IntroductionIntroduction
If you have ever received a paycheck, you probably were surprised at how much was deducted from your gross pay.
Accountants must calculate pay and deductions. There are two types of deductions - employee and employer. In America, the Federal Insurance Contributions Act (FICA) requires all companies to withhold a portion of their employees' earnings to contribute to Social Security and Medicare. Similarly, employers also have to pay a contribution towards Social Security and Medicare.
In this lesson you will learn how to calculate payroll, and about different types of deductions, taxes, and the forms related to payroll taxes.
Following successful completion of this lesson, students will be able to:
- Calculate payroll deductions by applying the correct tax rate to gross pay.
- Calculate net pay.
- Complete a payroll register.
- Distinguish between gross pay and net pay.
The above objectives correspond with the Alabama Course of Study: Accounting: Objective: 11.
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