel sheets. So we're gonna keep those names and that's it. We're gonna save in close and next and next and next, we're gonna change anything else. In other words, keep going next, until it's told me to finally stop doing that. And then if I goto our chart of accounts, then in our open Windows chart of accounts over here now we've created this account. We've created this account, every linked apparel item to it. So when we process payroll, that's when it will be used automatically going back to our payroll item list, then health insurance want to do the same thing, So I'm gonna double click on that saying next, and this is the one we want to change. Once again, I'm gonna drop down, gonna add a new item to it. We'll call that one group insurance payable group insurance because that's what's on our excel sheets. So we're gonna keep that. That's the one we're going to say save and close and next and next and next and next and next and finished. So when we take something out for health insurance than it's going to go into a specific account liability that we're gonna have been pay. We took it from the employees and we took money from their paycheck. We're gonna have to pay it to two there. And we're gonna track that in the liability account chart of accounts over here in the open windows called the liability account of group health and group insurance payable. Going back to the payroll list. We're going to see what else Union dues were gonna do the same thing and double click that . I don't want that just going to pay. Reliability is I want to know who which union folks we're going to be paying. So we'll select the drop down and add new. We're gonna put the name here will be union dues payable union dues payable. And then just go through this once can save it. And we're gonna go next, Next, next, next next finished than the 41 K match. We're not doing the match here, so we shouldn't have a problem there, so we should be okay. I'm gonna make this a little bit wider by Put my cards right on those three dots. Make it a little bit like whiter here. Advanced Aaron Credit income credit. We shouldn't have a nest need for that. I'm gonna I'm gonna leave that for now. Federal unemployment. That's one with double. Click on that one and change it. We're gonna go next and change these items. I'm gonna change the liability account this one up top and we're gonna say new item or new liability, and we'll put in food taxes payable, voted taxes payable and save and close. Not gonna change the payroll. We could change some of the payroll items to to differentiate those out. Not gonna do that. I'm in a group these into the payroll expenses for the food to attacks, so I'm gonna say next and that's gonna be the rate we want. Okay, so all this should be the same. So going to say next and then we've got the federal withholding. Gonna do the same thing here. Gonna double click on that next. And we're gonna change the liability account for the federal withholding to the employees f i t payable. I'm just trying to emphasize its federal income tax for the employees. This isn't our federal income tax for our company that we might be paying here. This is the employees federal income tax that were withholding saving close. Now you might next finished, and then Medicare will do the same thing here. Gonna double click on that item, and we're gonna go to next. And we got the drop down once again. So we're gonna say just the we're gonna have to to liability accounts here. So I'm gonna go the company side and gonna call it Fi ca f i c A taxes payable dash H I for the health insurance. That's another name for basically Medicare. Excuse me? That stands for hospital insurance. So for the for Medicare. So we're gonna say save in close, and we'll do the same thing here. So both the employer and employee portion we're gonna put to the same account. So I'm going to say drop down. This is a liability account. Pay reliability, and we'll take this as well to the FICA taxes payable. H I the one we just set up and OK, next, Next, next, next and mixed. Okay, so then we've got thes Social Security for sole security company, and employees will double click on this item, and we're going to say next, and we want to set these two up as well. This is the liability account for the company paid an employee paid. So we'll select the drop down at a new account once again. This we're gonna call if I cut taxes payable once again, It's part of fighting of the overall plan. This is O A S T I. Another short pan for abbreviation for acronym for Social Security. And so that's gonna be our item. They were gonna save and close, and we'll do the same thing for this account. Drop down. We're going to safe ICA Taxes table O a S D I. So there's those two and next same expense accounts will keep that next next, next and finished. So let me just double check on the Medicare here. We picked up the second, yet the second Medicare has the same one. So we picked up all of these. If we pick up the second Social Security we picked up that that's going to OK, so we're going get here. So the California with holdings I'm not gonna deal with because we're not gonna We're not gonna be dealing with California with holdings disability. Same thing California unemployment We will be dealing with just because it's kind of connected to the Fed. So this is the one reason we really wanted to set up a state in particular just to make sure that this one, because it's kind of connect suta and food to have federal employment state unemployment. So we're gonna say next and that's the expense again. Well, let's go back. This is the one. We want to change the liability account here, so we'll selectively drop down. We're gonna go to add new and will select will make that Suta Taxes payable, Suta, Taxes payable. Okay. And now well, say save and close. And next. And we'll keep all this as is looks good again, nothing here. We don't need to change that. So now, as we process the payroll, like with our chart of accounts in our Excel, sheet here will have an Excel sheet, and we'll take a look at these two. When we enter, this data will basically have a trial balance with these liability accounts breaking out not just a payroll payable, which includes payroll taxes and other things that we took out of the paycheck. Include insurance, but break them out to the actual items and that'll give us an idea of what's actually happening. A better picture of what's actually happening again. Once you know the better picture, then if we have a more simplified payroll and we don't want, we would rather have just one account, the groups, all this stuff together, it's okay to do so. Just be aware that you can break them out. Be aware if you only have one account what is included in that one account, because as we go into the detail for it as well, see, it will be a lot of stuff, a lot of mess, and so we want to be able to sort that out in her head and say, Okay, what is this comprised of? If we go back to the chart of accounts here, we'll see that we've now created all these all these liability accounts and these are all related toe payroll, different types of payroll that we're gonna track in the liability account to give us an idea of what is happening. As we process through these, these will then be used to generate the balance sheet. Thean comfortable these air balance sheet accounts for the trial balance. How, however, we want to format thieves but force these air liability accounts balance sheet type accounts. 124. 520 Add Employees: in this presentation, we will add new employees to QuickBooks. Here we are in the home page. We have the open windows open. You can open the open windows by going to the view dropped down and the open windows list we're gonna be adding new included. He's now to do that. The best way to do that is to go toothy Employees Center, in my opinion, the best way and go to the employee center up top employees, drop down employees center. And then we've got our list of employees, including one so far, Anthony. And so we're gonna add some new employees to this list. First weaken, double click on Anthony. Just double check that everything is set up because we put this in place as we went through the wizard, they set up wizard. So we want to go in there and just say, OK, is everything looked correct from this end. So if we if we double click on Anthony here, then we'll see. Our tabs on the left will see the information on the right now. Typically, this information is going to be obviously some of it necessary, some of it not in order to process the Pedro. When we went through the Wizard, it actually gave us a red ass tricks on the things that we're really essential because those air needed to process payroll. So some of this information here was just information we might want, as we would want for customers. Vendors not required some of it necessary because we then need it in order to comply with payroll regulations such as, of course, name, Social Security number. And then some of this other information we may not need. We might need the date of birth for some reasons and purposes within the system for PayPal as well. Just to make sure that we're in compliance with HR laws and everything marital status. We need it in there in the system for the calculations of payroll. Might not miss be necessary here. We're looking for it in the calculation of payroll. Ah, us citizen. We probably that would be something in compliance that we wouldn't be. I needed to have just to make sure that we are in compliance. Ethnicity Probably not required within the field here. Disability. I nine military not gonna put this information, although it might be necessary in some HR informational needs as well. Human resource is HR Human Resource is so then we're gonna go to the address content the next tab down here and then the address. We don't need it to process payroll were actually not going to include it with with some of the other. But we too, need it to process the W Tuesday. We'll just note that you have to have the address because toe to really do the payroll in full because it's required to give to the I. R. S. When we give the w twos to the address and what not So we do need that. But we don't need it to just practice that the information. So we have the address in here, and of course, it is something we would get from the W four. So here's our w four form. Remember our process mainly would be. This is from the iris website iris dot gov. Just look up W four form and you'll see the employees. You'll see the instructions for it. Typically, we would say OK, fill out the W four. Then we'll take the information from their name. First name, last name, address number of allowances, marital status. So we're gonna enter that information here now, Obviously, the work phone, the mobile phone, fax, all the stuff. Stuff that's really nice toe have in one place. One place QuickBooks is a good place to put it. We might want in other places, too, but we can put it here. Not really required for us to process the payroll necessarily, but ah, useful information. 2/2. So we're not gonna fill it out here, and then we're gonna go ahead information. We're gonna go to payroll information. You can see here. We've got the payroll schedule that we have no peril schedule set up. This is important for the pay frequency. It's defaulting toe bi weekly, and we don't want it to be bi weekly. We're gonna pay monthly. So we're gonna change all of our employees to be pain on a monthly basis and run our payroll basically monthly. Now, remember that we have these different type of payroll processes we could be using, and just obviously, if we're one company, we'll be using the same process. But be aware that if you go from company to company or talk about payroll or do payroll for multiple companies. They may have different needs, and just running the payroll differently will just mean that. Well, it'll look different. It'll change kind of the dynamics, of course, on how much will be in payroll. And you know how many times would process it when we're gonna pay the payroll taxes and all that kind of stuff. So we're gonna be doing monthly for this problem. We've got the hourly rate and the overtime rate noticed the overtime rate is calculating for us. So it's the 25 25 times 1.5 or time and 1/2 100% and 50% 100 and 50%. If we move the decimal over to places, 50% raise for the overtime rate gives us 37.5, then we also have the 401 k These are gonna be the other items we had set up. So we got the 41 k the health insurance and the union dues set up as well. So those all look good. You can take a look at the tax information here, and we've got the marital status four and Medicare, Social Security, federal unemployment, and the state Information. California, California. Four allowances, same info, their marital status. Okay, so we're gonna say, OK, looks, everything looks good. We're gonna say Yeah, QuickBooks added the following taxes. Oh, way. Didn't really want to do that. But that's OK. So now we've got this information. That's another California tax. Some when it closes back out and say that looks good. So employee information we'll keep this as is and say Okay, so now let's do the same thing for some other employees will do this a few more times here , and so we'll enter the same information into kind of a different screen again, we would be getting this information from the W four form. So to start a new employees will just say new employees up top will add, the new employees will have. Ah, we would imagine we've got our w four form right in front of us to help us to enter this information. And here we go. We're going to say this one's gonna be a Cindy. I'm hitting Tab to go through here. Cindy. No middle name Lewis. Her middle name isn't no middle name. It's I'm not gonna include a middle. So Cindy Lewis is gonna appear this way. We're going to say that thesis Social Security for Sandy will be. We're gonna say fire are Let's say 681 214853 This would be gotten from the W four. Obviously, this isn't a real Social Security, or if it is, it's a random one that some random person. So we're gonna say gender, we're gonna say female date of birth. We're not gonna include a date of birth marital status for Cindy. We're gonna say married. And again, you might say, Well, why do I care? Marital status for Sydney other than just informational purposes as an employer because we need it for the payroll because the federal income tax forces us to knew that in order to calculate the proper withholding. So we're not kind of unnecessarily button into the business here between unmarried or single or what's your status? Just we need that to calculate that with holdings here. So we're gonna say the U. S. Citizen, we're going to say yes and again, that's something that we would necessarily need for, you know, to properly process the payroll as well and then we're gonna go ethnicity. We don't typically need that. We could put that information that would be possibly mawr informational for informational purposes. Well, we don't typically depends on the state, I would suppose, but not necessarily necessary to process payroll and then disability. We're gonna keep this as is, And the military status we're gonna keep these as is they might be necessary in some circumstances were going to say the next address again. We're not gonna enter the address. It would be necessary to process payroll because we would need it on the W two forms in order to give to the IRS, but were mainly gonna focus here in this practice problem on the data, the numbers, and we'll look at the forms as well. But the actual address of the employees is not something that, um I'm going to spend our time on so additional information. We're gonna go to payroll information than payroll information. We're going to say that Cindy is going to be once again, monthly is gonna be our pay frequency we will be using. We will say that Cindy is an hourly employees, so we're gonna go with the hourly employees here and we're going to say that the rate for Cindy is 28 an hour. She's also gonna have the time and 1/2 for the double time. So that's the overtime for not the double time, time and 1/2. So it will calculate that that's gonna be 28 times 1.5 or 150% to give us the overtime. We're also gonna have for sending the additional items of the for a one K plan the health insurance and the union dues. Those will be the three items that we're going to include for Cindy. We're gonna put the amounts of 4 40 to 40 these air coming from our worksheet here so that our practice problems so and again we kind of randomly came up with these in our practice data, so we would have to decide what the's abouts are. Depending on the circumstances, Cindy would would have some say into her 41 K contribution as well of insurance. And she may or may not have to say in terms of the union dues that will be taken here. And so then we're gonna say taxes up top. We'll take a look at the taxes. We're gonna say four. Cindy. The marital status, once again is married allowances that we've gotten from the W four. This has gotten from the W four. No extra withholding from the W four. Medicare, Social Security and federal unemployment. Those of the tax is subject to We're gonna go to the state than state tam. We're gonna say that state is California once again, and so that is set up. If we had direct deposit information, we're gonna directly deposit payroll into her bank account to them. We can have this information sick pay information, as we saw with the payroll set up process in a prior presentation could be here as well. We're not gonna be dealing with sick pay in this example. Problem. So let's say okay, we're gonna set up now, and we said okay. And okay. And so we're set up, Cindy. So now we're gonna go back into this for two more employees. Therefore, we'll go up to new employees once again, another employee we will be setting up this employee goes by the name of Jill. So, Jill, I'm tabbing through Tab Tab and JAXA. Jill Jackson and the Social Security four jail. Jackson will be 681311 to a four. Not actually Jill Social Security number. But for demonstration purposes, we're gonna say the gender will be female. We're going to say the date of birth is not applicable or we're not gonna have one. As of now, we probably should in practice here, but we're gonna say Merrill status for jail will be single. And we're going to say that the U. S. Citizen Yes, ethnicity don't need it. Everything else will remain the same as we've seen in the past for prior employees address . Not gonna keep it. We won't go through the explanation again. Additional information and payroll info. So this is payroll info. We're going to say that we have the monthly payroll adding the payroll items. She's gonna be an hourly employees as well. So that's gonna be kind of our default. I were standard, Although we will see a salaried employee next time. That's kind of the hourly. This time the hourly rates gonna be 31. We were gonna pay time and 1/2. Although she is a skilled worker, I'm not sure she should be qualified for the overtime because because of the type of skilled worker we have here, so but 31 times, 1.5 time and 1/2. Let's do that one more time. That should be 31 times 1.5 is the 46.5. So that looks good calculated for us. We're gonna add the same other items, including the 401 K the health Insurance and the Union. I'd actually does Jill work for the U. Does she pay union dues? Not paying union dues? Not no union dues for Jill. Okay, the amounts then will be for the 401 k 3 78 67 1166.67 We got those from basically our example. Problem numbers. Not sure. You know, those are just example numbers. Okay, so then we're gonna go to the taxes up top, and we're going to say that still will be single with the allowances of one. This is necessary. Remember, for the calculation of f I t taxes, we have to have this. We have to have the marital status and the allowances to calculate the kind of complex federal income tax, then subject to Medicare, Social Security, federal unemployment and state. We're going to say, is California as And that's all we need. No direct deposit. We're not gonna do anything to the sick pay. So it looks like that is what we need to keep going forward. We're going to say OK and set up, okay. And okay, a lot of okays. So we're gonna go one more time. We're gonna go to that new employees do this again. This is gonna be Judy Jones. She's gonna be the major. We're going to say that. She's kind of like the owner of this s corporation. She's gonna pay herself the salary here, so she's going to be a salaried employee. So this will be our one. That's gonna be a bit different. We're going to say Judy Jones, Judy and Jones, Social Security for Judy, June will be a 681944688 Once again, not real Social security just for demonstration purposes. Female is the ginger date of birth. We do not have marital status. Beauty Jones will be married. And ah, citizen, we're going to say yes and ethnicity. We don't need. That's all we have so far. We're good to go to the next tab address. We're not gonna fill this out. We won't go through the reasons why. Once again and we'll skip down here to the payroll information, payroll information, she'll be paid on a monthly basis. But this time the item will not be hourly, but salary. This is a salaried employee. Therefore, she's not subject to the time and 1/2. We just have the salary and we're gonna enter the salary add 420,000 year, so it's gonna be the yearly salary, so we're gonna say 420. The reason we're really choosing this number is because we're not gonna run a whole year, and we want to see some of the caps that we're going to hit. And that's going number high enough for us to see some of the larger caps like a Social Security captain. What the effect of it will be on the tax calculations, what we need to watch out for. So we're gonna say then taxes up. Tom, we're going to say that we have the filing status. Will be for Judy Jones. married and three that will help us calculate the federal with holdings and no extra. We got thes set up state once again will be California. And that's all we need. No sick pay, no direct deposit. So we're gonna say OK, down here. Set up now, please. And okay. And Okay. All right. So those are gonna be our employees. We got Anthony more. Jill Jackson, Judy Jones and Cindy Lewis. 125. 525 Process Payroll August: in this presentation, we will process payroll for the month of August, the first month of payroll forth this example. Problem. Here we are on the home page. We have the open windows open toe, open the open windows. You want to go to the view dropped down and open windows list. What we're gonna do now is process the payroll and the paper was gonna be processed in our system every month. We're gonna use this icon in order to process the payroll. So when we actually want to print the checks or enter the payroll into the system, then this is the icon that we're going to Jews. So we're gonna select pay employees and in order to check now, this is telling us we have to set up a bank account because this is an example problem. We never set up a natural checking account, so we'll say, Yeah, let's set up a checking account and we're just gonna call it a checking account, so that's gonna be a bank account. We're gonna call it checking, so we'll just call this our checking account bank account and save and close. We don't have anything in it. That's OK, because again, we want to keep this problem as simple as possible. We'll see that once we start to process some data what the financial statements will look like. So now we're gonna some important points here. We gotta have the pay period, the Indian pay period and the check date. These will differ because the ending pay period means when the paper time is running, the check date may differ. And as you run the payroll system or think through it, you're gonna want to make sure that you know when this process is best to do. In other words, if you want to pay people on Friday, you may not want to run the pay period Indian Friday. You may want to run the week or month or what are you know for the weekly on Wednesday to end on a Wednesday so that you have a couple days to process the payroll on Friday. So it's quite possible on very likely and very common for the end of the paper to be different than when the actual check is processed, like a couple days off to even a week off or so because of that differentiation, and many times we need Teoh. Add up the paychecks and whatnot. So here, we're going to say this is our first payroll is gonna end at the end of August. So I'm gonna say that payrolls gonna be, 080 the end of August, The pay period and is going to be 31. And and I'm gonna make it in 2021. So let's do that again. One more time it's gonna be 08 31 to 1. August 31st. We're working this practice problem in the year 2021. So if you're following that same information 8 31 21 the date working a process, I'm gonna say it the next day. So I'm gonna say the date we're gonna process ISO 901 21 and it's 30 days away. That's okay. And so we'll keep that. So 8 31 21 is the end. The end of the month will be working with August, and then we're gonna pay it on 91 the next day, the first day, the next month. The paycheck will go out for the prior month end payroll and just note the timing differences that that will have cause payrolls kind of on a cash basis. So just be aware this is one of the things that is confusing about payrolls, that timing difference that could happen. So we're not gonna print the paychecks. We're gonna hand right the paychecks. If we were to print them, you select this item and they would have pre printed checks that we would then put into the printer in the correct format. So it's not like it's gonna print on a blank piece of paper. We're gonna have pre printed cheques still that we would have to then put into the printer , and then the check would be assigned a number. Typically that the check numbers will just start off like a typical looking check number. We'll start off with something like that. If we were entering the checks into the system, we would start off with the first check number that we had in the free number checks, and it would go up from there and then the numbers should line up properly. Okay, so we're gonna hand write the checks. So in this case, we would be entering the chicks and all we're doing is entering it into our system and then writing the checks basically by hand would have toe hand, write the checks and give paste up information we're gonna check off. Are all of these items all of these people and then we're gonna change some data. Now note that if this was not the manual system, basically, that's all we would have to do is is enter this information and then enter the hours and QuickBooks would kind of calculate everything and everything would magically work. And we and that would be great. But note that we want to go in through the manual system and see some more functions on what is actually happening so that we can then see when we do the whole system putting together and letting it just magically work that we know what's happening. If there's problems, we can kind of get some idea of what's going on. When we run reports and run paper reports, they're gonna be very there's a lot of information, so we want to have some idea of what is happening. So I'm gonna go into Anthony and we're and note what we have here. The hourly rate and the overtime rate. So we're gonna have to enter in How many hours were worked? This is for a month. Ah, whole month. So we're gonna say 616 hours for the month. That's 161 for the month. And then we're going to say that there was overtime for the three hours. So this is the regular hours, and then they worked overtime. That's going to calculate that their hourly rate here and the overtime rate we already have the 41 K and the health care being taken out of the Czech because we set that up in the payroll items. What isn't being taken out, which would be taken out if we were on the paid system, are the taxes. So we'd have to calculate the taxes. Well, we've talked about how to calculate the taxes. I'm just gonna enter them here so we can see how they would basically come up to this net check number. So these air gonna be estimated taxes here so that we can see how they would be calculated again in the full service payroll system. The the payroll items within QuickBooks would help us out here, and that would be nice. And we will look at some examples of how that might work. So in addition to these deductions, I'm gonna go to the federal withholding federal withholding and say were calculated that to be 1 73 and that would have to change that would be calculated based on the tables. We'd have to use complicated tables to do that. Because of the progressive tax system, the Social Security. We're going to say that the Social Security is going to be to 51.88 That's less complicated to calculate, so we won't go into the calculations here. We see that, but we're going to say the Medicare is going to be for the 58.91 and we'll see these calculations on basically our worksheet when we when we work these out, and that's going to give us the net check of 2025 91. And I'm actually gonna make a change up here. I'm gonna change this overtime hours toe one hour. So we only had one hour of overtime. So then, if we go back down here are check is at 9 1050 that's gonna match basically our example Problem. As we enter this into the worksheet, it's gonna be off a little bit by just rounding because the Excel worksheets gonna have pennies and it's going around. So I'm not gonna It's knocking around toe exactly two decimal places. So we might be all filed some pennies when we compare this to calculations in Excel. But just it's that's because of rounding. Okay, so then we're also gonna have the Social Security. This is gonna be our side that we withhold within the QuickBooks system. So we're gonna match the Social Security, which is here to 51.88 We're gonna match the Medicare. So the Medicare with holdings was this 58 0.91 And then we've got the federal unemployment , which is an employer only tack. That's gonna be 24.38 And then we've got the California unemployment, which we're gonna include. This is the only California we're gonna look at because it's gonna be similar that we're gonna need this component for every state. So that's gonna be 1 82.81 So here is our information for Anthony and we will say save and next, Jill Jackson, we're going to say here that worked hours 170 normal hours, and we're going to say that we have three overtime. So it's the 31 times the 1 70 for the month and the overtime rate times the three hours gives us our hourly. And over time then we have the 41 k the health insurance captain, automatically cause that will be the same each time period. We're gonna put in the state and federal taxes, mainly just the federal taxes. Here we have, then the 702 for the federal income tax thesis Social Security 335 39. And the Medicare 78 44 where they're going to match that over here with the Social Security that we will match at the 335.39 the Medicare that we will match on the employer side at the 78.44 the federal unemployment and employer only tax at 32.46 and then the Suta, which is to 43.43 These are gonna be the employees, er, taxes that we pay these two not showing up over here because they are employer only save. And next here we have Judy Jones, the salaried employees and therefore we don't have any hours for Judy because she is the salaried employees and we have the calculation of the 35,000 after 420 annual divided by 12 which is the 35,000 we have the 401 K and the health insurance already calculated federal income tax. We need to add 7508 13 Social Security to 170 and the Medicare 507 50. That will give us our net check of 21 5 64 37 which should match what's on our Excel sheet with and get a match over here for the employer portion. Social Security matching aunt 272170 Medicare matching at 507.5 and then the employer taxes , which include the federal income tax, which is going to be the 42 the state, which was gonna be 3 60 That's the federal unemployment and state unemployment. The state of California, in this case. All right, that's gonna be this one. We've got one more that we get to do here, so we'll save. And next we now have Cindy Lewis, who is an hourly employees as well, which we're going to say the the amount of regular hours 1 58 for the month overtime hours . We're going to say it zero. So that will calculate at the 4 4024 for the month, the 41 K healthcare has been calculated. We then have the federal withholding to 1/6 E Social Security to 74 29 the Medicare of the 64 15. We're gonna match that over here on the employer side. So we'll have the Social Security, which will be another to 74.29 The Medicare, which will be another 64.15 and then the employer taxes of the Fota and Sue Tab are going to be the 26.54 and the 1 99.8 So that's gonna be our employer and employee taxes were going to say save and clothes. So now we have our pay period and the check date, the check number, and we are gonna basically be thinking that we're gonna hand right these checks and then assigned the check number and then give the pay stubs to the employees as well will take us . We'll see what that means in a second. And so these are all processed now, So we're gonna go ahead and continue with the processing of the payroll, so we'll process will create the checks now, so we will create the checks. And again, if our thought is that we're not gonna print them. If we were gonna print them, we would say print checks and put the checks in the printer. If we're not, we still want to print the pay stubs because what we're gonna do is give the employees the net check, or and then we're gonna have to give them the information. Which one would be how much they earned this check and year to date, how much we took from them, and then there Net check. So it's not enough to given employees just a net check. We got to tell them legally, typically were supposed to tell them what they actually earned, why they didn't get everything they earned in that This is what we took from you from the earnings to give you the net check and the categories for why that was taken. So I'm gonna close these out. And typically, I like to go to the register now and see what has happened. I'm gonna go to the banking and used registers banking, drop down, used register, checking account. These, of course, were written from the checking account. And here's the actual checks. So again, if we were hand writing the checks, then this would be getting them into the system. And we want to basically hand write the checks for these amounts. If we want to see the detail of them, we can double click on them, and that will give us our check. And that'll give us our check detail here. So here's our information that we have input into this check. 126. 530 Review Reports After August Payroll: in this presentation, we will generate and analyze payroll reports after payroll have been entered for the month of August. Here we are in the home page. We currently have the open windows open. You can open the open windows by selecting the view, drop down and go into the open windows list. We're not gonna take a look at some of the payroll reports that were generated by QuickBooks as we entered the payroll into the system. To do that, we're gonna go to the reports up top. We're going to go to the payroll reports or the employee reports. So we want the employees and payroll, and I like to see the reports that they export two Excel. This will give us kind of a summary of a bunch of different reports that QuickBooks will compile. The great thing about QuickBooks is that it can sort all this data in many different ways, and it does that for us. We have a lot of reports we can look at with relation to payroll. Many of them many useful ones are here in the Excel report. If you don't have excel, that's OK. We'll see some other reports within the system as well. But we're gonna use this excel function here, and we're gonna change the date range from a 101212 12 31 2 I'm skin ago for the entire year that we are working on January 1st to December 31st 2021. And this will kind of give it that information to export the proper data to our Excel file that I'm gonna go ahead and say, get QuickBooks data. Here are the Excel sheet, or here is the Excel workbook and the sheets that have been generated. I'm gonna make this a little bit larger so we could see it. We've got here that they call this the employee journal by check, and that's gonna be similar to our earnings record here. So we've got our employees that are going to be listed out, and they're giving the information listed for these employees. We've got the compensation and the compensation is going to have for Cindy, Jill, Anthony and Judy and in the federal taxes, Social Security that Medicare Ah, the state taxes the SD I for a one K and that will give us the total. That's gonna be similar to our report here in Excel, also in Excel, which we call the earnings records. And you'll note, See, we have Anthony more for the first item here, and we've got the items listed out and calculated out the net check for Anthony. So we've got the 1950 on the net. Check here. Then we have the 1950 here. We scroll back over, we've got 2 2004 Cindy Lewis and we've got the ah 2002 here. Now, the net check is often the best thing to look at because it really is going to take into account. Of course, everything that was deducted along the way. So the net check. If the net check is right, then you have a better chance of everything else being right because in that check is a construction of growth pay minus everything that was taken out from it. So if we go through the recipes, we got the 21 5 64 and we've got the 21 5 64 37 21 5 64 37 So this is one way that kind of a standard way we see this payroll construction notice. What isn't in this type of report is going to be the employer information the employer tax if the food and the Suta and the employer sold security and Medicare. So then we got the year date summary, which is a little bit easier on the eyes once again broken out by the employees, giving us both the quarter to date and the year to date information. So notice what's not doing. It's just not breaking out all the information by check within each of the employees, but rather just giving us State quarter and the year late numbers. And so that's just another way that we can sort this and it might be very useful because it will show us a little. It's a little easier on the eyes to look at same kind of detail. Here's the year to date detail just to get another kind of format that we have here now in a kind of vertical formats still broken out by employees. And just look at the different variations that QuickBooks can put this same information all it's doing, its sorting the same information into different looks, different formats, which can be useful this once again, giving the year to date quarter to date. But instead of in this horizontal fashion and what I would call more of a vertical fashion , we've got the hours, what was earned and then underneath it, what was deducted similar to what we might see in a paycheck type step. So this would be information we probably see well similar to what we have seen in the paycheck stub. Also note here that it is giving us the employer information, which is nice. Then we've got the hours that we might have a report just on ours the rates, the state wages and quarterly information. So this is another kind of format a little bit more detailed in this format, giving us the third quarter that being the only core that were in often useful to break this information, of course, out into quarters, because that's how we're gonna be reporting on the payroll tax forms back to QuickBooks. Let's take a look at a couple other reports. If we selected the drop down and we go down to deploy in payroll, the payroll summaries going to one of the most common reports that we'll see here within the QuickBooks. And we're going to say this is a 101212 12 31 to 1. That's January 1st to December 31st and similar kind of break out where you have here, we've got the employees up top. We've got the earnings similar to how we would see it in a paycheck stub total earnings. And then we've got the how much was taken from the employees for deductions including taxes , other deductions here to get to the Net pay. We also have the employer taxes at the bottom. That's why this report is very nice. If we go to the to the full right of this report, we also get the totals here. So often times this total taxes is useful as well as thes totals here that will help us toe kind of sum everything up at the year. And when we do the year in reporting, including that 9 40 ones that 9 40 W twos and w three. These are gonna be the primary reports reports run primarily by date and then reports that are gonna be a run primary by employees. Well, we won't go through all of them. But just know that there's gonna be a lot of different variations if you go down to the employees on on these concepts, and it really depends on how much detail we would want. The ones we looked at are going to be the primary reports. You're basically gonna be wanting to go there most of the time. If we go through the payroll transaction detail report, we'll see another, more detailed items. So no one, 01 21 to 12 31 to 1. That's January through December of the time period we're working on, and this time we're going to get the paychecks broken out here. So it's another kind of more detailed type of report that we can go into, and this is report that we could use it in order to, you know, double quick on and get some more detailed information with the particular paychecks that we are looking at and going into. So those were just a few of the reports noticed that the reports that we put together basically on our Excel sheet, the two formats we had that being the earnings record, which is first by employees, and breaking out this information but employees so we can see what the year to date numbers is by employees and then the primarily by date here. So then we have by date, and then the employees has given us a nice summary of what happens by payroll transaction, which is nice. But it's not gonna be something that we could use to sum up the information at that year in time. This being the earnings record, this being something useful for us to put the data into the system, these were the primary two ways that will see the information and all the other variants many of the other variants. Most of the other variants on the payroll report is some variant of these two types of formats. Breaking it out with more detail, less detail by quarter rather than by each check and that type of information and just basically should switching out that rose and column headers and showing them in reverse format. So just take a look at those papal reports and see how they all basically relate to the same information and tie out to these two basic needs one being this information by date and then by employees, the other being by employees and then by date in order to get that year to date information for each employee. 127. 535 Review Financial Statements After August Payroll: in this presentation and we will take a look at financial statements. The balance sheet and profit and loss after the August payroll is run. Here we are, on the home tab. We have the open windows open. You can open the open windows by going to the view, drop down and open windows lists. We're not gonna open this standard financial statements here. The balance sheet and the profit and loss and see the effect of running payroll on them. We're gonna go to reports drop down, up top were to scroll down to company and financial. Starting off with the balance sheet will open up the balance sheet, changing the date range. I like to go to the customized reports in order to do so so we can get a range that range being no. One, No 1 to 1 to 12 31 to 1 the range, hoping us to drill down on the information if we want to see the details of it. That's January through December 2021 time period that we will be working on for payroll. We're gonna say, OK, this is all the information that has been generated from just processing one pay period of payroll. There's no other information in this file in this QuickBooks file, which is nice because it lets us just zoom in and see the detail of the payroll transactions. What we have here is the checking account. You'll recall that we had to set up the checking account just to run the payroll. There's no money in the checking account, so it's overdrawn. We have a negative, never negative checking account negative asset of the checking account, and then we have the liabilities. And of course, the journal entry has been created for us through the QuickBooks system. So we need to kind of think and think back in terms of what happened here. How was this thing created? So if we take a look at the checking account, of course, we double click on the checking account. It will drill down and we'll see what information is there. And it's going to be the four paychecks that we made. And if we go into any of those paychecks, then we'll see the detail of them will check on the paycheck Here. The paycheck detail this net amount, not the gross amount, but the net amount is the amount that will be taken out of the cash out of a checking account. So if it closed this back out, we could see that summary of that detail here. Here's the earnings. Here's the deductions. Ah, that that were made. Here's the net check, of course. And if we close this back out, that's Net check is what is going to be reported here. So this is just what came out of the cash net. Of course, we still owe something from this payroll because we we owed the employees the gross amount . They didn't get the gross amount. Family got the net amount, so that's where all these other liabilities happen. So if we close this back out of top, closing this back out, we have all these other liabilities that were generated here. And note. This is a lot more detail than we would see if we left the defaults in QuickBooks. If we let QuickBooks just do its thing, it would have put all of these into one account called payroll Liability. But you'll note that their liabilities related to different things. So it's nice, and it just depends on what your preferences asked you whether you want to see one account with all that information it or see some of the detail in here to know what is going on, what's actually happening. And this example will show the details so we could see more of you know what's actually happening. And then in a more simplified example, we can just basically group everything together. Just note that if you group everything together and you look at the detail, then you're gonna have a whole lot of stuff within within that detail boat packed together . If we go into any of these items, we've got the employees federal income tax. If we go into that item, we once again are going to see our paychecks as we will for all of these items because they were all made with the payroll. If we go into each of these paychecks, what part of the paycheck was generating that liability for going that paycheck detail? We're going to say this was the the liability portion. I think that was the federal income tax withholding liability. We were looking at that 1 73 So this is the component, then that's making up that that liability, and we can go through each of these and kind of figure out what's the journal entry? We can rework the journal entry and notice. Reworking the general in Chief without seeing it by paycheck is actually more difficult than really constructing the journal entry. So that's why it's nice to see how this might happen in journal entry format. Those a situation could quite possibly come up where you need to enter the information in a journal entry format, and it's hard to know what that is when you're just processing payroll within QuickBooks because you're basically just taking this information. QuickBooks did it, but it doesn't really show you a journal entry. Show you the kind of simplified way that this breaks down so you can go back and forth and kind of figure out in this format what the journal entry is, how this is being constructed. I just close those two back out, obviously so back here. And if we close this out, we'd see the same information for all of these. Remember, we've got the federal income tax. That's gonna be what was taken from the employees for the Federal with holdings. That's kind of equal to what they are similar or part of the calculation for the year in taxes that the 10 forties that the individuals will make the employees will make it the end of the year. Fight cut Taxes for Medicare for Social Security Fouda was taken from was not taken from the employee. This is an employee, er, tax that we had to pay a note. If we go into this one, it'll be a bit different. We see all the paychecks, but if we go into them, we're gonna say, Where does this come from? Paycheck detail not taken out of the earnings here. It's over on this side. It's it's not coming out of the earnings. It's over and above what the, um gross pay was. So what closes back out, closes back out, close this pack hounds, and then we've got the group insurance. That's something that we owe Teoh. Whoever were helped has its setting up basically insurance. We took it from the employees. In this case, we're not paying, and as the employer, we took it out of the paycheck and now we're gonna pay it. Teoh, whoever we have insurance set up retirement plan. Same thing we owe that to the retirement plan we took. We took it out of the paycheck. We need to put it into whatever the retirement plan holding is because we the retirement plans will be made up of some type of investments or something that we're going to put that into. That money needs to go in there, not just be checking account. And then we've got the suta taxes payable state unemployment tax and in the union dues that we took. So we took that. We gotta pay the union with God. Whoever the union is, we need to pay them. So that's gonna be that information. That's the liabilities. And you'll note that we saw that here. If you see it in terms of journal entries we grouped, we built everything with a journal entries. You could see how these two things kind of fit together. Now, if you build a journal entry on it, then you could you could see these is the employee journal entry and the employer journal entry, which resulted in the same balances we have here for the liability accounts. So the Fike up for Social Security, Medicare, food to suit. That might not be in the exact same order, but we could weaken. Take anti off these liability accounts and see how it would be done, one by a journal entry and then to what is QuickBooks doing and kind of then have a better understanding, hopefully, of what QuickBooks is doing. And if there's a problem to be able to understand it better and hopefully fix it, let's take a look at the profit and loss. Now the other major report going to the reports drop down, going to company and financial, then go into the profit and loss report. We're gonna change the dates from a 101212 12 31 to 1 the year were working on January through December of 2021 you'll note not too much activity here. We didn't We don't have any income. All we've done is run payroll. The only expense we have is the payroll expense. That's all we have. So it's easy to see this way. It's of course, an expense account. Note the here that we didn't break out some of the detail that we should kind of probably break out in in QuickBooks. And that's just the standard, once again, the default of QuickBooks, meaning that it included in here both the employee and employer portion. And that's not really proper, because we should have just the employee portion here and break out the employer portion would be kind of a more proper way to report it and something we might want to or need to do in order to report this for taxes and tie out to our our reports at the end of the year . However, this is the This is simple for us to put it all in there. It's just hard for us. If we want to know what those different components are to, then pull it apart and then check if this tempers right. Is this number really right? Does it include gross pay and the proper payroll taxes? Well, it's a little difficult for us to check those components when it's all grouped into one number sometimes, so we could break those out. You could also break these out by basically category if we had different payroll categories that we wanted to group things into, such as payroll but region or payroll by function, in some way we could have different type of payroll accounts. Notice. If we look at this in comparison to what we have, then our journal entries. We had these two journal entries. If we add them up one for the employees portion and one for the employer portion, we would have the 53 7 47 In other words, if we scroll down here payroll, we broke it out. This is really the employee portion. This is the employer portion. If we add those two up 53 7 47 which is what is here in the court, there could be rounding 53 7 47 42. So that's gonna be the break out there. So that's the payroll process. And again, just this in payroll. If we double click on the detail in here, we don't see a journal entry. What we see within QuickBooks, we see the actual paychecks. These are checks note. So so QuickBooks notes them differently than, like a normal, a different type of check, but it's still just a check free double click. On these, it's check just a special check. It's a paycheck. That's the type of form QuickBooks will use. And in order to know this detail, it's kind of confusing to break this out. But if you start to double, click on it and just see what is in here, what do we have? This This is the 4025. If we go into that item paycheck fourth, as that's the hourly rate, and then we're gonna have the overtime rate, which will include that'll be the gross pay. So these two, then, are the gross pay for Anthony. And then, of course, Jill. Judy, Cindy. And then we've got this item. What is that? The 2 51 88 If we double click on that, what is that? That's gonna be you would think vis amount. But that's not right. It's not really this amount. It's actually this over here. Why isn't it this amount? Because this is included. Included in the gross pay notice. What's not included in this little in their breakout? The net check. That's not there. The gross pay is there. The gross pay is there. And then what? We paid over and above. This isn't a recording of what was actually paid. It's a recording of the payroll liability. So I mean, the funeral expense and the payroll tax expense. So this is really the payroll expenses, these two, which we took their wages from. And then it's including payroll taxes in the same area, which is this item. So this item makes up this number and then so notice. It's only so noticed Social Security and Medicare, these two items are only there one time. We don't have Social Security in there two times, even though we pay them to times because the employee portion is part of their gross pay. They're responsible for its part of the grills. Paige here and then we've got the 24 in the 1 83 are the 24 in the 1 82 related to Anthony . If we go into those two, that's gonna be the federal unemployment in state unemployment. So if you if you go in and you look at the detail in the expense reports, it's a it's it's really overwhelming. If I go into here closing this out, closing this out and I try to look at this detail and say what is going on? This is I've got all these things for Anthony Jail, Judy and Cindy and I only ran one payroll. I don't have four employees. What is all this? It's trying to break out the detail. This is the gross pay Gross pay. This is the pay. This is the employee er, taxes, Social Security, Medicare employed, er, taxes for Fouda and Suta, which it all just put together in this one number instead of breaking out the gross pay what they earned versus the employer taxes in two different accounts. If you if we did this kind of properly, you would think that these two would be in the growth pay and these three would be broken out into the, um, another account called payroll taxes. But again, QuickBooks defaults to this system, which works well. It's easy in that way. But again, it's hard to look at all this detail on trying toe pull it apart sometimes. And there be some needs where we may need to pull it apart, such as possibly for tax preparation at the end of your income tax for the for the company tax at the end of the year, 128. 540 Pay Payroll Liabilities After August Payroll: in this presentation, we will pay payroll liabilities after processing payroll for the month of August within QuickBooks, here we are in the home page. We've got the open windows open. You can open the open windows, going to the view, drop down and open windows list. We're gonna open up our reports. Here are financial statement reports balance sheet here. Reports drop down going down to the company and financial scrolling over to the balance sheet. Standard changing the date range up top in the customized reports 20101212 12 31 to 1. That's January 1st to December 31st for the year we are working on in this problem. That being 2021 Looking at our data down here, we've got these liabilities as we saw in a prior presentation. Now we're gonna go through and pay those. You would think that you could do this by just writing a check, and you could However, if we use the QuickBooks payroll processing feature, they will go through the payment process for us and kind of give us a little bit of help, making it a little bit easier. Although less transparent in some ways to process these payroll checks. So instead of just going and making a check and writing a check to who we owe And of course , if we these air Federal taxes F i t pica pica these owed to the federal government, the U S Treasury or the IRS, in essence, So that's where the that's where the checks gonna go. But instead of us just writing a check for that, we're gonna use the payroll system, the payroll processing system, which will write a check for us. And we'll do that by going over here to the home page within the home page will follow, along with the employees process here where we just basically enter the payroll information . And now we're going to pay in the payroll liabilities, which would be the next step. This would typically happen pretty soon after the payroll. It's going to depend on when it will be do, depending on the type of payroll we have usually depended on, You know, whether we pay monthly or semi monthly or weekly, and how large the payroll is as to what the law will be. It meaning the more payroll we have, the more likely the government's gonna want their money sooner rather than later. But we're gonna we're gonna process it every time after the payroll in this example. Problems. So we're gonna go to the pay liabilities here, and then we've got the date range, the from date range. It's important to note that this date ranges not the date range of the pay period per se. It's the date range of when we wrote the checks Will be aware of that. If we read the little tips here says base base your dates on the dates of the paychecks you issued not on your pay period dates. So we're not really looking at in a cruel pay period Dates as to when we're gonna pay off. The liabilities were going from when was the payroll processed as to win. We're then gonna have to pay the paychecks through the liability system. So we're going to say we process these payrolls for the end. It was the end of August and we paid it in the first day of September. So we're going to say, 0901 21 Oh, now 10 01 to 1 We just need that one day there because that's when we processed the checks for the last Pray periods. And we're paying off that one check that happened, that one payroll process that happened here. So we're gonna say OK, and if that date ranches is correct, we should see some numbers here. Notice if we process the payroll each time that and we only choose one date than it should show up the numbers. If they don't, then our date is off. If, on the other hand, were paying for multiple pay periods, which could be the case that for pain say we pay people daily for some reason or something like that, then we might have multiple pay periods where we actually wrote paychecks for individuals, and this range could reflect multiple days. But for most companies, we will be paying the liabilities sometimes fairly soon after the papal rule was actually processed, and so will basically be paying off one payroll period. We're gonna do some adjustment here. We're going to say to print, we're not gonna print these checks. These this process will, of course, create paycheck or checks, not paychecks. They're gonna create checks that we could then send out, and we then could print thes checks within the QuickBooks system. We're not gonna be doing that here. We're gonna go ahead and review the liability checks, and that's what this will do is it will actually show us the checks that are gonna be generated. As we go through this process, we're gonna check. We're gonna change the dates. 9 15 21 That's gonna be the check date that we're going to run this on. If you imagine our payroll problem. Of course, if we were doing this real time, it would. It would be easier for us to think about the dates, but we are processing the end of the payroll. The end of the payroll period was for the month end of August. We actually wrote the paycheck for the first month in September, and now we're gonna pay the liability at the 15th the middle of the month, September 15th paying off the liabilities that we incurred as we issued the paychecks. And so here's the Here's the date that we actually wrote the check not to pay period the pay period being the month of August in our case, because we're paying monthly as opposed. Teoh Weekly, Biweekly, semi monthly. Okay, so now we just need to check off all that apply here. Now, we're just gonna pay off in our example. Problem The payroll tax related items, not the benefit related items. That way we'll see what goes away in terms of the balance sheet in terms of what gets paid off in terms of balance sheet accounts. And we'll see some that will still remain those being the accumulation of the benefit items . So we're gonna go through this information, so we're gonna keep the 401 k We don't have any in the California payments were not really dealing with the California payments here. We're gonna leave those be, and we're gonna go down. Teoh. The health coverage will leave that be that union. We're gonna leave that. As is the federal unemployment. We want to check that off. I'm gonna pay the federal unemployment. We're gonna pay the federal withholding. We're gonna pay that Medicare notice that checks both of them off as we go. It's employer and employee portion, and there's nothing here in this Medicare for the added tax. And then the Social Security. We're gonna pay that off as well. We also want to pay the California unemployment. That's the one California where Tax were looking into here because it'll be similar for all states in the epidural subject to the unemployment tax. So this is what we need to have checked off. It looks good. We're gonna go ahead and process this. We're not checking off the other information. That's not tax related, so that will remain as a liability. So we will create. Then the checks will go through the review process. It will actually show us the check. There's the one that's going to the E. D D Employment development department, and that's gonna be the California payment that we have here. And then we're going to say, Save in close and let's go to our reports once again to the balance sheet. If we go to the balance sheet, we're gonna update that. I've I've increased the font size quite a bit here so you can see the fun here. But we have the checks, so that's the checking account is clearly negative. If we double click on it, then we'll see. Here's the checks to the E D. D. Here to the United States. Treasury checks the I rest the government, the Fed. So we closed this back out and we scroll back down. We see now that the current liabilities all that is left here is the group retirement plan and the union dues and the retirement plan, contributions and insurance. So those are still remaining. And that's similar, of course, to what we have on our Excel sheet. If we were to do this basically with journal entries after the journal entry four. Paying off this information. So this this general true will give us the detail of what happened. Now, if we want to see the detail of these accounts, these liability accounts one report we can go to with the report drop down, it's called the trial balance. We're going to go to the accounting and taxes and go to the trial balance, changing the date range from a 101212 12 31 to 1. So here is our trial balance. I increased the font size a little bit, so here we have the same information. But it gives us the zero balances, and that allows us to easily go into it with our kind of quick zoom function and and see what's going on with it. So we'll double click on the F I T. And we'll see that we processed f I t. So here's Anthony Jill, Judge Judy Cindy Paychecks, in other words, and a nears the payment. Here's the payment happened and here's our paycheck, which is all going to the same place. It's all going to the government, but they say that they're gonna put it in different funds and do different stuff with it. And so this piece of the paycheck was for the f I T. Component of it. So if it closes back out, this is just gonna give us the detail. The full check, just like these up here, gave us the detail in terms of the full payroll by employees E. Even though we're really only talking about the f i t. Portion of it. So we're really looking at a journal entry, in essence, that QuickBooks has been has created behind the scenes when it used the payroll processing . So to really understand what's happening way, I kind of have to break out the journal entry in some format. Otherwise, this detail, we get an idea of what it is, but it's best to see it in basically journal entry format. But if we close this apple to the same thing with all of these will see the same type of information. Here's the employer and employee portion of the fight attacks for the Medicare hospital insurance. And then here's our two payments. They're both the same check because if we double click on that, we've got the check for the Medicare here. So here's our detail in the Czech, so it'll be the same all the way down here for all these here. I'm closing this out, closing this out, all the zero balances all the way down. The other place we can check is, of course, that the check register going to the banking up top and it used register and go into the checking account. We have now made these two checks. Here's the liability check. It's QuickBooks is kind of nice. They're kind of nice and tell us this is a special check These a religious checks. But if we just wrote a check, if I just wrote a check here, they would just call it check down here. But these ones they call liability check and this is they call a pay check. And that helps us to base to go through the check, register and really differentiate some of those transactions a little bit easier. If we see that type of transaction and we see oh, it's a liability Checko. It's a paycheck. Then it's a little bit easier for us to see that, and we can go through here and say, Oh, well, that's probably processed not by majors writing a check, but through the check system. If we double click on this little item here, it'll take us to each of those checks. 129. 545 Process Payroll September: in this presentation, we will inter payroll into QuickBooks for the month of September, the second month of payroll for our payroll problem. Here we are on their home page. We currently have the open windows open. You can open the open windows, going to the view dropped down and the open window list. We're gonna go down. And now we're gonna imagine that time has passed. Another month has gone by with it in the month of September, and we're gonna process another payroll. So we'll go through the same process again a bit faster this time. We're gonna pay employees. So we're gonna pay the employees by selecting this item on the home tab. We're going to say that the pay period now another month has gone by will be for the month end September. So it's it's saying that's going to be the case here. Why? Because our payrolls gently on a month by month basis. So after we enter the first payroll, it should show up in the proper date, at least for the period end. It should also show up for the proper check date when we write the check. Except for the fact that this is an example problem and therefore we're gonna have to enter the check date. I'm going to say it's at 10. 01 to 1. Meaning I want to say yes, it's OK, but it's 30 days in the future over three days. But we're going to say that this is the payroll end for the month of September, and then we pay it in October. So remember that that date probably is going to be different for most companies. Unless it's all salary base, it's easy to process. It's easier to have a little bit of some kind of room, probably more than a day to enter the payroll and make sure you got everything set up to do . So so now we're gonna go ahead and check everything off. We're gonna leave the account number as is. It's now assigning the accountant. I mean, the check numbers as we go. So this is gonna be the next check that will be assigned. It's gonna be the hand written checks. We're gonna go ahead and check all of them off being our three employees, and then we'll go one by one and will enter this information into them again and process the payroll for them. Starting with the Anthony. We're gonna click on Anthony, enter the same data for Anthony for the second month. We're gonna change the hours to 1 63 and over time to three in overtime, just from on our our example. Problem. So I've gone through and entered the data now. So this is gonna of the gross pay. This should be in there automatically. The for a one k as wealthy health insurance union dues. And then we're gonna skip on down to the federal with holdings, which we're gonna have to input at 1 87 Social Security, 259 63. Medicare. The 60 72 working a map. This is the employee portion. We should then come up to the check of 2050 to 35. That's our check number. And then we're gonna go over to our Social Security for the employer portion to 59. 63 Medicare 60 72 the employer only. Taxes of the federal unemployment 17. 63 and the state suta to 12. 63. Next employee. We're gonna go to the next employees to the same process here. We now have Jill Jill Jackson. We're going to say that Jill worked for 140 hours this time and zero over time. So 1 40 0 overtime. Gross pay being 3440. The 401 k should populate as well as the insurance should be populated for us. We've got the federal withholding for 74 that we need to enter the Social Security to 69 08 That we need to enter Medicare 60 to 93 that we're gonna enter. Where then get a match Over here. Social Security to 69 08 Medicare 60 to 93 federal unemployment 9 54 the state unemployment suit at 1 39 89 This will be the information for Jill Jackson. Didn't We're gonna go to our next employee. So save. And next. Now we're on Judy Jones. Judy Joneses are salaried employees. In essence, the owner of the s Corporation. We're running here, so she's got the 35,000. The 401 k populating automatically, as well as the health insurance to federal with holdings, will be 7508 13 social security to 170 Medicare, 507 50. And then we're gonna enter our side over here on the companies that we're gonna have our portion of the Social Security for the company portion the Medicare portion that needs to be paid no federal unemployment or state unemployment because clearly she's hit the cap for those items already, and therefore we don't know anymore past that point next. So we're going to say Save and next employees, Cindy Lewis, Cindy Lewis, We're going to say, has worked 161 hours for this month and had some over time of one hour of OT That gives our rate up top or our gross pay. Then we got the 41 k should populated on its own, as well as the insurance and the union dues were gonna been input. The 235 for the federal withholding, the two A to 10 for the Social Security and the Medicare 65 98. Then the employer side. That being the to 8 to 10 once again for the employer portion of Social Security. Medicare 65 98 federal unemployment food to just on the employer side 15. 46 suit 1 93 10 That's gonna be it. We're gonna say save and close, and we should be able to process this. Now, this will be the check number. Everything looks good to go. Double check in that date end the month of September. We're gonna print the check in the first month of the next, the first day of the next month. And let's go ahead and continue. And now we will create the paychecks and we're not entering the paychecks. So of course, we're just gonna be looking at the pay stubs. Remember that if we were to run it outside and just pay the employees by a check outside of the system, we can still into the data into the system. And we would still have to provide at least the pay stubs just to make sure that we tell our employees this is how much was earned. This is how much was taken out for the current time period. And here is the same for the year to date as of now. Well, typically, just close this up, close this up and then just check on the check register. If we go toe banking and use register and make sure that those paychecks have shown up on the check register. We're gonna say OK, going down the check register. We see as of 10 1 here, our our paychecks. If we check double check on any of these, we will go back to those paychecks. So it looks like they have been processed as they should. So when I close these back out and there we are 130. 550 Review Payroll Reports After September Payroll: in this presentation, we will review payroll reports within QuickBooks after processing payroll for the month of September, the second month of Pero for our problem here we are in the home page. We currently have the open windows open. In order to open the open windows, you go to the view tab and the open windows list. We're gonna take a look at our payroll reports. I like the first look at those Excel reports within payroll. So if we select the reports, drop down and we are going to go down to the employees and payroll and take a look at the summary payroll data in Excel will change date functions here to be a 101212 12 31 to 1 as January 1st to December 31st for the year were working on 2000 and 21 get the QuickBooks data. We can see here that the first have that we have from our earnings data is gonna be very similar to our earnings record that we would runs in an excel if we're just gonna run through this in a by hand type format that be giving the information by employees and then the check date for each employee. So it's gonna give us the breakout by each employee and give us that detail and the totals as of this point time. And if we scroll through all this will see the Net check and we'll see what was withheld from it. So net check here in terms of totals, federal with only insult security, Medicare state and the 41 K Any other deductions they were taking out? Here's the Net check and that once again, it's similar to what we would do in our register. So this would be the other format that we would want to put this rather than just first seen it by date. Now seeing it by employees e first and then date. So we have Anthony more. We entered our data in at this is the four oo 3 29 now, which would be the 403 29 here. And if we go to the second employee, we would say that we have Cindy Lewis for the Nets. Check for the two time periods 4002 0102 and that's gonna be the 4001 02 here and then for our next net check, we have the Jill 7 4037 should match our 4007. 37 about here. And then we've got finally Judy Judy Jones, 43 1 28 And that should match here for the 43 1 28 for a total of 55 9 71 55 9 71 which should be here 55 9 71 So that's gonna be one example of the reports we can have that we can reform at this, Basically given it by employees. Now, of course, again, you can go through all these reports. It's nice to see it in terms of a year to date numbers that you to date to in a vertical kind of fashion. Same kind of idea. The our lease, the rates and the state information, the deferrals and the quarterly information. So that's gonna be useful information to see it by quarter as well. And this one is giving out. Plus, the, uh, the employees er taxes, which is nice toe have as well. So if I close this back out, we'll go back to the other report that's really useful in reports is going to be the one where the most standard one will be the payroll summary or the payroll. Summary details If we look at the summary and go through the same dates a 101212 12 31 to 1 January through December 2031. Now we've got our our detail, but in more of a vertical type fashion here. So that's how you might more state on the pay stub. But same information. We've got the employees, they got the gross pay and then we got what was taken from them to get to our net checks. Here, double take that last numbers the 55 9 71 which is the 55 9 71 net check. Same information. And now they're going to give us the employees er taxes as well. And this is useful because this is gonna tie out Teoh. The employer side of things, which were not seen on the pay steps, is what we had to pay over and above as the company over and above what was taken out of the paychecks 131. 555 Review Financial Statements After September Payroll: In this presentation, we will review the financial statements, balance sheet income statement or profit and loss after entering the payroll of 4 September , the second month of payroll for our payroll problem. Here we are on the home page. We've got the open windows open. You can open the open windows by going to the view, drop down and selecting the open windows list. We're gonna go to the reports by going to reports up top. We're gonna go to the company and financial and take a look first at the balance sheet, scrolling down to the balance sheet and selecting the balance sheet. Changing the date range. Go into the customized reports to do so so we can see the detail within it. 0101212 12 31 to 1 January 1st to December 31st 2021 okay, so here is our information. Once again, the checking account will be affected. Of course, we don't have any cash in it, so it's a big negative. Now we're paying payroll that we don't have, but that's OK because we can see exactly what's going on with his minimal amount of information in the Yeah, in our QuickBooks. So let's double click on the cash account, and we could see the activity so far. So we've got the payroll for the first payroll. It's gonna list out by check. And if we want the detail we gotta back to basically go into those checks, then we pay to the first payroll in terms of the checks, the liabilities, meaning we paid the paychecks. And then we paid the liability related to what we withheld and the employees, her taxes. And now we paid these paychecks these air the net check. Remember that if we go into any of these, we get the 21 5 64 for example, and we see the net check here. If we go into the check. It's not the gross pay. It's the Net pay. So that's what's gonna be out of the check checking account and that if we go down here to our liabilities, then now we have these liabilities and this should line up to the liabilities we have in our Excel sheet as wells. When we processed the Excel sheet, we saw that we had f i t federal income tax when we do this by a journal entry of the 8004 04 the H I of the ah 9 2003 In handy foot, I increased the fox a little bit here and in the O A S T I, Social Security 5961 And the FOTA and the group insurance, which we're not paying out. So that's gonna accumulate over the two payroll periods? Hasn't been paid yet. Retirement. Suta and the Union do so if we were to take a look at all this information that we had on the Excel Sheet similar type of information. And we were just to add up all these liabilities, then adds up, Teoh Uh, 32 9 29 32 9 29 which is the equivalent here, off by some pennies. So there's the 32 9 29 there. These are our liability. If we go into any one of these, this is the f. I T will notice once again that we had the payroll for the first payroll. We ran September payroll in October. These being one specific component of that payroll. Then, of course, we paid it off here, bringing the balance back down to zero. That's it's just like an accounts payable account, an AP accounts payable account where we would incur liability or like a credit card, and then we would pay it off. So then it goes back down to zero. So now we're incurring the liability again. But if I want to see the detail, I'd have to go into this 1 87 double click on it, go into the paycheck and say, What is that? Where is that one is It's coming from here. There's the 1 87 So you got to go into it and actually kind of peace. Peace. Work it out. It's not a journal entry we can't really see directly where it's coming from. Its QuickBooks is doing some behind the scene works to really put this together in a way that that they think and does give us a lot of information and still kind of make it easier to navigate. But it's not exactly a journal entry, so we can see exactly it's how it ties out in the same way we might witches, debits and credits. So if we close this back out then we can see it. So that's gonna be the liabilities. If we go then to the income statement or profit and loss statement by going to reports, drop down and we're gonna go to company and financial and the profit and loss now dates of 0101212 12 31 to 1. And here's gonna be our payroll information here. Now, if I just go to, ah, the beginning date 10 01 to 1. Then we're just gonna get the payroll for that time. Period is not gonna include the entire year. In other words, so we could just say 10 10 1 a 10 ton 10 1 That's when we processed the payroll. So for the second to payroll, and we can kind of compare that then to what we did on on the Excel sheet and weaken. Better see what happened just for one payroll period. So it noticed what it does here. Grouped everything once again into payroll expense, whether be payroll expense or whether it be the payroll taxes. And the reason that's confusing is because remember that it's really pulling out The payroll taxes should only be the employer portion. So if we were to see this in Ah, in our excel worksheet, we had two numbers. One is going to be the set that the payroll, the other is gonna be the taxes. The payroll is made up of the gross of the growth pay and not netted, not net pay. And then the taxes is what we had to pay on over and above that, the employer portion. So if we add these two up, then that ends up to the 106 on 91 for the year to date. And then if we had these two up, that's what happened to this time period. That's the 52 3 43 67 So if we go back over here with the 52 3 43 it's off by some pennies because of rounding. If we double click on this number and zoom into it, we'll see the detail here. I've currently got the fonts at 11 so I'm gonna make this a little bit larger. We're gonna reduce the memo, don't need the memo. And so these are all paychecks, of course. So these they're all paychecks. If we if we look at this. The current pay check that we are in is the 10 1 because we're just looking at this one time period. If we change the date to the beginning of the year, we have we have a lot more detail. We'd have twice this much about. And eso note that this is just one payroll with four employees and we've got this, um, any activity for the first employed this much for the second, and this much for the third. And remember what is breaking out here? This is the growth checks of her, Anthony here. We if we want to just see if we go into this is just overwhelming amount of data here. But if you break it down, it's not too bad we can say, OK, what are they doing? If you're going to hear, it's gonna be the gross pay. So that's two gross pay, not the net. This isn't the net check like we would see in the cash account. And then under here we have the 1 12 and the 2 59 and the 60. Let's see what those are we got. The 1 12 is part of the gross pay. So these two other girls pay. And then the 1 15 it was the 2 59 in the 60. And so these three then are going to be the employer portion. So my point is, don't get them mixed up with the employee portion over here so that this is the Social Security. This is a Social Security. This also, security is going to be paid by the company out of it checking account. But it was really paid by the employee. In other words, the checks coming out of the company's gonna write the check, but it was earned by the employee, wasn't given to the withholding but was taken from them. That's being recorded as their earnings under the grills pay and thats why this portion is the employee her portion and therefore the employee the payroll tax portion. So we're gonna close that back out, clothes that back out. So that's gonna be the detail here and again. It would be more proper in some cases to pull out those payroll taxes, and in order to do that, it's very difficult here because it's not grouped by whether it be employer or employees portion. It's just grooved by who? We paid four and and so note that if we want to pull out the payroll taxes, employer taxes, it's a little bit difficult. But you can you can see it. You can, ah, weekend. You can weed out what those items are if you if you analyze this report and go through each each line item and or use other reports, of course, within QuickBooks to do so. 132. 560 Pay Payroll Liabilities After September Payroll: in this presentation, we will pay payroll taxes after running Pedro for the month of September, the second month of payroll in our payroll problem. Here we are, in the home page. We've got the open windows open toe. Open the open window through the If you drop down and the open windows list for then get open up our reports, our balance sheet. By going to the reports, drop down company and financial and scrolling on down to the balance sheet. Standard report. We're then going to customize the report date range. Those being 20101212 12 31 to 1 January first to December 31st 2000 and 21. Gonna change the font size just a bit so we can see it to the fonts over here. Font size. Let's make it 11. See if that helps out at all. So we'll say. OK, that larger font, these air the liabilities we need to now pay. We're gonna be pain. Just the tax related items. So mainly to the federal taxes, to the treasure to the government, to the I. R. S. Which is all the reason always. Ah, pleasant activity, so we could just write a check, of course, but we will be using the QuickBooks payroll liability pain process. But I go into the home tab over here. This, by the way, is the way I typically do this. You can also do this by going to the employees up top and go to payroll liabilities and taxes and pay the liabilities there as well. But I typically go down the employees tab and say, This is what I'm doing. I'm paid the employees. Now I'm gonna pay the taxes at some point after we've paid the employees. So we've process the payroll. Now, remember that this is the date of the check, and usually I'm We only need one date because we're paying the liabilities on one payroll process that happened. So the payroll ended at the end of September. We actually paid it on 10. 01 21 is Our, according to our book problems are here. So we paid it on 10 1 21 for the month end of September payroll. Remember to keep in mind are are we using a weekly or monthly or bi weekly or so on and so forth to get the pay period right. And note that the check date will differ typically than the pay period of date. So this is the check date, okay? And now we're just gonna select what we have here. It's not gonna print. It's gonna come out of our checking account. We are going to review the checks, and we want to make the date of the payment on 10 15 to 1. So let's review that The end of the pay period was on September. We process the payroll on October 1st. Now we're gonna pay the liabilities that we took from the employees and the liabilities for our employer portion on October 15th. We're only going to be paying the federal taxes and the state's TUTTO. So we're not gonna be paying the before one key right now. The unemployment for the state, we're gonna pay that one and then when we're not gonna pay union dues yet, we're gonna go to the federal unemployment, the federal withholding, the Medicare for the employer and employee and the Social Security for the employer and employee. That should be everything. That's at 16 3 48 26 So double check that number. That should be our check number here. 16 3 48 26 All right, and then we're gonna go ahead and created that check. Dates. Look. Good. Dates look good. Everything is okay. Everything is good. All right. So we're gonna create the check. Then here is the check that it created to the E d. D. The employee development department. That's the one that went to the state. And so are its been entered. Now, I like to check the checks by going to the bank accounts. So let's go to the banking, use, register, checking account, and then we'll see that we have the e, d. D. And the treasury here, those two payments and their liability checks. So I notice everything we've done here is a check. But they give us this nice little thing which will show up on our reports. Is nice little name of the Czech being independent by the process that we are using in order to make it bit easier to navigate through. So if we go back to our balance sheet then and we refresh, then we should see all the liabilities disappear. Other than the ones for the benefits, the insurance retirement and the union dues payable. If we go into our checking account and double click on the checking account, we'll see these activities there as well. If we customize and go fonts and if we make it a little bit larger 11 again, we're going to say that we say these two checks now at the bottom for the E, d. D. And the United States Treasury are the ones that we had here. If we double click on those, we will then see the check. Note that we have a lot of detail here into this check so but the check amount is for the 15 802 in this case, closing this back out. We also note that these air all checks remember, but it's given us that same kind of name over here in the type field, so it gives us more detail. That's really nice, because if we can say if it just says check, we know that we just wrote a check. If it's his paycheck, we know that we went through the paycheck process to do that. If it says it's a liability check, then it probably went through some type of process payroll in this case for the liability check. So that's nice to have the def differentiates that for us. So we're gonna close that back out now. These items were not paid. If we want to see what was paid, we could go to the trial bounds toe. Look at that. Detail reports drop down. We could go down to the company. We're going to go down to accounting in taxes, trial balance. Let's make this for no one. No 1 to 1 Teoh 12 31 to 1. All right, that's gonna give our information here. And it's We've got a lot of zeros now because all the stuff that we paid has now been paid out. It's nice, however, that we can go in here and we can double click on the activity and see what is going on with it. So, for example, that f I t weaken, double click on it, and we could try toe weed out what happened again. It's gonna be an order by the activity that happened so we can see that we had the first payroll and then we had the second payroll and then it got paid down basically in the middle. So we had the first payroll and we paid it down to zero. And then we had the second papal reprocessed. And here's the paycheck that we just paid to pay it back down. So if we double click this item here, that's going to bring us to our paycheck. This is the amount that we're looking for in that item. So if we close this back out, close this back out. If we could do that for each of these, if I go in here, the paycheck is down here. We have two of them. If we go into them, it's the same check, and it's representing these two items being reported to this account. So it doesn't It's a little bit difficult to kind of weed that out. But if you go back and forth between these items, you can see what it is that QuickBooks is doing here. Teoh to tie this out for us. If we then go to the profit and loss statement, we go to reports, we got a company of financial, the profit and loss. We're gonna go over 101212 12 31 to 1, and we're gonna change the fonts once again. I'll bring this up. Uh, 11. Okay. Okay. And so there's the 106 That's for the year now. So that ties in. If we were to look at our excel sheet for the year, remember, that didn't change. That's the one or 6 91 It didn't change from the liability that we paid the liability being a reduction to cash and a recording of the other side reducing all the liability accounts. So here's the same 106 91. Only activity we have in the income statement that including both the employer portion The employee portion noticed that payroll taxes is included in there. Still, but on the expense side were only seen the employer portion, which should kind of be broken out, but it's included in here, and then the growth check in the profit and loss statement 133. 562 Quarterly Payroll Form 941: in this presentation, we will take a look at our quarterly Pedro form of form at 9 41 after our first quarter of operations. First quarter of payroll, which is actually the third quarter of the year because we started with in the third quarter of the year within QuickBooks, Here we are on the home page. We've got the open windows open. We can open the open windows by going to the view, drop down and select in the open windows list. We're gonna go to our primary report here to see where these numbers come from within the payroll. So we're gonna go to reports, drop down and go to employees and payroll and take a look at thes summary or the payroll summary. A report, a role summary report, and we'll take a look at the third quarter is the first quarters that we started. Entering data, which is the third quarter and remember quarters 12 months, divided by three by divided by 4/4 gives us 3/4 3 months for recorder. In other words, one more time. There's 12 months in a year divided by four per recorder gives us three months for order so Jan. Your favorite march is the first quarter. April May June 2nd quarter, July August September 3rd quarter. That's the month were on that the quarter were on because that's when we started entering data. So we're gonna enter this data in 0701 21 and again, our first payroll wasn't till August. But we'll just enter the full quarter here, and then we're going to say october. Ah, say september 30th 21. So 7127 30. That's gonna be July through September. I'm gonna scroll all the way to the right now it's giving us the information by employees here, and we're gonna go to the right. It's going to give us a summary data for the quarter. That's why we ran it for the for the quarter here. It's just going to summarize that data for that time frame. And if we scroll down through here, we're gonna get the gross pay and then what was taken out in terms of deductions, this 41 K is gonna be kind of on above the line for federal income tax, meaning it's gonna be reducing wages for the tax calculations for F I t. That's why it's kind of broken out up here. And then we've got the tax with holdings and then the other deductions down here. So we're gonna use this number in order to fill up that night 41 which will kind of summarize in a quarterly basis the information we need for the federal taxes, including F i t the they sell security and Medical. We won't go through the whole calculation of a 9 41 again, but because we did that on the Excel sheet, But we'll just see the house. Similar reports within Quikbook can be used to generated clearly if we if we have the paper QuickBooks which will demonstrate in another example, then QuickBooks will generate the report. But we want to know how it's kind of generating the report so that we can go back and troubleshoot some issues. First thing we want to do is check this data. So what we're gonna do is go into this 13 7 19 We're gonna double click on that and see what is included there. We have the three paychecks ones not included, cause this is the hourly paychecks, but will note that we only see the paychecks for one time period. And we would think there'd be three given it's 1/4 and we pay monthly. So you think that there would be three? Why aren't there three? Well, one is because we started in the middle of the quarter. We started in August, so you would think that we would have August and September, but all we haven't We see September here. Where's the other month? You note that we're gonna have this timing issue, and we're going to simplify it a bit for this example. Problem. And what we're gonna do is kind of eliminate the difference between a cash basis and in accrual basis so that we don't have to deal with that in this problem. Will give an example of that in a later presentation, and that means that payroll will typically be processed. When we processed the forms on a more of a cash basis when we wrote the check, not when the pay period happened, and we are gonna calculate it as if they're in the same time period so we can match up with their excel sheet and kind of simplify the process for us and group this information and a quarterly basis. And then we'll take a look at that adjustment in terms of the timing difference in another type of presentation. Another example. So in other words, this paper check here, what's for the month of August? Even though the paycheck didn't go out until September and then we need what we need to do is pull in, then the paycheck that with for September, which was written. I'm gonna change the date in October. So in order to group this information to match on the same basis, we're gonna basically kind of assume that this checker we're gonna we're gonna save this check was written in the same month that the pay period was in. So we can group this by check and not have that time indifference. And hopefully that will be less confusing and not more confusing here. Um, so that's what we're gonna do in order to group this and tie it out to the Excel sheet. So our assumption here, then is that this check? Really? We're gonna pull it into the same time period for which the paper had ended on, which is September, so this would be August in September. Ah, and we're kind of like assuming here or pretending that the checks were actually written at the end of August in the end of September. So we don't have that differentiation, and then we'll go back and look at that differentiation in a later example. So if I do that, then I'm gonna closes back out, and I'm gonna make this date one day up because that's when we actually wrote the check. And that'll include three months of information into this quarter which will tie out to our Excel sheet. So if we go through this, then, uh, we can look at our reports and just see how the reports would be put together. So here's our 9 41 and we have the wages and tips. Now, this is really the f i T wages and tips. So we have to take out the 41 k in our example. So if we go back over here, here's the total earnings minus two. For a one K, there's the 91 for 25. Then we're gonna have the federal income tax withheld, and that's gonna be the 17 03 26 And that's the 17 03 26. Now that number, remember, is just it is what it is, if we could. However, we got to the calculation whether we used QuickBooks to do it or we put the number in there . It is what it is. We can't re calculate it in the 9 41 so it should tie out because we're just gonna take that number directly from the system. It is what it is. If there's an error in the calculation, we cannot double check it on the form, in other words, whereas if we look at the Medicare and the Social Security, we can double check in. In other words, QuickBooks, the form is going to say, I want to know what the wages are, and I want to re calculate it. So the wages in this case is that 96 9 73 that's gonna match the 96 1973 for total wages. And that's because we have not hit the cap, remember? So we're gonna have a problem at the end of the year because we got one high earner Judy Jones, who hits the Social Security cap, and those this number will not then be the one that will be on the 9 41 That only happens if you have a really high earner. So here this will be easy to calculate. It'll be this times this rate. Remember that this is showing this rate is re calculating the tax, and it's showing the employer and employee portion in this one calculation. So this 12 0 24 this to 812 is employer and employee portion, and we can double check that here. One you know, a couple different ways we can say, OK, here's the Medicare 1406.13 times to. So there's the 2812 and we can take the Okay, here's the 6012.37 times two and there's the 12 24. All right, the other way. We can do it. It's of course, a. Okay, here's the employee portion. If we scroll down, here's the employer portion Social Security and Medicare. So security and Medicare, So those are the two ways we can. We can take a look at that. If we go back to our form, then just moving down. This is just a self total. So we don't need nothing new there. This is going to be the total taxes on. And so that again another sub total nothing new. And then down here, finally, we're gonna have the payments that we made, cause remember, it has to end out at zero. So these are gonna be the payments. Now, if we go back over here, we're gonna say this whole report, all the kind of complicated stuff we're looking at has to do with re calculating the tax and summing up the liability side, not the payments I had. The same inside is actually easier. You know, all we have to do is go look at the payments we made. Now we is a little bit harder because we've got to make sure that we pay it to We're looking at the right payment going to the right time, period. But, I mean, it's it's less complicated than all this we're doing here. We just got to know that the two are separate so we can go to reports up top to find the payment and say, Who did we pay? Avenger When you goto vendors and they were gonna take a look at the transaction list by vendor and was changed. The dates from 0701 to 1. Teoh Oh, nine 32 171 to 9 30 Now, if you had a lot of vendors, of course you'd have to find the vendors were paying When the United States Treasury in the e d d you can also go to Teoh the vendors up top and the vendor center If there's a lot of vendors you're navigating and find them here Yeah, so here it is. And then make a report. Run a report for that vendor. So view report as and you'll get a report for that vendor. I'm gonna close this out. Closest. Check out and go back. Teoh this report so we only have one payment here. So and it doesn't tie out to our 31 8 40 Why is that? And that's because the thing we gotta keep in mind is that when we make the payments, we're gonna make them after the time period. The liability payments for sure will be sometime later than the time period in which they're being paid for. For for the most part so and we have to know that because we want to make sure that we have . We have the proper payments on our form here. And if there's any problems, that's usually a timing difference like that. So when was so in other words, this payment here was made for the first payroll that we ran. But then the next payment should have been made on 10 15 21. So 10 15 21. Now we have the new two payments. So this one was a payment on September 15th 4 August. This is on October 15th 4 September. And so those are the two payments we have here and note when we process the 9 41 it's not due until the end of the month, so we would already know these payments. It's even though it's for the third quarter. We're not gonna turn it in to the higher S until sometime in the fourth quarter, so we usually have till the end of the month to do that. So now we're going to say OK, the payments were 16205.79 plus 15802.64 That comes out to 32,008 and 43 cents, and that's a bit different than what we have on the form over here. If we look at the form, we're at 31 8 40 20 cents. So what's the difference if we take a look at the difference? And we say, Okay, there's 30 to minus the 31 8 40.2 on the liability is 168 23 Now, if we go through and say Why, why would that be? There's one federal tax in these payments that is included here that is not included on the 9 41 And that's the Fouda. That's the the food of federal unemployment. So in other words, if we double click on this item and we say, What is this consisting of? We have the these withholding this food of this 1 25 is not included on the 9 41 but will be included on the Form 9 40 At the end of the year. We only have to report that at the end of the year, all sometimes you might have separate checks that would write that out and make it easier to see that. But that's the difference. So if we if we go in here and say OK, that's the 1 25.34 and we do the same for the second check, we closes back out in second check We had Fouda of the 42.63 that's going to give us in rounding difference 1 67 97 134. 565 Process Payroll October: in this presentation, we will process payroll for October, the third month of payroll for our payroll problem and the first month of the fourth quarter four payroll reporting within QuickBooks, Here we are on the home page. We've got the open windows open. In order to open the open windows you go, the view dropped down and the open windows list We are once again going to be running the payroll were jumping forward in time. We're now in the month of October. We have to imagine, as we go through this payroll problem that we are jumping forward in time. We're gonna pay people each month. Other stuff has happened, of course, with the business. But we're concentrating here on the payroll activities month of October 3rd month of payroll that we're processing for this payroll problem. We're in the employee section. We're going to say, pay employees once again within the PAYE employees. It's remember what the dates are going to be. We now have the date at the end of October. We will then enter the period in date at 10. 31 21 you do have to keep aware of this date here because although it could change, it should be in the proper date. As we run payroll, it may not be. And you want to go up there and make sure that it is on the proper date. Otherwise, we're gonna have issues with the timing of the payroll And then the check date we're going to say is gonna be the first day of the next time period, which, if we were running payroll in real time, would typically be the current day. We're going to say that this is the month in. We're gonna actually process the checks the next day. So on 11 01 to 1. And so the pay period is for the month ended October. We're gonna pay it the first day in November. Check numbers should be processing as automatic here, so that should be okay. We're gonna hand write the checks and then apply these numbers to them. And so this should match our checkbook. Then we're gonna check these off, and we're gonna assign once again, going through these items and making adjustments that need to be made in practice. If we're running full payroll going to click on Anthony here, then We would just need to make sure that the hours air okay and everything else will be filled out. We here are gonna be entering the tax data. We're gonna run very similar payroll. Here's the data is gonna be 1 63 and three hours off over time. So this is the correct amount. Gross pay is up and running for old 01 K and the health insurance are deducted as they should be. We then are gonna enter in the federal with holdings, which is 1 87 The Social Security to 59 63 the Medicare 60 72. Then the employer side giving us the Social Security matching at 2 59 63 the Medicare 60 72 . Note. There's no federal unemployment, California unemployment because those air capped off at very low caps. So in our problem there capping off around now. But in most payrolls, if we ran the whole year, in other words, they would be capped off sometime in the first quarter. The 1st 3 months, typically and we wouldn't have them in later months. That's why you really need to see the whole process of payroll to really see what's happening because you'll have some differences like that, even if nothing else changes. So we're going to say save and next. Remember the net Check. This is your check number 2050 to 35. Next check. We're gonna have the 140 for jail. Jackson in terms of hours, no overtime hours. And then we've entered the data for the federal withholding the 4 74 that Social Security the to 69 08 and the Medicare at 60 to 93 giving us that net check of 9 1088 65 Remember that We also need these Social Security 26908 for the employer side in the 60 to 93 for the employers that no food. No Suta. Once again, Jill Jackson has hit the cap and therefore we have no more Suta in Fouda those They're gonna be things that will happen towards the beginning of the payroll process or if we have new employees that happen towards the later components or parts of of the year. Next, we're going to say save in next. And now we're on Judy Jones. Judy Joneses are salaried employees at the 35,000 the big earner here. And so we have the salary of the 35,000 the 41 K The health insurance should populate automatically. We've got the federal withholding. We're gonna have to enter at 7508.13 their Social Security. We'll have to enter at 2170 and the Medicare will enter at 507.50 That should give us a net check of 21 5 64 37 That's to check number, both in terms of the check and to check work check number. And then we have the self security over here saying number on the Social Security as well as the Medicare and Judy, where Judy Jones has certainly hit the cap for the socials for the Fouda and Suta and therefore those are 01 more employees that we get to enter here and that's gonna be Cindy Lewis. Cindy Lewis will have 161 hours of regular pay in the overtime one hour. That should be the same as the prior pay peered, so we should be good going forward there the 41 k Social Security. I mean, the 41 K and the health insurance should be there automatically as well as the union dues. The federal withholding we're gonna enter at 230.0 the Social Security. We will enter at 282.10 and the Medicare, we will enter at 65.98 That gives us a net check of 2001 4.85 hour check number. Then we're gonna go over here to the Social Security for the employer portion that being 282.10 and 65.984 Medicare. Cindy Lewis as well has hit the cap for food A and Suta and therefore those air not there for this payroll period. Save and close. And that should do it. So check the dates one more time. With the end of October, we're gonna pray the process in November 1st, that looks like the correct check number. Everything looks like it's lining up as it should, and therefore we're gonna say continue and then we're going to print the checks and then we're going to take a look at the pay stubs, as we have in the past, just a quick preview of them. And remember that if we're writing the checks were going to give the pay stubs and that's gonna give the current check information the paste up similar to what we've probably seen on a pay stub and whether it be a digital format or on an actual check, we would typically need to see this information. It'll give the current and the year to date what has been earned, what has been taken and therefore what? The net amount of what we have received as employees is gonna close that back out. Close this back out. Close this bag out then I like to take a look at the check register by going to the banking up top and the use register and see if those checks were actually generated within the check register and say, OK, then we're gonna go down here. Here it is. Jail. Jackson, Judy Jones, Cyndi and Anthony. Don't forget about Anthony. We got the paychecks down here. These are actual paychecks. Double clicking on them will give. Get us to that paycheck. Information. Also notice it's useful to go back here and check these account numbers of the Czech numbers and make sure that they line up. If we're actually writing the checks outside of the system, we want to make sure that these checks line up in the same order that we've written them on . If they don't, you can go in here and actually changed check numbers in QuickBooks typically, but usually it should line if you got it all lined up and you have If you're right in the same checks, you kind of want to write them in the same order so that the same check numbers will apply . 135. 567 Review Payroll Reports After October Payroll: in this presentation, we will review papal reports after the October payroll. The third payroll in our payroll problem. The first payroll within the fourth quarter. Within QuickBooks, every on the home page. We've got the open windows open. You can open the open windows, go into the view and open windows list. We're not gonna look at the reports of four payroll and see what has happened after we've entered the payroll for October. The third payroll in our process. The first payroll. Now, for the fourth quarter going to the reports drop down, we're gonna go to employees and taxes. We're gonna export that Excel payroll because that's gonna give us a good summary of these payroll reports. And then we'll come back and take a look at some of the items within the other QuickBooks reports. We're gonna change that date range from 0101212 12 31 to 1. And this is going to be the year that we have profit the payroll for for our payroll problem. We're gonna get that data within the Excel file. And here we have that wonderful report that QuickBooks does for us, and it's great. And so we have The first half is gonna be the employee journal, and that's gonna be similar to our earnings records. So you'll see. Now it's becoming more and more similar to our earnings record here on the Excel file that we generated when we put this information into Justin Excel sheet, if we were to do it by hand, and so that's gonna be the other way that we're going to see. The information is by employees, which we need. And now it's listing out the payroll activity by act by paid eight per employee, giving us the compensation and all the deductions not only in total but and not only just by pay period, but for the intact for each pay period and the total by employees E, which is nice. We're gonna need that information. So if we scroll to the end of this, we can see then that for each employee, we've got the compensation everything that was taken out of their check giving us the net pay the net pay per pay period per check and the net pay now up to date to total. This is what we would need for each employee pay stub. And that's going to be similar to what we have here on our excel sheet. For the we would call it the earnings record typically. And if we double check just the in numbers here, we're gonna say, OK, so this is This is going to be full, Anthony, more self. We go to Anthony More on the register here. We've got Anthony more with at 6055 61. That looks like it looks good. 65 5 were off by some rounding. That's okay. We're gonna say that's okay for our where purposes. Here's the three paychecks for Cindy Lewis. 62076207 If we go back over to the QuickBooks report 16 07 19. And if we go back to our next report here, we're gonna say, OK, then, Jill Jackson, Jill Jackson, 6725 Going back to our report over here. 67 to 5. And then finally, we have the owner of the big earner, Judy Jones, 64693 And that's going to give us the 64693 So you can see how we're basically constructing this. And if you just saw this report, if QuickBooks just generates his report, it's very overwhelming. But if we start to look at the components of it, not too bad, which is basically sorting the same data in different formats, this is still a report that most people don't use a lot because it's still a lot of detail on it. So notice what QuickBooks is doing has some other reports year to date reports similar to data similar data here. But they're gonna group it together in a little bit more. Trim down fashion. We don't have as much information, but it's a bit trimmed down notice. We have the quarter to date and the year to date information now as well. If we go to year to date summary again, broken down, how we might see it on a pay stub. Same kind of information broken down by employees and then activities within their notice. What's not here? The employees er taxes aren't included here, and that's often an issue that we have to keep in our mind. As we look at these reports, hours rates state deferred compensation, quarterly information now becoming more and more relevant now that we have 2/4 were remember, we don't have the 1st 2nd because we started in the middle of the years here here. So because we were just we don't want to go through a whole year of that. Be tedious. So we're going to say the third quarter and the fourth quarter is what we have. And if we went through the whole year, we'd have just more data, but it would still we can see how it's being constructed here. And then we have the total so that's gonna be broken out by quarter. This reports nice because it's also giving the employer information. So the Suta and the Fouda taxes are included in this report as well, which is useful for us if we go back to QuickBooks, then we could see the other report that's gonna be typically used within QuickBooks, which is the main report for just summarizing it. Looking through our data would be going to the reports drop down and we're going to go to employee payroll and then we'll take a look at the payroll summary report, payroll summary, and we're going to say this is gonna be over 101212 12 31 to one's gonna run the full year that we are in. Of course, we've only enter data up through October for payroll. And so here's our information. Same kind of thing. It's broken out by employees and noticed this is QuickBooks kind of go to report so you can see what they're trying. This is the report, then that they think is the best for most people to get the most information and laid out in a way that most people understand because it's in a vertical format where we have each employee what they've earned, what we took from each employee. It shows the net pay for each employee, and then it breaks out on the bottom, the employer taxes. So this report is great. It has basically everything we need a little bit different format than we typically think of in the earnings record that we ah put together here in the in the earnings record in terms off I were date. If we're going to do it by hand, but it's a nice way to see it, And then, of course, we have the total over here, giving us that total information as well. So there's gonna be one of the primary reports, Probably the go to reports. I I like the Excel reports as well. 136. 570 Review Financial Statements After October Payroll: in this presentation, we will review the financial statements after entering the payroll for the month of October . Within QuickBooks, here we are on the home page. We have the open windows open. You can open the open windows by going to the view drop down and looking at the open windows list. We're gonna open up our reports now, starting with the balance sheet by going to the reports, drop down, going down to company and financial and then finding that balance sheet standard report. We're gonna run the dates by going to the customized reports up top changing the dates from 0101212 12 31 to 1 that date range that we will be working 1 January through December 2021 . Then we're gonna take a look at what we have so far, starting with the checking account. All we have is payroll here, so we're just processing payrolls. We can concentrate on that. Therefore, we have a negative checking account. That's okay. If we double click on it, then we'll see what has happened for the year. Just payroll and note that this is also the benefit of having a payroll, I count. So if you're processing payroll and you enter all the data or enter money into another account of payroll account, because then you can really just see all the payroll information you could see how dense the payroll information is. So just having one checking account that's dedicated, in essence, to payroll and putting money in and out of it just to process payroll so that you can have a QuickBooks basically, record this information and see a new account with just payroll and it is nice. So that's something you can do by just setting up to payroll accounts will be aware of that . We've got the payroll the first month we had, and then we paid. And then we paid the liabilities. And then we had the second month that we ran it for note. This is the paycheck date that we ran it on here. So this is for the end of August. We ran the payroll in September, and then we paid it September 15th for the liabilities. So we paid the Pedro of the Net check and then the liability check here given by the liabilities and then for the end of September payroll. We ran the payroll October 1st, and then we process the checks, then for the net checks and then paid the liabilities on October 15th and then for the September payroll. We That was September thin for the October barrel. We have just ran the check on October 1st for the Net check. And we have not yet paid the liabilities. That's what we have so far. Then here, you can see that this information is given by our four employees. If we double click on any of them, let's take Anthony more. Then we can see that this amount reported is the net check 2052 not the gross check that was actually earned here. So that net check is what is, of course, in the cash account. That's what we actually paid out of the checking account. Gonna close this back out and see what else we have here. I've increased the font to 11 so it might be a little bit easier to see. So now we've got the liabilities that have been created as we process the payroll, check these being what we took from the employees and what we over over and above it for employer portion of payroll taxes. So we've got the f i t the h i v o a s d I. And this should match what we have entered into basically our excel sheet So you can see how this happens on a journal entry bases. So if we match all these out to our excel sheet, they should match, as at this point time. If we were to add up all the liabilities at this point time except the accounts payable in our worksheet, that adds up to pull it up a little bit 40,006. 26 on liabilities in essence payroll liabilities. And that's the 6 40,026 here so that you can see how we've entered in a journal entry format in the Excel worksheet. If we see it in Excel, Well, how does it get put in place in excel? Well, if we go into the f i t, we're gonna see again a bunch of data paychecks and then the liability than paychecks. A lot of information here it's broken out by employees once again. So here's the first payroll. The four employees that built up that f i t liability. And then we paid it. Bring it down to zero, just like any kind of a payable account. Then we've got the four next employees, and then we paid it. Then the four next employees. We have not yet paid this payroll period. If we double click on any of these thin, let's take the next Jill here for 74. Where does that number come from? If I double click, I'm not gonna get to a journal entry here, but it's still kind of made in the same format. If I go into the check detail, this is coming from the F I t federal income tax withholding. Which was this 4 74 here. So you got you kind of got a piece it together. When you're looking at QuickBooks, it's making it still debits and credits, in essence. But you have the more detail of each check, and so think about you know, how would that look in a journal entry or versus this format? How can I go back and forth and see where QuickBooks is generating this data? Because clearly these air paychecks and these aren't the net Check this isn't it? Check him out. This is amounts that were drawings from something on the paycheck kind of similar to if we wrote any other checks, the expense side of things or have multiple accounts. So you got to go in there and kind of piece together what QuickBooks is using and pulling from that paycheck in order to make this information closing this back out. The same thing would be true for any of these. If I go into the O A S t I, let's say this is the Social Security. Same idea. We're gonna have all the social Now there's more data here. Why is there more data? Because there's an employer and employee portion. So now if it looks like we have twice as many employees we got Anthony Anthony, Jail Jail, John Judy Jones. That's because there's an employer and employee portion, and then we paid off so and then we have the whole thing happen again. And then we paid off. It goes back to zero. Just like any nice liability type payable account, we would think happen. We want to see that trend. If it doesn't go back down to zero, where that's something funny happened there and that's not good. So and now we're here. And if we go to any of these, let's go Teoh Judy Jones this time 1 2070 Where does that number come from? To go to the check detail where there's 1 2070 that was taken out of the employee paycheck and the employer portion. Both of those makeup stuff that we kind of owe now because we took this from the employees . We took this over and above. That's what we owe on employee payroll. And we're gonna have to pay that to somebody, to the government, to the Treasury, to the iris, to the Fed. So we'll close this out. We'll close this back out and let's close this back out. Now let's go to the profit and loss. Report the income statement by selecting the reports, drop down, up top, scrolling down to company and financial and selecting that 1st 1 the profit and loss standard changing The date reigns once again. 20101212 12 31 to 1. And here's what we have so far the 1 57 eight US 46 Now if we change this date to just the prep, the date that we processed, which means we processed this on 11. 01 to 1. So it's for the end of October. We ran it in November. Then we get basically one month of information. Remember, it's all grouped in there. So now there's just gonna be a ton of stuff in here if we run it for the entire year. It's still a ton of stuff just for one pay period, because QuickBooks is grouping everything in there, including the payroll, gross pay and the employees portion. If we compare that to what we have so far on the Excel sheet, we did this with two journal entries, one for the employees and one for the employer. Taxes added up to the 51 7 55 If we can see that 51 7 55 43 And so that should be 51 7 55 40 fours off by some pennies. That's okay, So that's that's what makes this number up. If we double click on that, then we're gonna get that detail. And again, it just looks like an overwhelming amount of data and it kind of is. But if we break this down, we can think. Okay, what is it actually doing here? This is just one payroll period. This is November, because we have the dates on November 3 to someone. And imagine if you see the entire year here. If I change the date No. One, no 1 to 1. And someone looked at this report and trying to figure out what what's happening with payroll, it is just completely overwhelmed. The most likely if you have, if you know it's just too much data. But if you break it out period by period, if we change this back to 11 what? We can even keep the whole thing here and just look at the last period if we scroll down to the to the last period of data that we have. Um, we could say that this happened in November. So here's November. All the stuff that happened in November. Anthony, Anthony, Anthony, Anthony. All the same employees. Why is that? Why do they have a hunt? All this other stuff for one employee. Jill, Jill, Jill, Jill, Jill, Judy, Judy, Judy, Judy, Judy and then Cindy. Let's take a look at Cindy if we double click on Cindy's information and go here paycheck. The growth pay Cindy got was 458 and 42. So if it closes back out, there's the 4508 and the 42. So they broke that out and it's two components, the regular paying the overtime. And then if we if we go down here, what are these amounts and why are these zeros here? Well, it's to 82 the 65 with double click on that. Find that and we might go here and say, Well, there it is A to 82 65. Where's the federal withholding, though it's not their wise in that there. That's because these two don't really represent it, because that's included in the gross pay in these numbers. On the income statement, those two numbers are really representing the employee portion, the payroll tax portion that QuickBooks is just grouping together in one number. So again, just be aware of that. You know that takes a while and mull over what is actually happening there. So we'll close that back out. So just if you analyze one employee at a time. You can kind of see what QuickBooks is doing to generate this report. How its use in the docks, the forms, the payroll form check in order to generate this information and think about wise QuickBooks organizing it in the way QuickBooks is organizing it. So we'll close that out, and that's gonna be our profit loss. And of course, we only have the one line Adam on the profit and loss, because all we're doing is concentrating on payroll, and QuickBooks is breaking or entering the payroll all in the one line item. And just remember that we may have to break that out in some way, at least between the the growth pay the employees paid, the amount that's gonna be on the W twos in the W three and the payroll taxes the amount that's not on the W two and w three. If we want to tie those things out at the end of the year, which we will, we're gonna have to basically be able to piece this thing out and see how that will work, because this is including both of them 137. 575 Pay Payroll Liabilities After October Payroll: in this presentation, we will pay the payroll liability within QuickBooks after the October payroll. Within our payroll problem. Here we are in the home page. We currently have the open windows open. You can open the open windows by selecting they've you drop down and selecting the open windows list. We're gonna take a look at the reports that so far we're gonna go to the reports, drop down and go to the company Financial. We're focusing in here on the balance sheet, so we're gonna go to the balance sheet, and then we'll inter peril and see how the balance sheet is affected and changes. We're gonna go to the customized reports up top changing that date range from a one a 1 to 1 to 12. 31 to 1. That being january 1st, 2021 to December 30 1st period we are working on and OK, all right. So we have the checks here. We've got the liabilities here. Didn't mean to yell at you if I said all right. A little bit loud there. But we're back here. We're in the liabilities. I've changed the font size to 11. So we're going to go in here and enter the payroll data for the liabilities that we will then pay, which will reduce the checking account even further. And we're gonna pay off these liabilities. We could do this with a paycheck, but we're gonna do this with and we are gonna do with a paycheck. But we're not just going to go to a check or entered directly into the register. We're gonna use QuickBooks little system in order to figure out what will be paid, and then QuickBooks will then generate the paychecks for us. So we're gonna go to the home page, do This is a couple different ways you can do this. This is the way I prefer. You can also go to the employees up here and go to pay the liabilities, pay payroll liabilities there. I like to go to the employee center and use our little chart here. That said, I paid the employees and now I'm gonna pay the liabilities for that. What we withheld from the employees and for our portion of the payroll payable. So we're gonna say this item pay liabilities. Then we just got to make sure that we get that checked it in there all the dates in their correctly. So remember, this is the date that we wrote the check, not the pay period date. And that's what usually the liability will be based off of its on more of a cash basis. So the iris or the government, that Treasury is gonna be saying, Hey, you owe was money certain time, period after the point in time that you paid us because that's gonna be easier than different rules based on if it's bi weekly, weekly and whatnot. So we're gonna do monthly here. So we had the month that we ran for October, but we made the check in November, so we only really need one date. In other words, after all that one day that all we need 11 01 to 1. That's the date we wrote the check. Now remember, if you had to pay periods that you're trying to cover, then you might need to cover a different date range. That's why we've got to date ranges in general. But most of time, even if you're not monthly, if it's bi weekly or what not, you will have basically one date that you wrote all the checks on Unless you're paying people like daily or something like that. So we're gonna say OK, and there is our information. So we're not gonna print the checks were gonna handwrite it. We're going to review the checks. We got the checking account. That's where we want the checks to come from. We're gonna change check date in our example. Problem which in practice would probably be the current date. That's what would be the default. But for our practice problem, we're going to say that the date is gonna be on the 15th So we're gonna say 11 15 to one. So let's review our dates again. We're going to say this payroll happened in October. We paid the payroll to the employees November 1st for the month of October. Then we incurred these liabilities, and we're gonna pay the liabilities now, the government for the money that we took for the employees and for our portion of it on the 15th of November. All right, so we're gonna go through here, we're gonna and it note that once we do that, it should just show us if we have a proper pay date here. This date. Give us the liabilities that we would expect for that time period. So it's nice if you have one day. And if it was wrong, then of course, our liabilities shouldn't populate. You'll probably have zeros here if it's a date prior. So that's country. We should be able to go down here and say, Okay, these numbers makes sense to us. So now we're gonna go unpaid and we're not gonna pay the the benefits like the 41 K We're gonna leave those as a liability so you can see the liabilities that will remain. And and we could see the payroll tax portion that were gonna pay. So we're going to leave the insurance. We're gonna go to a federal unemployment. We're gonna pay that now. There's nothing there. So we don't even have to check it off wise and during anything there because all of our employees hit the cap. We didn't We didn't have to pay any any unemployment this time. Not because we're not subject to unemployment anymore, but because there's that low capped to the unemployment's. There's nothing in the liability. I'll check it off anyway. So the federal withholding we gotta pay that Medicare company and the employees portion as well. And we don't need that one as well. A Social Security. So these are the items were gonna pay the check number then is going to be this 7 15,055 01 And that should, of course, match. Basically, are our journal entry in our excel worksheets? Oh, in our journal entry, we're paying a lot. We paid off the same item, which was FICA away. SD i h i Which we combine the fed, the two portions, the employee and employer for both of those. And then the f i t for that. 15 7 54 99 Rounding differences. Okay, so we're gonna go back over here and go ahead and check all over dates. This looks proper. Looks good. Okay, I'm satisfied. So we're gonna say, create those paychecks and there we have it. I'm going to say save and close. And then let's go back to what we could check the check register just to make sure that these checks were created. So it's going on the banking drop down and go to the register banking and then register and we'll see that these were Jack's. Hopefully and say OK, here's our registers that we just made these two checks. I'm sorry. We just made this check to the United States Treasury. Only one check, because I noticed all those taxes were paying right now are all to the Fed to the I rest to the treasury. So we have the one check that we're generating within the QuickBooks system for those items . Delai ability. Check here as we can't see Now we're gonna go back to the balance sheet and see what happened to it. So we're in the open windows, going to the balance sheet within them. We're going to say yes and refresh the screen is what we said yes to. And if we go to the checking account and double click on it, we could see this is all just payroll activity. Here's our payroll checks for the first month we ran and then we pay the e d. D. And we paid the Treasury and then we ran payroll again, and then we played the e d d. The state that was the first Suta state unemployment tax. And then we pay the treasury and then we ran peril again. And now we pay just the Treasury, not the state, because we had no e d d We had no suited No, that's the California employed development depart. So we don't have that this time because there is no suit that no state unemployment. Here's our check. If we double click on it, we'll see that check. Here's the detail of that checks of this of the other side. This is what came out of a checking account closing this back out note. Then again, the nice little These are all checks. So if I go into any of these, they're just checks. According to the bank, if we ask the bank, there just checks. But we call them paychecks, or QuickBooks does, and we call them liability checks. And that gives us that that differentiation really nice to have that so that we could see inside him. This is something that QuickBooks did for us in some way. We use some kind of function that QuickBooks sees as a differentiation than us just writing a check within the QuickBooks system. So if we closed this back out, then we go down to our liabilities and we see, there were only lets with a group insurance, retirement and the unions that through the three that we have not yet paid, remember that these aren't things we're gonna have to pay to, because we're gonna have to give them whoever Whoever we're paying for the insurance policy for the coverage, the retirement. We gotta put that into some type of investment. It shouldn't just be sitting in our checking account. Weight should be somewhere. We should have it. Ah, that's that's there and holding for those purposes. And then we've got the union dues. Well, obviously we have to pay the union dues as well to the union. So But this is just to give an example of these, these benefits that will accumulate and the taxes which are now going. Because, of course, we pay those liabilities All. If we compare that to our Excel sheet after we enter the journal entry, we're left with these liabilities again so we could see it in terms of a journal entry form . We can see it in terms of QuickBooks. How it kind of formats. This with the use of the check in the form. Same same concept. It's doing the same thing. Deputy credits, checks, forms. It's all the same stuff. Now let's go through and see this on the trial balance so we can kind of go into these accounts. So I'm gonna go to the reports, drop down. We're gonna go to accounting and taxes and trial balance changing the dates from a 10121 12 31 to 1. That's January 1st to December 31st 2021. Going to customize the reports? I'm just changing the font size. You may not need to do this on your reports, but will make a fine. Let's go 11. And there we go. Okay, so these are the items that we have here now they're all zero because we paid them off now . But let's see the detail of them. If we go into, say, the f i T federal income tax, we see once again that here's our first payroll. Here's as paying it off. Goes back down to zero. Here's the second payroll. Here's as paying off goes down zero. Here's the third payroll. Here's just paying it off. Going back down to zero. What is that amount? 393 8099 13. If I go into that check, that's not the amount of the check. That's the amount that got applied. Teoh this account federal withholding, taking it back down to zero, this liability account going back down to zero. So if we close this back out, close this back out, we'll see the same for any of these. If you go to the h I, which is the hospital insurance of a name for Medicare. We have 22 items here again because there's an employer and employee portion. And then they broke out the liability with two portions. But then it goes back down to zero and then the second month, and then it goes back down to zero and then the third month, and now it goes back down to zero two payments to the treasury. Those aren't two separate checks. We can see the same check number here. It's a liability check If we go into them, though, and say What? What is that? Well, those are these two items we took the Medicare employee and employer portion. That was oh, to them breaking them out in that format. So if we close this back out. So you want to go back and forth a little bit and just check out this detail? What? What is QuickBooks doing? Why is it formatting the way it's doing? How is it using the form to do that? And how can we can compare that to what I would think of in terms of just journal entries? What's happening in terms of the account balances in total, in essence, is what we're thinking about when we think about just the journal entry format of it. 138. 580 Process Payroll November: in this presentation, we will process paid role for the month of November within QuickBooks and we are on the home page. We have the open windows open. You could hope in the open windows go into the view, drop down and open windows list when, How jumping forward in time Once again another month has passed. We're gonna pay the payroll in our payroll problem. That being for the month, this time of November down here in the employees section, we're going to select the pay employees once again and go through the payroll process for the next month, the month of November, we're gonna make sure that the dates look proper. We're going to say that the date of the period end is 11. 30. That's the end of the month. This typically will populate for us. But be very careful there, because if it doesn't, if it has the wrong pay pier head, then you're gonna want to go back in there and adjusted and make sure it's proper, because otherwise the payroll is gonna be difficult to adjust its adjust its hard to adjust payroll more so than other types of areas, so make sure the check date or the period end is correct. We're going to say that the period end is 11. 30 and then we're gonna pay it on 12 1 as our system has done thus far painted on the next day, payroll ends. As of the end of the month, we're gonna pay it on the following day. That typically would be the current day that we're entering this information. But of course, in the example problem. We will be putting it on the next day here in the year 2021. The time period we are working on. We're not gonna be printing the checks Were gonna be a hand writing the checks. The check numbers should be okay and ready to go. Now, we're gonna go ahead and select all of our employees and enter this data as we have seen in prior payroll. And the payroll should become easier and easier as we interest part of the process being routine. Although we do want to be careful of it, because when there are problems, they don't typically show up until the end of the year or into the quarter when we start to sum up this data. So we're gonna go into aunt anymore. We're gonna keep the date of the same. And if the data is the same from period to period, then it should populate for us here. So we have the prior period hours 1 63 The overtime. The three hours that gives us the gross pay and the overtime pay the 401 K and the insurance should populate on them cells as well as the union you need to enter in the 81 87 for federal income taxes the 2 59.634 Social Security and Medicare 60 72. Then on the employer side, we're gonna be matching the 2 59 63 4th e, Social Security and the 60 72 Medicare. No Fouda, No suit, No federal unemployment, no state unemployment. Why? Because all of our employees have hit those low caps already at this point. So that is gonna be it. Net check 2050 to 35. Make sure that checks out and will go on to the next employees by selecting Save. And next that being jailed Jackson Jill Jackson has the same amount of hours at the 140 no overtime, and that gives us the 3 4040 0 t for that gross pay, the for a one K and the health insurance will populate on themselves within need to enter the federal withholdings for 74 The Social Security 269.8 and the Medicare 62.93 That gives us a net check our check number of 1988 and 60 five sense. Don't forget the employer portion of Social Security to 69 08 matching the same amount over here and the Medicare 62.93 That's gonna be it for jail. Jackson moving on to the next save and next mix employees Judy Jones, Judy Jones being the heart and soul of this organization, and the founder and owner is having the 35,000. She's the salaried employees here that will calculate every time. Then, as the salary we have the salary up top. We got the 401 k in the health insurance ship, which should pull over automatically. We're gonna then enter the federal with holdings at 7508.13 Social Security. Add 1450.80 Medicare at 507.50 and then we'll get the net. Check our check figure at 22 to 83 57. Then we're gonna go over here to the employer portion, where we have matched the Social Security at 1450.80 and the Medicare 507.50 going on to our final employees by selecting Save. And next we see Cindy Lewis, Cindy Lewis has 161 hours and one hour of overtime that will calculate the gross pay and the overtime pay the 401 K and the health insurance would populate for us as well as the union dues were gonna be entering in the federal with holdings at 230 Social Security at two. A 2.10 Medicare at 65.98 That gives it the net. Check our check figure at 2104.85 Then we're gonna go and into the Social Security for the employer portion at two a 2.10 and the Medicare at 65.98 That should do it. That should finish us up. Then we will go to the save and close. Save Enclosed will double check our dates. End of November, pay period. We're paying a 12 1 the first day of the next period and everything looks check numbers. Looks like it lines up. All employees are lined up. Everything looks good. We're gonna go ahead and say Continue. And then we will create the paychecks. Paychecks being created. They'll give you some nice little beeps there. If you have the sound on, we're gonna take a look at the pay stubs. This is what we would have to provide to the employees in some fashion, either with the paycheck or in some other fashion. We're gonna preview the pay stubs, and once again, you've probably seen this in some format in the payroll. We're going to need the current year to date data. What we've earned what they took from us. Not because they get to keep it as the employer, but they have to pay it to most of it being the government. And then the nets check and the same information from year today. We need to provide this to the employees in some fashion. Typically, we're gonna close this back out, then close this back out. Close this out, check it out in our check register and just make sure that those checks have been populated that are check numbers line up to what we think they should. So we're gonna go to the banking tab and go to the EU's register. We're going to say we are in the checking account. That's the one we want. And we have Anthony, Jill, Judy and Cindy on the dates of 12 1 When we process the payroll, we see the paycheck icon here. Everything looks proper. We'd want to double check that. Those check numbers line up to what we believe they should line up to. 139. 585 Review Payroll Reports After November Payroll: in this presentation, we will review payroll reports after the processing of payroll for the month of November. Within QuickBooks, here we are in the home page. We have the open windows open. You can open the open windows by going to the view, drop down and open windows list. We're gonna run the payroll reports here, starting with exporting the Excel reports to payroll, going to the reports, drop down, selecting the payroll payroll, employee payroll and then summarized data in Excel. We're gonna select that item, it will export two Excel, and we can see the summarized data so far changing the date range for that data from a 101 to 1 12 31 to 1. That's gonna be the year that we will be working on within our project. January through December 2000 and 21. We're gonna get QuickBooks data now by selecting this item here we have our employees journal by check. They call it that's gonna be similar to our for goto our excel sheet, the earnings of record, and that's going to give us the data now and we could see it's becoming more and more familiar. Weaken start to recognize this. We've got our employees over here listed. Then we've got the pay period listed out. And then we have the compensation and what was taken out of it by first employees and then pay period within each employee. If we go to the end of this process, then we will get to our net, check our net check by paid by employees first, and then buy pay, period. And if we some those up, we get the total year to date net check information which we typically need for the paste of information and what not? So if we compare this into what we have on our system once again, we're just gonna say OK, if we're taking a look at Excel, this is aunt anymore. The best place to look is typically going to be for the net check amount. And but And by the way, I'm freezing the pains so that we can see this side stays the same. But in essence, I'm getting Anthony Mortar Net shack years over net checks. And then we're at the 810802 for the total. So the 810802 for Anthony should be this one here. And we can check the individual checks as well. The 1950 then the 2052 for the rest of them. So that 1950 to 2052. If we go down to Cindy Lewis, we can check the total checks for all four checks. Net checks that would have written. And we can check again all these numbers here and verify them all out. But the net check if we only have to check a few numbers for when I have Ah, smaller number. Amount of numbers would be the net check. And now I forgot which one we're on. So a 312 So we're going to say that we have the 8312 here and then we'll go back to our Excel. Next item for Jill Jackson. We've got the 8714 So back here T the QuickBooks report 8714 And then if we go to the next item, we're going to say that this is for Judy Jones, 86 9 76 and we've got the 86 9 76 You can see how QuickBooks is breaking this information out. This being the most detailed, you give this to someone, they probably are a bit overwhelmed with it. So QuickBooks gives some summary reports, which is going to give similar date. But the summer report will reduce it down a bit by quarter now. So that's a bit easier to look at now Who would not like it at every paycheck within each employee section here but by quarter, which is often how we want to see it on the quarterly reports. So this is another format that we can see this information in. And so he got the year to date. This is gonna be more like the pay stub, information similares type of layout. However, the hours, the rates, the state and then ah, the deferred compensation and then quarterly information here. Very nice. Broken everything out by quarter. And that's going to give us both the employee portion. And this report has the employer portion as well, which is gonna be nice things like the suit attacks the food two attacks in the employee and employer portion of self security and Medicare, so and know how important that is because note that you can figure out the employer portion of Social Security and Medicare by just looking at the employee side cause it's basically matched. In most cases, however, the food A and the Suta smaller amounts typically but still could be relevant are not often in some of the payroll formatted data. When we're just looking at employees side information. In other words, the paycheck stubs don't give us that detail, and we can't derive it from that detail. We need more information. So if we go back to Quickbooks here, then we can see that the main report QuickBooks, will be running. If we go to QuickBooks reports, most people will run the employee payroll and take a look at the payroll summary, which is a great report here. And we're going to say, that's gonna be as of 0101 to 1 and 12 31 to 1. That's gonna break this information in a similar format as the register. But in kind of a vertical layout where we have the employees up top, we've got it like we would see it on a paycheck, step with the growth, pay, what was taken out of the growth pay and the net pay. So that's going to give our information and note. Of course again, it's it's summarized, so it's giving it from a year to date perspective. So for the you know, this is where we at at this point in time. But from that perspective at where we are at the full point, this is a nice report to see and it gets us the total. It also gives us the employees, er data. So this this won't give us what we need. If we want to see quarterly numbers, we could run these for the quarter for the 1st 3 months. 2nd 3 months, 3rd 3 months, and so on and so forth. These then will be the primary formats that we can show thes data's in the report format. 140. 590 Review Financial Statements After November Payroll: in this presentation, we will review financial statements after entering the payroll for November into our QuickBooks payroll problem. Here we are in the home page. We currently have the open windows open. You can open the open windows by going to the view drop down and selecting the open window list. We're not going to go to our financial statements, which, as at the reports dropped down, up top company and financial first taking a look at that balance sheet. Standard report balance sheet standard changing the date range up top from the customized reports 20101212 12 31 to 1. That's January 1st, 2021 to December 31st. While we're here, we're going to change the fonts as well. So fonts and numbers. And let's just make the font a little bit larger here. You may not need to do this, but I'll do this here, okay? And yes and OK, okay. So here we have it. We have our information on the financials. If we take a look at the checking account, first double clicking on the checking account. All we have are the checks that have going out. We've got the first payroll that happened. We paid the E d D. And then we pay the United State Treasury for what we withheld and our portion, then the second payroll for employees. And then we pay D, d, d and the Treasury for what we with help from payroll taxes. And now we're on the fourth payroll that for November and we've entered that information actually were hunted. Semper Czar November. We entered that in, and then we paid the United States Treasury, not e d. D. Because we didn't have any more suit attacks. Now we're in the payroll that we paid in December, and actually the month was run in November. So remember that it's we're paying at the day after. So these air the payroll periods August that we paid in September September that we paid in October October that we paid in November and November pay period which we which we are processing in December. So these are the paychecks that we wrote in December. What's going to come out of the checking account is the net check. So if we checked any at one of these, let's go from the bottom this time Cindy Lewis to 104 Double clicking that. What is that? Well, if we go to the paycheck stub, that's the net check, not the gross check. This is the net check. That, of course, is what we're paying after. As we process payroll, close that out from the checking account. Remember, in the terms of a journal entry format, if we see it as it one fold journal entry, we've got the check. This is if we add them all up to these would be the net checks that we paid out. This is the gross check that differences everything we took from it. So if we added all these these checks up, if we add these four checks will come out to that net check total that we put in total 28 4 29 with some rounding differences. Okay, so let's close this back out. So I'm gonna close this back out than the other items we have is, of course, what we withheld in terms of the liabilities. So we over this now because we took it from the employees and or we owe it for our portion of the payroll taxes that includes F I t. Federal income tax. Not not our income tax as the employer, but what we took from the employees for their taxes. And we see that this familiar thing we should see what the payables here's. Therefore employees for the first pay period hears us incurring liabilities for the payroll that we over for them that we took from them, that we have to pay to the Treasury, the iris for them. Then we paid it going back down to zero. Here it is accumulating again in the second payroll. Then we paid it third payroll. Then we paid it forth payroll the ended in November that we processed in December 1st, we have not yet paid it, and this is what remains Then. If we check out for any of these, let's take a look at Judy Jones. It's time for this is for F I t. For the 7508 Where is that number here? Well, if we look at the detail, but we're going to say that 7508 then is the federal withholding. So that's the federal withhold. If it closes back out and close this back out that's how they're summarizing this detail. And again in our journal entry, Of course, we group them all together in one journal entry. And so if we add up all the federal with holdings, that should adult to this. 8399 Okay, so let's see what else we have here closing this back out. We've got the same for for the Medicare and the and the OSD. I saw Security and Medicare. If we double click either of these, then we're going to see the same information. Except it looks larger because we have the employee and employer portion and they're showing both of those broken out separately. But we still have the accumulation of the payroll liability than us paying it, then the accumulation of the payroll for the second time period, then paying it and then the accumulation for the third, paying it back down to zero. And in the fourth, which have not yet been paid. And if we go off now, what will go to jail up here? Jill Jones chilled Jackson. If we double click on Jill, then we see that that amount that we're showing was that 62 for Medicare. That's what's making up this amount here? That's what QuickBooks is using the detail that they're giving for this amount. Of course, in our representation, we had all the checks together. So if we added up all of the Medicare, it would be this 6 97 12 So then we'll close this back out, and then we can go. Its same for the O A S t I as well. By the way, I want to go back into this. H I one more time. Note that this is the employee and employer portion. So if we if we were to compare that to our journal entry, it would be the employee portion would be this. The employer portion would be this. So under two journal entries. So if we add those two up in our journal entry format, that's the 13 94. So if you add up the employee and like, if you had of just one of these duplicated numbers on each of them, it would add up to the employee or employer portion. If you add all of them up, then of course it's gonna be the employee and employer portion. Okay, so we're gonna close this back out. So that's going to be what we owe. That's comes out. Teoh 45 4 77 45 If we compare that to our Excel before we pay off the liability, then these are liabilities here that were shown in journal entry format 47 4 77 So that's gonna be our information. So it's worth kind of comparing and contrasting, like journal entries or everything as a whole compared to how QuickBooks breaks it out here . Then let's take a look at the profit and loss by Garnett Reports up top company and financial. And then the profit and loss running this at a 101212 12 31 to 1. Well, vincey are full time period. The 208 If we were to compare that to our shit here, we broke it out. Remember, between the employer, between the payroll taxes and the liabilities, so we broke out the liabilities in an Excel and QuickBooks. They're gonna combine those items. So if we highlight these dio 208883 so and note that there's pros and cons to group it all in one area. What we're gonna do now is double click on this item. And if we scroll back down to the bottom, we'll see all this detail that it's just overwhelming now. But if we think about it, it's not that bad a ceased in terms of understanding how it's being put together. For example, if we look at Jill Jackson, we've got all these line items. But really they're just including growth pay, plus the employees, I mean the employer portion. So this amount, remember, is the gross pay, not the net pay here for +340 This isn't what we paid Jill. This is what Jill earned. So if we double click on it and we got a paycheck, that's this amount that was earned. So we report that because Jill still gets these the other amounts. We just didn't give it to Jill. We gave it to other people on Jill's behalf because she really wanted us to pay the government because that's a responsibility. Do that. So we but anyone's that's her payment that we paid, and then this. I'm out here to 69 the 62. If we look at those those aren't these amounts there these amounts. In other words, they're not the employee portion of self security and Medicare there, the employer portion. So we're really including. There's really just two things that are happening here. We're including the growth pay for all employees, plus the employer stuff, which is these items. And in our journal entry, we broke that out into two separate journal entries. This is the employee journal entry, and then the employer stuff that's happening here. So if we close this back out and close this back out and then if we change the dates to just the current date period that we are in which we pay this on 12 01 to 1, then we could see just one payroll period worth of data here for that we that we have. We processed it on December 1st, and we could see just a total of 51 36 for this time period. So if we go here Ah, that's gonna be these two journal entries and and Sofia, add those, huh? We're going to get the 51 36 in journal entry format in our in our example here. So those are gonna be the major reports of what closes back out. Of course, the profit and loss looks like there's not much going on there. There isn't. We're just process the payroll just so we could format and look at just payroll. Clearly, we would have income and other expenses related here in addition to the payroll. But it's nice to be able just zoom in looking on the payroll items of the profit and loss. 141. 595 Pay Payroll Liabilities After November Payroll: in this presentation, we will process the payment of the payroll liabilities within QuickBooks after the payroll pay period of November with an hour. Paywall problem. Here we are on the home page. We have the open windows open toe, open the open windows we go. The view dropped down and the open windows list. We're now going to go into our report the balance sheet report to see where we are at before we process the payroll liabilities and pay them reports. Drop down, up top company and financial. We're gonna scroll on down to the balance sheet standard change those dates from Let's go. They customized reports to do so. Changing the dates from a 101 21 Teoh. Let's make it 12 31 to one. That's January 1st, 2021 to December 31st the year that we will be working on while we're here. I'm gonna change the fonts as well. You may not need to you, but I will do so here. Font size. Let's go ahead and make it 11 this time and say OK, Yes. And OK, here we have our information. You'll recall that we have these liabilities lined up here. Those are the things we're gonna pay. We're gonna pay. Just the tax liabilities were going to leave the liabilities for the insurance and benefits so we can see how each will react. We're gonna use the payroll processing format to do that rather than just opening up a check and writing it. We'll do that from going to the home page and the open windows over here. This is only one way you can do this. You can also do it by going to employees and go to the pay, taxes and liabilities. I like doing it this way because I like the little picture that tells me that I paid the payroll here and now we're paying the liabilities there. So we're gonna go to the pay liabilities there. Make sure that we have the dates proper here. We're not taking the date range. We're not taking the range of win the month in our case of November that we process Pedro. But the day that we made the check, the day will be 12 01121 So 12 01 to 1. Now there's a date range because it is possible that we wrote checks, payroll checks, multiple days, but typically will have one day that we wrote the checks. So we process the papal. We now wrote the check. So 12 121 OK, now let's review this again. Let's check our dates. We've got the review. The the liability checks were going to say, That's okay. We're gonna actually write checks through this process Now, we ended the payroll process in November. We pay payroll every month. The payroll period was November 1st through November 30th. We wrote the check on December the following day, and that's the paper we have here. That's what counts for the liability, because that's usually when the government determines when we have to pay off the liability and then we're gonna write the check on whatever date it currently would be. Typically, we're going to say here that we're gonna pay that pay off the payroll liabilities off in the middle of the month, which is gonna be 12 15 21 So, in other words, payroll process November, we wrote the paychecks on 12 1 December first, and then we're gonna pay off the liabilities related to payroll to the I rest to the government of treasurer to the Fed on 12. 15. So if we go through, I'm gonna check off just the ones. Not the benefits, but just the taxes. So not the insurance. Not that, Not that union dues. We haven't paid the union for a while. We better probably gonna have to do that soon. We're going to get in trouble. But any case, we're gonna go to the federal with holdings here. So federal with holdings F I t. For the input for the payroll taxes, these air employees with holdings, Medicare employer and Employee E. And then the Social Security employer and employee that will come out to 14 3 16 61 if we compare that to our journal entry. In essence, we have the journal entry here and 14 3 16 59 So it's rounding air rounding difference, but and we group together in our example of the the employer employee portion of Social Security and Medicare, because that's how it's showing on the financial statements in our payables, the way we set that up. Okay, so that is that It looks OK. We'll just double check everything coming out of a checking account that looks right. Pay date. Hey, that's when we wrote the paychecks. Looks good. So let's create this information. There's our check. So here's the check him out. Here's all the accounts that are gonna be affected by it or the payroll items that are going to drive the accounts that will be affected by it. So we're gonna say, OK, that's good. Let's save and close this. Go back to our balance sheet and see what happened. So if we go back to our balance and I'm gonna say, Yeah, it's refresh checking account double clicking on the checking account. This is all information in the checking account now related to payroll because that's all we're processing. We had the payroll for August here, and then this is prior payrolls. And then we paid the state the E d. D. Just for Suta State unemployment. Then we paid the Treasury the Fed. Then we ran payroll again for September that we actually wrote the check in October 1st and then we paid the state paid the treasury and then October, which we paid in November, the paychecks. Then we paid the Czechs Teoh, the state Treasury and now we are in November, which we processed in December. So here's our four paychecks. And now we just wrote another check for the United States Treasury for the With holdings that we took from the employees and those payroll taxes for the employer as well. So here's our check that was generated. You can also find that check on the check register. If we go into banking up top and use register, we'll also see. And we're gonna say it's the checking account. That's the one we want. Here's the check that was generated. Noticing it reports it as a liability check. It's just check to the bank. Thanks. Just gonna see a check. But we're gonna call it a liability check in QuickBooks helping us to know that QuickBooks helped us to make that checks that we did the QuickBooks liability check process to get there. Closing this back out. Closing this back out. We now see that all the liabilities have disappeared related to payroll taxes. They're gone. Only the ones related. Teoh. The benefits are still remaining. And that's of course, because we paid them so we could see them on the trial balance by going to this where I would typically go to see the accounts and be able to kind of drill down on the detail. Zoom, auto, zoom or zoom in, as they call it, as we would on the balance sheet. So I would go to the accounting and taxes and the trial balance. Changing the date range from once again over 101212 12 31 to 1. Here's our information. I'll make the font of date larger once again going to the 11. Let's make it so that we have that. And so then these items are now gone. What happened? Well, if we go into the f i t, we're going to see that this is the normal thing. That happens. We had we had a zero, we had the first payroll and then we paid it off. And then it went up with the next four paychecks, and then we paid it off. Next, four paychecks paid it off. Need. This is where we are now. We just ran this payroll and then we paid off the pay reliability. So we ran the payroll Ah, for the month of November, in December 1st and then paid off the liability that we withheld in this case, the F I t. With this paycheck. That's not the Check him out. If I double click on it, that's gonna be the amount that is applied to the F I t Federal income tax A 399 If it closed that back out clothes that back out, that's that item. Eso Security be the same Medicare. So we'll goto Fico This is Social Security, Same concept that looks longer But we have the same idea. It starts zero out after every tape a period First pay period zeros out cause we paid it and Kurt Debt paid it just like every payable account, just like in accounts payable. It went up and then we paid it. It went up and then we paid it. If that doesn't happen, if you don't see a routine like that Ah, my something I have It might have a problem somewhere. Probably an issue. It should look something like that. And now we have the same thing here. The only difference years. Now we have two for each employee. Why? Because there's an employer and employee portion for fight. Get taxes, Social Security taxes for going to any one of their These That's the 2 to 161 for the Treasury. And that's the 2 to 61 that they broke out news. They're not breaking it out by account, as we would in the Expenses tab. They're breaking it out by item. And the item is what's telling us where it's being driven to remember that the items of the driving factor is kind of like an invoice. So if we if we close, is back out on invoice where you choose inventory items in the items are the ones that tell it which account will be be hit by the creation off the invoice. Same thing here these items are telling QuickBooks which accounts were gonna be selected. In other words, if I go to the lists up top and we got apparel items and we find these payroll items, this is I'd have to go in here and say, Well, what are you doing with that payroll items which liability or a counter you hitting when we set that up? It then chooses the liability account that will be selected there. So we're not listing closing this back out. These aren't actual accounts. Closing this back out, closing this back out. So there's our information here. That's gonna be our trial balance. And we're back down to the zeros in the liabilities. If we go to our our data in Excel, we're only left with the benefits the group insurance union and retirement. That adds up to 33 1 61 If we go back to our balance sheet in the open windows balance sheet, open window 33 1 61 about is our current liability. So it looks like we're all in alignment here. 142. 600 Process Payroll December: in this presentation, we will enter the payroll for the month of December, the last month of our payroll problem within QuickBooks, Here we are on the home page. We currently have the open windows opened. You could open the open windows by go into the view, dropped down and selecting the open windows list. We're not gonna be running payroll for the last month of operations for our payroll period for the year. We're gonna go do that by going to the employees section down here and pay employees one last time. As this opens up, we're going to check the dates. Now, we're gonna kind of cheat a little bit on the dates here, and I'll show you why what we're doing. But they were going to say the pay period ends this time at the end of the year because its monthly So that's that's the same 12 31 to 1 December 31st 2021. We are going to make the check date, however, on the same day, this time 12 31 to 1. And in essence, what we want to do here is just put all the payroll periods into this pay period. In other words, if we write the check as of January, then the reports that we will run will be more on a cash basis. And there is that timing difference. And that's why we need adjusting entries basically with payroll. In order to line this up. Teoh our example. Problem in excel however we want to make we want to put this payroll peered into this current period so we can line that up will show an example of this timing difference in another example problem. So this is note once again, this is deviating from the norm a bit and that we're writing the check at the same point in time. And this is something we may do in practice, by the way as well we might say, Hey, I would like to make things easy right now. We're gonna do our best to process the payroll in the same year so that we don't have that time indifference that we have to deal with, So that could be something done in practice. Just be aware of it. However, if we'd run it in January that next year we're gonna have some differentiation between the reports for payroll more on a cash basis when the check was done and the accrual basis for when the time period was run. So let's go through this. We're gonna go ahead and say everything else looks proper. We're gonna check off all of our employees once again and go through here and into the same data we have in the past. So we're gonna go to Anthony More here. We're gonna have the same amount of hours at 1 63 free over time. That will give us the gross pay, the health insurance to union dues and the 401 k should populate on their own. We're gonna have to type in there. The federal withholding, which we're gonna say is 187 Social Security, 259.63 and Medicare 60.72 We'll also have the employer side of the Social Security 259.63 once again and Medicare 60 0.7 to Arnett. Check is gonna be 2052.35 That's our check number. And so make sure that that lines up and then we will move forward to the next employees by selecting Save and next next employees gonna be Jill Jackson. Jill Jackson worked for the month of December 140 hours. That'll give us our gross pay up. Top 341 K insurance and the federal with holdings should line up. Actually the federal with holdings. We will then enter at 474 Social Security 269.8 Medicare 62.93 That gives us our net check of 1988.65 That's our check number. And then we're gonna have the sole security at 269.8 for the employer portion and Medicare include or 62.3993 Once we have those lined up, we'll go ahead and go to the next employees by saying Save and next next employee, Judy Jones. Judy Jones is our owner. Are were salaried employees at 35,000 which will be populated automatically. The 41 K insurance and whatnot is calculated for us. The federal withholding will be 7508.13 No Social Security. And this is important. This is why we have the Judy Jones here with a larger salary to show that cap. And that's going to make a huge difference once that cap is hit. So just note, there no Social Security being taken out of this check. Given the fact that the cap has been hit the Medicare, however, we still have the 507.5, and then on the employer side, we've got the 507.5 matching on the Medicare. Nothing for anything else here. No Social Security and note. All of our employees, of course, have already hit the food A in pseudo federal unemployment and state unemployment, and therefore, there are no employer taxes related to them. Make sure to check off our check number here at the net check of 23 7 34.37 and will move on to the final employee to enter the data. Four. That being Cindy Lewis, Cindy Lewis will have the same amount of hours as the prior pay period of 1 61 and one hour of overtime. That'll give us our grows pay are four. When cave A health insurance and hold it and the dues that union dues, we're gonna enter down here. The federal withholdings, that being 230.0 Social Security to A 2.10 and Medicare 65.98 That gives us a net check. Our check figure of 2104.85 The Social Security and Medicare for the employer portion the same to A 2.10 and 65.9 eight. Once done, we're gonna say save and close. That's our final employees. Double check the dates here. And we know that were are were Russian this time to put the payroll into this pay period so that we have it included and don't have the timing difference. So we've kind of rushed things on this year in payroll to make sure it gets out before the end of the year here. And we have done so. So we're gonna say continue and then we're going to say create paychecks so created the paychecks. Paychecks have been created. We'll check the pay stubs. Remember, we're gonna preview that the page does. It will have to be given to the employees in some way, either as a paste of or in format of a report to show our digital copier in some format. Here's the current pay pay payroll with the gross pay and what was taken from it and the Net pay. And in the year to date, information typically is what needs to be given to employees on a paycheck by paycheck bases. So we'll close this back out. We're gonna close this back out, gonna close this back out. We're gonna check to make sure that the Czechs have indeed been written indie check register by going to the banking. Drop down, use register. Then we're gonna go to the checking account and just check thes checks. Are there? There's Anthony. There's jail there. Judy. There's Cindy. Those were four paychecks. Would there indicated by page exterior. If we wanted to see the detail on any of those weaken DoubleClick just on that paycheck item or paycheck text 143. 610 Review Payroll Reports After December Payroll: in this presentation, we will review payroll reports after entering the last payroll for the month of December in our papal problem within QuickBooks, Here we are on the home page. We currently have the open windows open. You can open the open windows, going to the view, drop down and open windows list. We're gonna go through the payroll reports by go into the drop downs up top and then go into the employees and payroll. And let's take a look at the Excel payroll data first, and this will open up Excel. We're gonna change the dates within the Excel worksheet here. Those being a 101212 12 31 to 1 January 1st 2021 to December 31st 2021. And then we're gonna get QuickBooks data here on the first half of our reports. We have the employees journal by check, and that's gonna be similar. I'm gonna pull in our excel sheet if we worked it ourselves similar to our earnings records . So if we go back over here, remember that this data now is not just by papered, but first by employees and then by the paper by the checks within each employee's checks. Note that we're getting a lot of information now, and this is just four employees, and we're running it monthly as opposed to, say Weekly, where we'd have a lot more information so it can be a bit overwhelming. Also note that this last pay period, the 12 31 looks a little bit different than the prior pay period because the check date, I should say, because the check date here, we forced it to be in the end of the year. We didn't write it the next day so that we would include this data in this paper. If we had written the check in the next day in January of the next year, then the information wouldn't show on this data it being more on a cash basis. So just be aware of that. That difference. And that would mean that we would need to be in adjusting entry. In other words, this report is not based on the pay period over here. It's based on. Should it be included in this report based on when the check was written, and so I will demonstrate that more another example problem. But here we want we want to put this data in there. So we have a little bit more data in our full example problem here. Then we're gonna have our information. It's laid out in a horizontal type fashion. We've got the gross check and then we end up with a net check at the end here, taken out all the with holdings. And that's gonna be similar, of course, to our earnings records. If we go through and just double check everything, that's number to double check with is typically the last number here in the total. So here's each check total. And here's the Indian total for our first employees and anymore, Anthony has total for the year 1 10,060 If we go back to the prior report, we could see 10,000 won 60 for Anthony here. This pivot tables, but 10,000 won 60. And then, if we go back, Teoh our reports and go to our second employee, Cindy Lewis, 10,004 16. That should tie out somewhere. 10,004 16 to Cindy Lewis Up top. We go back over, we're gonna say, Okay, next one, we're gonna say is Jill Jackson, 10,007 02 And so there's 10,007 02 net checks. All the net checks added up. And finally we go back to our big earner, Judy Jones, 110 7 11 And that's gonna be the 110 7 11 So you can see this ties out. And just note that this is going to be not near as much data as we could see in payroll, because we only have four employees and we pay monthly as opposed to, say Weekly, in which case this report would be much longer. So this report can be very intimidating looking. Also note that we started this in the middle of the year. If we had started us in January, then it would be even longer still, so this could be a very intimidating report. But as we build it in this format, we could see how each component works and therefore concentrate on each component. When we look at all this data and it doesn't, it's not as confusing when we're able to do that. So here's our employees journal. If we want to break that in terms of the year to date summary. It will give us the quarter year to date. This is gonna be a bit easier. Way to look at it. And just note that when we have it's just a matter of data. Just a lot of data that we have. Now that we're at the end of the year. How are we gonna break this out? Well, the reports break them out quarterly. That's what we're gonna use to make our financial statements break them out quarterly. And so we'll break them out in that format as well. We'll break amount by cheque. There's just a lot of different ways that we can sort this data in formats that we can more easily take it in. Devil, check it, understand it. And that's what these reports are or innocents doing notice. They're all pivot tables with the same data. They're just sort of this data in different ways to make it more relevant to whatever use we need. So then we have the year to date information here more on the vertical fashion, like we might see in a pay stub type information, same type of data hours, uh, rates. And then the deferred compensation and the quarterly once again, the quarterly be nice, because this should help us in line up to what we're going to see on our 9 40 ones and need them for that. Also, it's giving us our are employed, er er information here as well, which we don't always see it, remember, that's you know we have and we're gonna need that at some point, that kind of tie out all the information. So that's gonna be these reports. If we go back to QuickBooks, the other main report will, of course, be under reports. We're gonna go to the employees and payroll and take a look at the payroll summary report changing that dates from a 101212 12 31 to 1. That's January 1st of December 31st once again and this note that this has given us that summary data again. The reason this is a nice report to look at is because it summarised it's not giving us the detail by check, but it's and hey, this is where Anthony is as of the this entire paper this entire year. This would be like it's total check if he was all just one. Jackie got this much. And then this would how much was taken from Anthony for Anthony's benefit. Hopefully, Anthony's taxes that they owed and or the benefits, including health insurance and 41 K And this is the net check if it was one check and then we give the employer information here. So this is a nice summer it doesn't give the detail will need for court, Elise, but we can try toe Ah, just these reports to get that detail by adjusting the date range. Possibly. And then we have that, of course, for all of our employees and then the total here. So this is going to be the one of the most basic kind of reports that we can get and get that detailed doesn't give us the detail by check. Doesn't give us the detail won't need in some cases, but probably are go to report to get kind of an overview of what's going on by employees as well as by total 144. 620 Review Financial Statements After December Payroll: In this presentation, we will review financial statements, the battleship income statement or profit loss after the payroll is processed for the month of December in QuickBooks Here we are on the home page. We currently have the open windows open. Orderto open the open windows to select thieve. You drop down and open windows list. We're gonna go to our reports, drop down now and to go to our financial statements. Those being the balance sheet so company and financial down to the balance sheet standard within the balance sheets dander. We're gonna customize the report up. Top date range 0101212 12 31 to 1. So, january through December 2021 we're gonna say OK, and here is our report. If we double click on the checking account here, we only have payroll information in it. We can see the trend that we have here. We had a paycheck for our first pay period August ending in August, pay period. But we paid it in September and then we paid the e. D. D. And the employees, the payroll taxes, Teoh to the state and to the Fed. Then we had our second payroll paying the paychecks, and in September that we processed in October. Then we paid the taxes and then theocracy Tober, which we paid the checks in November. And then we processed the taxes for that to the United States Treasury and then the November that we paid in December, the paychecks. And then we processed the liability checks. And then finally, we had the December payroll, which we processed in December. We've kind of made that change to make sure that we didn't have that timing difference process to check a day earlier than normal and recorded it in December. Here. So here's the pay check for the month in December, which we processed at the end of the last day of December. So that's gonna be our information. We double click. Any of this information will get to the paycheck, and obviously each of these paychecks here, if we go to the paycheck detail, this is the net check that's being shown on the checking account because that's what actually came out of the checking account. So that's what came out of the checking account here. If we close that back out, then we go into the liability section. So we have the F i t. The pica and the fight gassed Medicare and Social Security for go into any of these items, we'll see the payroll type information or the payable type information with payroll. And that means that this is the federal income tax for the employees where we have the typical payable trend, which is the liability goes up and then we pay it off and it goes back to zero. My ability goes up. We paid off. It goes back down to zero. Liability goes up, we paid off. He goes back down to zero so on and so forth until the last pay period here, which that has not yet happened because we haven't paid it off yet. So if we go into any of these, like Anthony, more 1 87 where does that come from? On the check detail. If we go into this check detail, we're going to say that that is the 1 87 from the federal with Holdings closing this back out, closing this back out, closing this back out. Same thing would be the true for the fighter taxes. If we're going to say Social Security O A S t I Social security fighter and we can go through here and same trend, except it looks like there's more data. And there is because it doubled up the employer and employee portion of Social Security and Medicare for Go into any of these 2 69 08 Where does that come from? Check detail. It's gonna be the to 69 0 it here, and the employer portion matched employee and employer matching. So we're gonna close that back out, clothes that back out and close this back out. So the group insurance have been accumulated. We haven't been paying those off notice that we go into insurance. We see that the checks for the insurance for our pay periods here and no payments they're not going back down to zero because we haven't made any payments to the insurance. So we need to do that. But we're gonna keep that for now. Also gonna close that bag out and then we're gonna go to the ah profit and loss reports up . Top company and financial. It's like the profit and loss standard report. Change those dates from a 101212 12 31 to 1, and that's gonna give us this for the year. If we double click on that item, this is the payroll, and we could see the payroll again. Just a lot of information and notice. We started just in the third quarter, not for an entire year, and it's just it's trying to break out by checks to give us all that detail, but obviously it's a bit overwhelming. But if we go into it and think about it, what's happening? Not so bad. So let's change it just to the last pay period, which was, Let's just change it to 12 31 to 1. And now we just see the last paper. It's still just a lot of information for just four employees. If we pick any of these four like Anthony more, we'll just say we have all this stuff related to Anthony. If we double click on the 1st 1 we're gonna say, Let me see that check detail the 4075 and the 112. That's the growth pay, not the net Pay not what's showing up on the cash side, but the gross pay here and that growth paid, remember, includes all the liabilities taxes that they Oh, we don't need to add another taxes on top of it because it's included in the girls paid. And then if we go into this item, the 2 59 where does that come from? Not here but there. And that. These are the employer taxes that there, including once again grouping them together into this into this journal entry. So the total here, 49 5 85 If we were to compare that to, like, our journal entry type of format when it would be these two journal entries, this would be the employee growth pay for all of our employees. And this would be the employer taxes paid over and above those adding up to for considers the 49 585 here. So those are the amounts that are being used to generate this 49 585 for close this back out. Well, first, take a look on. Ah, this item. Then if we look a total payroll expenses note again, we're breaking it out. So between the employee portion, that growth pay and the payroll. So if we Add these two up, then this is going to be for the entire year. 2 58 4 68 So 2 58 4 68 for closes back out. 2 58 4 68 is what is there for the entire paper. So remember, group in it altogether in QuickBooks. Gonna have to break it out. Possibly if we want to know the employer portion of the payroll taxes and the gross pay, which is going to be reported on w twos And what not for the employees earnings. 145. 625 Pay Payroll Liabilities After December Payroll: in this presentation, we will enter the payment of the payroll liabilities after the December payroll. In our papal problem within QuickBooks, here we are in the home page. We currently have the open windows open. You can open the open windows by selecting the view. Drop down and select in the open windows list. We're gonna open up our reports now by going to the reports and going down to the company and financial. We're looking here at the balance sheet. The balance sheet standard. We're gonna change the dates up. Top report dates. We're gonna change them. 20101212 12 31 to 1. That's January 1st to December 31st. 2021. I'm gonna change the fonts. Well, we are here and increase the font size a bit too. Let's say 11. Okay? Yes. Okay. So here is our of report. Now we have these items here that we're gonna basically need to pay off here. So we got these that were gonna pay off. We're gonna do the same process for paying them off. We're not just gonna go into the checks on write a check. We're gonna use QuickBooks little payroll process in order to write the checks. So to do that, we're gonna go to the home page, gonna go down here to the pay liabilities. So what has happened? Of course. In the month of December, we process the payroll, pay employees, and now we're gonna pay the liabilities that we took from, you know, the with holdings as well as the employer portion. So pay liabilities. Now we have to enter the date of the check. And remember, we put it in there as of 12. 31 2112 31 to 1. This is not the range of the payroll range, which is the month of December. It's the day we made Thea check process. Payroll gave the checks out. We didn't do it the next month, like we have been in the past week. We forced it. We made it sure that we put it in the last day of the current period so that we can we can have it within that current pay period. So then to do that. So that's that's when we wrote the check 12 31. In other words, for going to that, then we're not gonna print it here. And the check date is going to be We're gonna say this happened next year. Now, when we wrote this check, we wrote it in the next time periods 0101 22 Let's say 01 15 22. So let's review the dates here. What happened? Well, this was a payroll period for the pay period of December December for through December 31st that we paid on the 31st the paychecks on the 31st and we incurred liabilities. The with holdings in our portion of the payroll liabilities, which we are now pain January the next year, 2015 the 15th of the next year. So again, we have that cut off kind of issue here. We're paying the fly ability off in January for liability that was incurred in December. So those those air kind of confusing things within payroll is the date issues. You can't keep in mind as you got mold through those. So here's the check date once again, and we're just gonna go through and check these off. We're just gonna check off the taxes last we've been doing in the past. So we're gonna check off the federal unemployment, which there is. No. And that's okay. And we're gonna check off the federal withholding the Medicare and these Social Security. So those the ones we want if you're following along than your check number down here, should be 11 4 15 01 So make sure that is the case once that's capable. Double check our dates and what? Not everything. Everything looks appropriate. Everything looks good. So let's go ahead and create the paychecks. So here it is. I'm gonna go ahead and save and close and let's see what happens to our balance sheet over here going to the balance sheet. Refreshing. And it looks pretty much the same. So nothing would be. I'm not very impressed by that change. And the reason nothing happened typically is because, of course, the date range here is as of the end of the year. So remember, as of the end of the year, we still owe this information. So if we're processing year end data, we just got to keep that We got to keep those cut off dates in mind, and so we process the payroll and therefore the expense is on the income statement whether we be under cash basis, work rule basis. But the liability is still owed because we didn't pay it as of 12 31. If we want to see the payment, then we'll have to change his date. Range will have to change this to the next year to something like a 101 to 2 Teoh over 1 15 to 2 January 2022. And so, if we if we go there, then we see that we don't know. We don't know anything anymore on those items for the payroll light because they've been paid. Okay, so we could see that more clearly on the trial balance. So let's go to the reports. Drop down. Let's go to the accounting and taxes and take a look at the trial balance. Changing that date range a 10121 12 31 to 1 and then we see again. It's there's nothing in. Ah, there's no change. These items are still there. Let's change the font. What? We're here. Customized fonts. Font 11. Okay, Yes. Okay. Okay. So again, these these items of liability items are still there. but we can double click on them. Look at the detail. So here's the F. I. T. And it still owed this last paper. It's what? There's the zero. And then we had these paychecks. That happened. If we change this date range Teoh 01 15 to 1, then, Ah, 1 15 to 2. Then we will We will see that it goes back down to zero. Here's our payment. So it's crossing over that cut off that natural kind of cut off that we would think of as the end of the year cut off. But if we go through January 22nd then Okay, that pays it off that payment. Then if we tied, if we try to tie out these payments to the liabilities, you got to recall that they're gonna be that crossover over the cut off date. This is a payment that happened in the next year for the prior year's payroll. So if we close that back out, it'll same thing will happen for any of these. Of course, the H eyes. Same kind of thing. It's still owed as of the end of December. But if you go 10 oo 1 15 to to the next year, January 15th. Then we'll have those payments and it will go back down to zero. So if we close this back out, we'll see once again that these art are all do. If I changed his date, however, 201 15 to 2, then they all go to zero. So just be aware of that of that cut off. Be aware of what's going to be showing in the end of the year reports and what's gonna be there after we pay it off. Be aware that the payments that you look at in 2022 especially at the beginning of the year , may not necessarily be for the year 2022. And that's really important when considering and talking to the I. R s about liabilities because they get really confused about or, you know, it's hard to go over that cross over. So you've got to get you got to get that crossover correct so that you can clear up any problems. Those problems happening due to the difference in pay periods and when the payments were made as opposed to win, the liability was incurred and whether it be incurred on a cash paces or an accrual type basis, 146. 630 Year End Payroll Forms: presentation. We will take a look at the year end payroll forms that 9 41 the 9 40 where that data can be found with the payroll reports within. QuickBooks, here we are in the home page. We currently have the open windows open in order to open the open windows go. The view dropped down and the open windows list. We're now going to go to the reports up top. We're gonna go to the employees and payroll and open up the payroll. Summary report within payroll summary We're gonna change the date to the fourth quarter. It's going to be 10 01 21 to 12 31 21 sets October 1st to December 31st. This report will give us the employees up top and is going to give us the total and notice . We're looking at the total for the month of October so we can use this information to kind of think about and think out where the where the numbers are coming from from the 9 41 Clearly, if we had paid for the payroll, we could run the payroll and QuickBooks would help to process that payroll information It's useful, however, to know what reports are are making this information up and trying to see if we can sort this information out to see how the papal forms are were created by QuickBooks. So if we go back over here and note that we're gonna have the same kind of issue if we as we did in the third quarter, when we looked at the 9 40 ones, if we double click on the salary total here, you know we'll have the detail and it will give us October, November, December and in December. Why you do you think we don't have three months instead of four in here? And that's because of this timing difference. Remember that the payroll is going to be processed. QuickBooks will process in accordance with payroll regulations on a cash basis, not an accrual basis. And on our Excel problem, we basically ran the problem as if we processed the payroll check in the same month as the paper it happened. So, in other words, this check should have been run in order to tie out to the QuickBooks report and to the Excel Report. As of the end of September, the end of the pay period and that will put us all on. It'll take away the cash versus a cruel kind of problem here that happens within payroll, which will demonstrate that timing difference more so in another example problem. So in other words, what we'd like to see here in the fourth quarter ty out, Teoh, The the Excel worksheet is just these 3/4 November, December. So this would be October, November and December, actual payrolls. And therefore, I'm gonna change the day just a little bit to tie out to those numbers. So we're gonna close this back out and just be aware that you're gonna have that timing difference. We'll show that timing difference in another example. But for now, we want to keep it. The A cruel and the cash pretty much the same. So we can see where all these numbers are basically being generate front and tie them out in terms of just calculations. So I'm gonna change this to 10 to and if we do that, we go one more month up, one morte up, and then if we double click on this item again, we'll see that we just have the three months that we're gonna say is the fourth quarter here, So I'm gonna close that back out. Hope that makes sense. And that comes out Teoh 1 44 3 to 33 2 30 to 1 44 to 32. Now, if we go to our information on our Excel sheet, that's in essence, what we're breaking out here on my excel sheet. If we were to add up the full quarter, we would say that the fourth quarter, then is the 1 44 to 32 in the fourth quarter here. And then if we were to add up the 2/4 that we had for the third quarter and the fourth quarter, then we would be adding up the total of the 1 41 206 And so, if we went, in other words, for the entire year 011 21 We're at the one Ah, the to 41 206 So let's go back, Teoh 10 0 to 21. So this is gonna be the fourth quarter. If we use this to just go down our 9 41 we scroll down, we see the 1st 1 was the wages and tips and other compensation that's gonna be the 1 35 909 If we go back over here, we're gonna take out Remember the 401 K and basically, in essence, for that wages and tips for the F I T wages and tips. And that's gonna be then this 1 35 909 That's gonna be that item there. Then we're gonna have the with holdings. The with holdings are going to be this 25 to 12. That 25 to 12. We can't really re calculate it because it's one that it's that complicated tack. It is what it is. Whatever we calculated it to be in the system is what we're gonna have in the system 25 to 12. It might be different by rounding as we entered it into the system here, but it's 25 1 97 in our system here. Not sure exactly what that difference is. It I was $14 but I'm not sure exactly how we came up with that difference a little bit higher than rounding. But just remember that in essence, whatever the system calculates for the federal income tax withholding is what it is because we can't re calculate we can't recheck it because it's too complex to progressive system. So whatever we input into the system, that is what's going to be in the system. Whether we let the system calculated within the payroll system or whether we entered in their manually, Whatever we entered is what we entered the If we look at the Medicare and Social Security, though, those air Adams weaken re calculate. So those are items. In other words, on the reports here, they're gonna want the actual full number in terms of the wages subject to the soul security, Medicare, and then to re calculate. So remember that as we looked at when we looked at this problem, this this number here is basically twice the rate 0.62 point 01 for nine is doubled. So 0.12 four. So to get these numbers, we can get these numbers because those will be in our report, similar toe how we had the federal tax withholding. But we're also gonna have to double, check, weaken, recheck. We're gonna need these numbers, and that's gonna be the wages the actual wages subject to in this case, still security and Medicare. So this wage up top is going to be the confusing part. We don't really have anything for that because remember, somebody hit the cap and so we don't have on this report. There's not an easy way for us to say, OK, who hit the cap? What we do know is that this is the tax that has been calculated and we know what the rate is. This is only half so meaning this is the employee half. So if I take the 6053.23 and divided by the rate which is 6.2% of 0.62 that is this the 97 6 32 So we can kind of back into what the Social Security wages were that we input into the system and you'll recall that we had one employee that hit the cap are large earner, hit the cap and therefore have no more wages subject. So as long as we know what that cap is, then we can enter that number here and we can re calculate it. So it's twice that because we have 12,001 06 Okay. And that is of course, the 6053 0.23 times to that's the 12 06 about rounding. So that's gonna be that one. Now, the Medicare is straightforward because it's going to use the total wages. It doesn't have that kap situation, and we're not taking out anything from it, as we did with the f i t on the 41 k So we just have that 1 44 to 32 again twice. This amount gives us the for 18 to, so that for one, 82 is going to be here. It is, in essence, this 2091.39 times two. And we know that the total wages is this 1 44 to 30 to 50. So we've basically found all all of these numbers now also know that you can see the other half. This is the employer, half security and Medicare, same numbers. That's why I'm just multiplying at times too, because they'll be the same. So if we go back over here, we then have found this number, this number, this number this number. This number. This number. This is just adding up some numbers up top so we could find there's nothing new there. This is our taxes adding up more numbers, nothing new there. And then we have the liability portion down here, and that's that's gonna be not from our payroll reports, but the actual checks we wrote. So we're going to go see what the checks we wrote word because, remember, we should end up with zero Do at the end of the day if we go. What we're looking at here is the liability calculation and saying we've used these numbers from this report the pit to figure out the liability calculation to figure out the payments we could go toe a vendor report. So if we go up and select reports and then we're gonna go down to vendors and payable and let's go down to the transaction list by vendor transaction list by vendor, and I'm gonna change the date range from 0101212 12 31 to 1. That's gonna be the year were working on note that if we had, a lot of vendors would have to scroll down We're looking for the United States Treasury. That's who we paid here the E d d r. The payments for the suit payments that we have made. Now, if we just want the fourth quarter, we have to go through here and say, Okay, when were the fourth quarter payments made? And we could see that we have this payment on 10 15 which is in the fourth quarter when we made the payment. But again, there's kind of a difference there. What really happened is we made that for the prior quarter. The first quarter payment was on 11 15 which we made for October and then 12 15. And then there should actually be another here, which we're going to say I have to change the dates here outside the year to go Teoh 1 15 That's when we made the payment and 22 the next year so that we could see that payment that we made for the for the end of December. So I can't be careful of that. If there's a problem with applying out the payment or a problem with the liability and we think everything is good, what's the problem? Probably the fact that there's some kind of difference in terms of the timing of when the payment was made and to what quarter it was applied to. So if we then take out the calculator here, we're going to say, All right, the last quarters, we're gonna be 11 the last three here. So we've got all started. The bottom 11415.1 plus 2 14 316.61 Plus the 15755.1. These three items is going to give us the 41 4 86 63 And that's gonna be where we can derive our item here and again. It's off from our from our example problem in Excel, mainly just rounding differences that we had as we go further there. But that's when it way we get the actual payment. Remember, there's 22 items we're gonna have on this form. The liability half and the payment half the liability half is gonna be the reports that payment half is what we actually paid. So we can go to the vendors and see those payments. What the actual cash that went out of our checking account. We won't go through all the reports and how they tie together again here. But remember that the 9 40 ones, if we add them up and we add up the wages for them, we should get to basically a yearly number for each quarter, obviously, and the same information that is on the 9 41 Many of the same details in the same reports. The payroll summary report can be used in to fill out the W twos, and you can see how this report will be used to basically draw in and fill in the W two reports for each employee and then the W three, which is in essence, a summary of the W twos, so I won't go through and list all that out from QuickBooks. But the similar reports that we have here within QuickBooks to our reports that we generated in the Excel problem would then be used to fill out the year in reports in a similar fashion