Deductions Overview
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A deduction is a monetary amount subtracted from an employee’s taxable income that reduces the amount paid on a pay statement.
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A deduction is a monetary amount subtracted from an employee’s taxable income that reduces the amount paid on a pay statement.
Payroll is the cyclical process in which pay for employees is calculated, distributed, and reported.
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The pay statement, also known as a pay stub, includes the details of the employee’s pay for that pay period. Pay statement details help employees understand their pay and check for inaccuracies.
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A general ledger is a journal containing accounting transactions related to a company’s assets, liabilities, equity, revenue, and expenses.
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Payroll taxes are calculated based on the total compensation of each employee. Federal and State withholding taxes are based on the Form W-4 information for each employee.
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Earnings identify different types of employee compensation for services provided. Earnings can also include specific parameters such as accounting rules, tax laws, and reporting requirements.
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After the proper amount of taxes are withheld for the employee and employer, it needs to be paid to the proper agencies. Federal income and insurance tax payments must be paid electronically through the electronic federal tax payment system.
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