Manual Payroll Research Paper

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Manual Payroll A manual payroll system requires painstaking application; the entire payroll process is done by hand. The likelihood of errors can be high with this system; therefore, manual payroll is best if you have few employees, such as fewer than 10. The U.S. Department of Labor mandates employers to pay employees appropriately for time worked. The IRS and the state require employers to fulfill certain payroll tax obligations. These regulations apply, even if your payroll is manual. Things You'll Need • Time sheets/time card • Form W-4 • IRS Circular E Show (4) More Instructions 1. o 1 Pay applicable workers based on their timekeeping data. Most likely you require hourly workers to use a time clock or to complete weekly time sheets. Pay them according to what the timekeeping system indicates. For instance, say the pay schedule is biweekly and the employee earns $9/hour. The time sheet for…show more content…
Check with your state labor board (see Resources) to know which employees are exempt from overtime. o 3 Calculate involuntary deductions. Involuntary deductions are also called statutory deductions. They include payroll taxes, such as federal income tax, state income tax, Social Security tax and Medicare tax. Consult the IRS Circular E for federal payroll tax regulations and your state taxation agency (see Resources) for state payroll tax regulations. Withhold federal income tax based on the Circular E’s withholding tax tables and the employee’s W-4 form. Withhold Social Security tax at 6.2 percent of gross income, up to $106,800 for the year. Withhold Medicare tax at 1.45 percent. Consult your state withholding tax tables (see Resources) and the employee’s state income tax form to determine state income tax withholding. Involuntary deductions also include wage garnishments; consult the garnishment paperwork for instructions on how to handle the deduction. o

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