Question

SweepIt Cleaning Service reported the following amounts for the week ending November 4. The total amount earned by all employees is $2,193.40. The amount withheld for federal income tax is $263.00. Social security tax is $136.00, and Medicare tax is $31.80. Three of the employees each have $11.25 deducted for hospital insurance. The amount withheld for state income tax is $38.70. For each tax/withholding, identify if the amount will be recorded in PAYROLL or EMPLOYER’S PAYROLL TAX transaction?

Answer 1

Answer:

The total amount earned by all employees is $2,193.40. Wages must be recorded as a payroll transaction.

The amount withheld for federal income tax is $263.00. Federal income taxes must be recorded as payroll taxes.

Social security tax is $136.00, and Medicare tax is $31.80. Social Security and Medicare must be recorded as employer's payroll taxes transactions (the employer pays them).

Three of the employees each have $11.25 deducted for hospital insurance. Health care insurance must be recorded as a payroll transaction.

The amount withheld for state income tax is $38.70. State income taxes must be recorded as payroll taxes.