Section+2

=Determining Payroll Tax Withholding=

Payroll Taxes

 * Taxes based on the payroll. (Mrs. Sullivan)
 * All payroll taxes are based on employee total earnings (Robin)
 * A business is required by law to withhold certain taxes from salaries. (Jenna Jarnagin)
 * A deduction from total earning for each person legally supported by a taxpayer, including the employee, is a withholding allowance. (Alex Roberts)
 * A business is required by law to withhold certain payroll taxes from employee salaries. All payroll taxes are based on employee total earnings. Therefore, accurate and detailed payroll records must be maintained. (Rudy Ruiz)
 * Errors in payroll records could cause incorrect payroll tax payments. Federal and state government may charge a business penalty for failure to pay correct payroll taxes when they are due. (Jonathan Gibbons)
 * Federal and State governments may charge a business a penalty for failure to pay correct payroll taxes when they are due. (Sarah Hill)
 * Employers in many states are also required to withhold state, city, or county income taxes from employee earnings. (Jocelyn Camarillo)
 * Payroll taxes withheld represent a liability for the employer until payment is made to the government. (Chelsea Wagner)
 * Payroll taxes are taxes based on the payroll of a business. (Abril Santoyo)

Employee's Withholding Allowance Certificate

 * You use a W-4 to determine the amount of income tax to be withheld from the employee's paycheck. (Mrs. Sullivan)
 * A married employee will have less income tax withheld than a single employee with the same total earnings. (Robin)
 * The amount of income tax withheld is based on employee marital status and number of withholding allowances. (Jenna Jarnagin)
 * A deduction from total earnings for each person legally supported by a taxpayer, including the employee, is called a withholding allowance. (Abril Santoyo)
 * Employers are required to have on file a current Form W-4 for all employees. The amount of income tax withheld is based on employee marital status and number of withholding allowances. (Rudy Ruiz)
 * A married employee will have less income tax withheld than a single employee. (Jonathan Gibbons)
 * A deduction from total earnings for each person legally supported by a taxpayer, including the employee is called a withholding allowance. (Sarah Hill)
 * Employers must be aware of changes in tax laws and forms. (Jocelyn Camarillo)
 * Individuals cannot claim exemption from witholding if (1) their income exceeds $700 and includes unearned income such as interest and dividends and (2) another person can claim them as a dependent on their tax return. (Chelsea Wagner)
 * Most employees are required to have federal income taxes withheld from their salaries. (Alex Roberts)



Employee's Income Tax Withholding

 * There are two different Tax Withholding tables. One for single persons and one for married persons. (Mrs. Sullivan)
 * Tables are prepared for various payroll periods -- monthly, semimonthly, biweekly, weekly, and daily. (Jenna Jarnagin)
 * The amount of federal income tax withheld from each employee's total earnings is determined from withhold tables prepared by the Internal Revenue Service. (Jocelyn Camarillo)
 * Single persons are taxed a different levels of income than married persons. (Abril Santoyo)
 * The amount of federal income tax withheld from each employee's total earnings is determined from withholding tables prepared by the Internal Revenue Service. (Sarah Hill)
 * IRS stands for Internal Revenue Service. (Chelsea Wagner)
 * Omni Import's pay period is semimonthly, so Omni uses the semimonthly withholding tables. (Rudy Ruiz)




 * ~  ||~ Determining an employee's income tax withholding ||~   ||
 * Steps ||  || By ||
 * 1 || Select the appropriate table. || Alex Roberts ||
 * 2 || Locate employee's total earnings between the appropriate lines of the "at least" and "but less than" columns. || Robin Hamilton ||
 * 3 || Follow selected wage lines across to the column headed by the employee's number of withholding allowances. Mr. Selby's federal income tax withholding, with total earnings of $1,137.00 and withholding allowances of four, is $63.00 for the semimonthly pay period ended December 15. || Jon Gibbons ||

Employee Social Security and Medicare Tax

 * Social Security Tax and Medicare Tax are both calculated as a percentage of the total employee's earnings. (Mrs. Sullivan)
 * Social Security and Medicare taxes are paid by both employees and employer. (Jenna Jarnagin)
 * Social Security Tax is calculated on employee earnings up to a maximum in a calendar year. (Alex Roberts)
 * Both Social Security Tax and Medicare Tax can be changed by an act of Congress. (Robin)
 * Social security is calculated on employee earnings up to maximum paid in calendar year. (Sarah Hill)
 * The maximum amount of earnings on which a tax is calculated is called a tax base. (Jocelyn Camarillo)
 * An act of Congress can change the tax base and tax rate at any time. (Chelsea Wagner)
 * Tax base is the maximum amount of earnings on which a tax is calculated. (Abril Santoyo)
 * Congress sets the tax base and the tax rates for social security tax. (Rudy Ruiz)
 * A federal tax paid for old-age, survivors, and disability insurance is called Social Security Tax. A federal tax paid for us called Medicare tax. Each of these taxes is accounted for and reported separately. (Jonathan Gibbons)



13.2 Review Questions

 * 1) //Where does an employer get the information used to determine the amount of federal income tax to withhold from employees' earnings?//
 * 2) //Employee federal income tax withholdings are based on what two factors?//
 * 3) //Does the employer or employee pay Social Security Tax and Medicare Tax?//