Deductions Overview
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Description
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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.
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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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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It’s the employer’s responsibility to submit and report payroll taxes and statutory deductions that have been calculated for every employee. This video reviews how businesses pay taxes and how they report those payroll taxes.
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Pay groups are assigned to a set of employees and define how they are paid. Pay groups determine pay frequency, pay schedule, and processing steps.
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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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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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