Payroll Processing & Administration Flashcards

An employee is paid bi-weekly. What is the number of pay periods in a standard year?

Answer: 26

Bi-weekly pay means employees are paid every two weeks, resulting in 26 pay periods per year (52 weeks ÷ 2).

Which IRS form does an employee complete to determine the amount of federal income tax withheld from their paycheck?

Answer: Form W-4

Form W-4 (Employee's Withholding Certificate) is completed by employees to tell employers how much federal income tax to withhold.

Under the Fair Labor Standards Act (FLSA), what is the minimum overtime rate for hours worked over 40 in a workweek?

Answer: 1.5 times the regular rate

The FLSA requires non-exempt employees to be paid at least one and one-half (1.5) times their regular rate for hours over 40 in a workweek.

What is the employer's share of the Social Security tax rate as of 2024?

Answer: 6.2%

Employers pay 6.2% of an employee's wages for Social Security tax, matching the employee's 6.2% contribution.

Which payroll journal entry correctly records the employer's payroll tax expense?

Answer: Debit Payroll Tax Expense, Credit Payroll Tax Payable

When employer payroll taxes are accrued, the debit goes to Payroll Tax Expense and the credit to Payroll Tax Payable (a liability).

A garnishment order requires withholding $300 per week from an employee's wages. The employee earns $800 net. Under Title III of the Consumer Credit Protection Act, what is the maximum garnishable amount?

Answer: $200

Title III limits garnishment to 25% of disposable earnings; 25% of $800 = $200, which is less than $300, so only $200 can be withheld.

When must employers deposit federal payroll taxes if they are a monthly depositor?

Answer: By the 15th of the following month

Monthly depositors must deposit payroll taxes accumulated during a calendar month by the 15th day of the following month.