Department
Subject Area and Course Number
ACCT 130
Title Payroll Accounting
Disciplines
Accounting (Masters Required)
Units
4.000

Repeatability 0 - May not be repeated
Catalog Course Description
(4) S - CSU Prerequisites: ACCT 110 or ACCT 230 Skills Advisories: MATH 4 and eligibility for ENG 110 or ENG 110H or ENG 110GB Study and application of payroll accounting concepts and procedures, and related internal controls. Specialized areas of study involve federal and state payroll taxes and withholding on wages and tips; preparation and filing of governmental forms and reports; analysis and recordkeeping systems and procedures; automated payroll accounting systems.
Lecture Hours
Lab Hours
Out-of-Class-Hours
128.000-144.000 Total Hours
Total Contact Hours
64.000-72.000 Total Hours

Prerequisite: ACCT 230 or ACCT 110
Prerequisite or Corequisite: None
Concurrent Corequisite: None
Course Advisories: None
Limitation on Enrollment: None

Course Objectives:
Describe payroll accounting concepts, and design basic payroll accounting systems with adequate records and internal controls.
Describe payroll accounting concepts, and design basic payroll accounting systems with adequate records and internal controls.
Identify applicable governmental (federal and state) payroll and employment legislation, and properly prepare governmental (federal and state) payroll related forms and reports.
Describe, contrast, and compare independent contractors vs. employees.

Student Learning Outcomes
ACCT130 SLO1 - Differentiate the various laws that affect employers in their payroll operations.
ACCT130 SLO2 - Calculate regular and overtime pay using appropriate hour and wage types.
ACCT130 SLO3 - Distinguish the types of compensation that are defined as wages.
ACCT130 SLO4 - Compute the amount of federal, state and local taxes to be withheld using the percentage and wage-bracket methods.
ACCT130 SLO5 - Complete basic forms required by federal and state agencies to report wages and taxes.

Course Content and Scope
  1.           Need for Payroll and Personnel Records
    1. The Payroll Profession
    2. Fair Labor Standards Act (Federal Wage and Hour Law)
    3. State Minimum Wage and Maximum Hours Laws
    4. Fair Employment Laws
    5. Federal Insurance Contributions Act (FICA)
    6. Federal and State Income Tax Withholding Laws
    7. Federal Unemployment Tax Act
    8. State Unemployment and Disability Laws
    9. Other Federal Laws Affecting the Need for Payroll and Personnel Records
    10. Other State Laws Affecting the Need for Payroll and Personnel Records
    11. Payroll Accounting Systems and Personnel Systems
      1. GOALS:  After completing this section, the student will be able to:
      2. 1.          Identify the various laws that affect employers in their payroll operations
      3. 2.          Describe the record-keeping requirements of these laws
      4. 3.          Identify the elements of a thorough payroll record-keeping system, and its internal controls
      5. 4.          Describe the procedures that are generally followed in a Human Resources or Personnel Department
      6. 5.          Identify the various personnel records that are utilized by businesses and describe the type of information that is shown on each form
      7. 6.          Describe the procedures employed in a typical payroll accounting system
      8. 7.          Identify and differentiate the payroll register and the individual employee's earnings record
  2.         Computing and Paying Wages and Salaries
    1. Determining the Employee's Working Time
    2. Keeping a Record of Time Worked
    3. Methods of Computing Wages and Salaries
    4. Methods of Paying Wages and Salaries
    5. Unclaimed Wages
      1. GOALS:  After completing this section, the student will be able to:
      2. 1.              Describe the major provisions of the Fair Labor Standards Act as they affect:
        1. a.          minimum wages
        2. b.          equal pay for equal work regardless of sex or age
        3. c.          overtime pay
        4. d.          record keeping
        5. e.          child labor
      3. 2.              Distinguish between an employee's principal activities and his/her preliminary and postliminary activities
      4. 3.              Describe the main types of time records--time sheets and time cards--and describe the kind of payroll data collected on each
      5. 4.              Perform the following arithmetic operations:
        1. a.          Convert weekly wage rates to hourly rates
        2. b.          Convert monthly and annual salary rates to hourly rates
        3. c.          Calculate regular earnings and overtime earnings to arrive at total gross earnings
        4. d.          Apply two different methods in calculating overtime payment for pieceworkers
      6. 5.              Describe how wages and salaries are paid:
        1. a.          In cash
        2. b.          By check
        3. c.          By electronic transfer of funds
  3.       Social Security Taxes
    1. Coverage Under the Federal Insurance Contributions Act (FICA)
    2. Self-Employed Persons--Their Income and Taxes
    3. Application for Employer Identification Number (Form SS-4)
    4. Employee's Application for Social Security Card (Form SS-5)
    5. Request for Statement of Earnings (Form SSA-7004)
    6. Quarterly Returns Required Under FICA
    7. Employer's Quarterly Federal Tax Returns
    8. Federal Penalties
    9. Employer's Quarterly State Tax Returns
    10. State Penalties
      1. GOALS:  After completing this section, the student will be able to:
      2. 1.              Identify, for social security purposes, those persons who are covered under the law, those services that constitute employment, and the kinds of compensation that are defined as wages.
      3. 2.              Apply the current tax rates for purposes of the Federal Insurance Contributions Act, and the Self-Employment Contributions Act.
      4. 3.              Describe the importance of obtaining and correctly using the Employer's Identification Number, and the Employee's Social Security Number.
      5. 4.              Complete accurately the Employer's Quarterly Federal, and State Tax Returns, and the Federal Tax Deposit Coupon Book.
      6. 5.              Describe the several different requirements and procedures for depositing FICA taxes and income taxes withheld from employees' wages.
      7. 6.              Describe how, as collection agents for the government, employers may be subject to civil and criminal penalties if they fail to carry out their duties.
  4.       Withholding for Income Taxes
    1. Coverage Under the Federal and State Income Tax Withholding Law
    2. Withholding Allowances and Withholding Certificates
    3. The Main Methods of Withholding, and Other Methods of Withholding
    4. Withholding Tax on Supplemental Wage Payments and Withholding Tax on Tips
    5. Advance Payment on Earned Income Credit (EIC)
    6. Individual Retirement Accounts (IRA)
    7. Wage and Tax Statements
    8. Employer's Returns and Payments, and Information Returns
    9. Employer's Records for Income Taxes Withheld
    10. Withholding State Income Taxes and Withholding Local Income Taxes
      1. GOALS:  After completing this section, the student will be able to:
      2. 1.              Determine coverage under federal and state income tax withholding laws by examining:
        1. a.          The employer-employee relationship
        2. b.          The kinds of payments defined as wages
        3. c.          Those kinds of employment that are excluded under the law
      3. 2.              Complete Form W-2 and recognize other wage and tax statements (forms)
      4. 3.              Calculate the amount of federal and state income taxes to be withheld under the percentage method and the wage-bracket method.
      5. 4.              Describe alternative methods of withholding federal income taxes such as quarterly averaging of wages, annualizing of wages, and cumulative withholding
      6. 5.              Calculate the withholding of federal and state income taxes on supplementary wage payments such as vacation pay, bonuses, commissions, dismissal, and tips.
      7. 6.              Complete accurately the Employer's Quarterly Federal and State Tax Returns, and the Federal Tax Deposit Coupon Book.
      8. 7.              Describe the major kinds of information returns.
      9. 8.              Discuss how the task of payroll accounting is further complicated by the imposition of state and local income taxes.
  5.         Unemployment Compensation Taxes
    1. Coverage Under Federal and State Unemployment Tax Acts
    2. Federal Unemployment Compensation Taxes and Credits
    3. State Unemployment Compensation Taxes and Credits
    4. Unemployment Compensation Reports Required of the Employer
    5. Unemployment Compensation Benefits
      1. GOALS:  After completing this section, the student will be able to:
      2. 1.              Describe the basic requirements for an individual to be classified as an employer or an employee under the Federal Unemployment Tax Act.
      3. 2.              State the factors that should be considered in determining the coverage of interstate employees.
      4. 3.              State what is defined as taxable wages by the Federal Unemployment Tax Act.
      5. 4.              Calculate the federal unemployment tax and the credit against this tax.
      6. 5.              Describe how an experience rating system is used in determining employer's contributions to state unemployment compensation funds.
      7. 6.              Complete the reports required by the Federal Unemployment Tax Act.
      8. 7.              Describe the types of information reports under various state unemployment compensation laws.
      9. 8.              State the factors that determine eligibility for unemployment compensation benefits.
  6.       Analyzing and Journalizing Payroll Transactions
    1. The Payroll Register and The Employee's Earnings Record
    2. Recording the Gross Payroll, and Withholdings and Vacation Pay
    3. Recording Payroll Taxes
    4. Recording the Deposit or Payment of Payroll Taxes
    5. Recording the Adjustments for End-of-Period Wages
    6. Recording Transactions Pertaining to Other Payroll Deductions
    7. Accounts Used in Recording Payroll Transactions
      1. GOALS:  After completing this section, the student will be able to:
      2. 1.              Record payrolls in payroll registers and post to employees' earnings records.
      3. 2.              Journalize the entries to record the payroll amounts withheld from employees' gross earnings, and payroll taxes.
      4. 3.              Update the various general ledger accounts that are used to accumulate information from the payroll entries.
      5. 4.              Describe the procedures for the payment and the recording of the payroll tax deposits.
      6. 5.              Prepare the various reports required by government agencies using the information in the payroll registers and earnings records.
  7.   Automated Payroll Accounting Systems
    1.  Accounting Board Systems
    2.  Mechanical Payroll Systems
    3.  Electronic (Computer) Systems
    4.  Data Service Centers
      1. GOALS:  After completing this section, the student will be able to:
      2. 1.              Compare the flow of information processing in manual payroll accounting systems with that in automated systems, and describe how the input and output media used in manual systems are adapted to automated systems.
      3. 2.              Describe how the three basic payroll accounting records lying at the heart of manual systems--payroll register, payroll check and earnings statement, and earnings record--continue to serve as integral records in automated systems.
      4. 3.              Identify the basic characteristics of computers and classify computers according to type, purpose, and size.
      5. 4.              Describe the components of a computer system.
  8. Social Security Benefits
    1.  Old-Age Survivors and Disability Benefits
    2.  Kinds of Social Security Benefits
    3.  Medical Care for Aged and Needy
    4.  Applying for Social Security Benefits
      1. GOALS:  After completing this section, the student will be able to:
      2. 1.              Define terms such as quarter coverage, fully insured, currently insured, average monthly wage, and primary insurance amount, and explain their meaning when calculating the various kinds of benefits.
      3. 2.              Describe the several different kinds of benefits provided under the social security system.
      4. 3.              Describe the procedures that workers should follow when applying for social security benefits.
  9.       Independent Contractors
    1.  Definition of Independent Contractors
    2.  Benefits and Risks from Hiring Independent Contractors
    3.  Basic Rules for Hiring Independent Contractors
    4.  Federal Safe Harbor Laws, and Common Laws
    5.  How California Law Differs From Federal Rules
    6.  Required Government Forms
      1. GOALS:  After completing this section, the student will be able to:
      2. 1.              Describe who are independent contractors
      3. 2.              Contrast and compare employees and independent contractors.
      4. 3.              Describe the benefits and risks from hiring independent contractors.
      5. 4.              Define statutory employees, and define statutory independent contractors.
      6. 5.              State the 20 common law factors used to determine whether a worker is an employee or an independent contractor.
      7. 6.              State the four ways in which California laws differ from federal laws.
      8. 7.              Prepare federal forms 1099 and 1096, and state form 596.
  10.         Course Project:  Books of Account and Payroll Records
    1.               Preparing Payroll Registers; Maintaining Employees' Earnings Records; Journalizing and Posting Payroll, and Payroll Tax Entries; Completing Federal, State, and City Tax Deposit Forms, and Journalizing the Transactions; Preparing Various Quarter-end and Year-end Payroll Tax Forms; Making the Accrual Entry for the Payroll at the End of the Year.

Other Methods
Lecture, class discussion and practice is the primary activity during class hours. Students are required to prepare assigned problems as a basis for class discussions.

Examples of assignments and/or activities (required reading and writing):
-
Representative of the types of assignments/outside-of-class assignments:
1. Read assigned chapters in text. 2. Complete assigned problems and projects using payroll accounting concepts. 3. Demonstrate an understanding of governmental payroll legislation by completing assigned federal and state forms and reports.
Method Of Evaluation
1. Minimum of five non-cumulative two-hour examinations. In each examination, students will demonstrate the application of payroll concepts by solving multiple choice and essay problems. 2. Short fifteen-minute multiple choice quizzes. In each quiz, students will identify/compare/contrast payroll concepts, records, reports, and procedures. 3. Graded payroll accounting practice homework assignments. 4. Graded payroll accounting practice assignments done by computer. 5. Graded comprehensive term project. 6. Final comprehensive examination.

Appropriate Texts and Supplies:
  • Payroll Accounting–A Practical Approach Carse and Slater, Star Publishing Co, 1999.
  • Payroll Accounting, A Student Handbook Carse and Slater, Star Publishing Co, 1999.
Course Fees and Other Materials:
  • No. 2 black pencil,
  • red pencil
  • ruler
  • eraser
  • scantron answer sheets.
  • Optional: Non-photo blue pencil.
  • Portable 10-key adding machine.
  • Hand-held financial calculator.

Created On 10/08/2009