Step two of payroll cycle: Preparing the payroll register
Step 1: Employees work for the week and submit time sheets.
Step 2: Accounting does payroll for the week. Prepare the Payroll Register.
a. Calculate Gross Pay including overtime if any
b. Calculate all withholding amounts from gross pay
i. soc Sec 6.2% withheld ($117,000 limit of taxable gross pay )
ii. Medicare 1.45% withheld no limit of earnings
iii. Federal Income Tax withheld (Use Tables)
iv. any other withholding required by employment contract.
c. Accountaant enters all above payroll data in Payroll Register for ..................the week's payroll.
Step 3: Journalize payroll
Step 4: Journalize paying employees.
Step 5: Update the individual Earnings Record of each employee.
Step 6: Post the general ledger accounts.
Step 7: Pay liabilities to government entities.
Step 8: End of year Send out W2's to employees based on each earnings record per employee.