Are payroll withholding taxes an expense or a liability?Payroll taxes withheld from employees’ wages & salaries are liabilities of the employer. Withheld taxes from employees are the employees’ portion of FICA or Social Security & Medicare taxes, federal income and state income taxes.
Withheld is the employees’ money that the employer is acting as an agent & remitting the money.
What is accrued payroll?Accrued payroll would be wages, salaries, commissions, bonuses & the related payroll taxes & benefits that have been earned by a company’s employees. But, have not yet been paid or recorded in the company’s accounts.
If you get paid on Dec 31; that would include all of wages that the hourly paid employees has earned as of Dec 31, but will not be paid until the following payday which is Jan 5.
What is the difference between biweekly and semimonthly payroll?Bi-weekly happens every two weeks while semi-monthly payroll occurs twice per month such as the 1-st and the 16-th.
What is the difference between Social Security and Medicare Taxes?Social Security Tax rate is 6.2% with limit that changes every year. Medicare Tax rate is 1.45% with no limits. Together they are what's called at the FICA taxes.
What are Payroll Withholding Taxes?Withholding taxes are your income taxes along with FICA taxes that all depend on your marital status and number of dependents.
What is the difference between wages & salary?Wages is with employee compensation based on the number of hours worked multiplied by an hourly rate of pay. So if an employee working 40 hrs during a work week & the person’s hourly rate is $15. Then, the employee will receive a paycheck showing gross wages of $600.
Salary is with employee compensation quoted on an annual basis. For example, if the manager of the company is making $120,000 per year and is paid semi-monthly, the employee’s paycheck will show gross salary of $5,000 for the half-month.