Exam 10: Payroll Liabilities

A company's 18 sales personnel earned salaries of $22,000 during the period March 5-10, all of which were subject to 4.95% CPP and 1.66% EI. All personnel are entitled to 2 weeks' paid annual vacation. In addition, the company has agreed with its employees to withhold the following amounts: $900 for hospital insurance, $4,400 for federal and provincial income taxes, and $180 for union dues. Prepare the March 10 general journal entry to record the payroll.

Most employers engaged in employing workers must pay

The Payroll Register provides the information needed to pay employees.

Stellar Company employees had the following earnings records at the close of the April 30 payroll period: Stellar Company's payroll benefits expense for each employee includes: 4.95% CPP and 1.66% EI on the amount earned. What is the total payroll benefits expense for the November 30 pay period?

The Employee's Individual Earnings Record serves as a subsidiary ledger to the Payroll Register account in the General Ledger.

Payroll taxes are levied on wages actually paid, not on accrued wages.

Spieth Company employees had the following earnings records at the close of the November 30 payroll period. Spieth Company's payroll taxes expense for each employee include: 4.95% CPP on the annual pensionable earnings 50,100 ($55,900 maximum with the first $3,500 exempt), and 1.4 times the employees EI rate of 1.66% paid to a maximum of $51,700 annually. As well, $300 in federal and provincial income taxes will be deducted from the employees' gross pay for the week. Prepare the journal entries to record:(a) The payroll accrual.(b) The employer payroll tax expense. Note that R. Scott would have already paid the maximum CPP and EI for the year

The entry to record payroll includes a debit to salaries payable.

Employers never make deductions from employees' wages for

The amount an employee earns before any deductions such as EI, CPP, and income tax withholdings is the

Employee (fringe) benefit costs represent expenses to the employer in addition to the direct costs of salaries and wages.

Payroll taxes levied on employers include Canada Pension and Employment Insurance.

Since Red River Company experienced very few on the job accidents, the company has received a very favourable rating. As a result, it should expect to pay substantially smaller amounts of employment insurance premiums than normal.

After posting the entries to record salary expenses and payroll expenses, Alpha Company's Employment Insurance Payable account has a $9,000 credit balance. This means that the payroll tax expense of Alpha Company included a $9,000 expense resulting from Employment Insurance.

Haines Company prepared the following payroll summary for the current month: CPP is 4.95% and EI is 1.66%, and none of the current month's salaries and wages exceed the CPP or EI limits. Haines makes a pension contribution equal to 9% of each employee's gross earnings. A vacation pay accrual is also made at 3.6% of the gross earnings. Haines has 10 employees. Prepare the journal entries to record:(A) The month's payroll accrual.(B) The month's employer payroll tax expense.(C) The employer's pension contribution and vacation pay accrual.

Valentina company has 9 employees who earned a total of $27,000 in June ($3,000 each). CPP deductions are 4.95% paid by the employees and 4.95% paid by the employer. Income tax withholdings amount to $4,500. The employee EI rate is 1.66%. The take-home pay of the 9 employees for June is

A payroll deduction required by the federal government and used to pay the cost of the employment insurance programs is called

Canada Pension Plan deductions are social security taxes.

The same form is used to report both Canada Pension and employee income taxes withheld.

Overtime premium pay is not subject to income tax deductions.