PAYROLL

Employee Payroll Deduction

Employee Payroll Deduction

Generally speaking, employers report payroll by calculating gross pay and various payroll deductions to arrive at net pay. While this seems simple enough to understand, calculating various payroll deductions requires that the payroll accountant be detail-oriented and work with extreme accuracy.

Basic Formula for Net Pay:

Employee's gross pay (pay rate times number of hours worked)

minus Statutory payroll tax deductions

minus Voluntary payroll deductions

equals Net Pay.

Statutory Payroll Tax Deductions

Payroll taxes must be withheld from an employee's paycheck. This is required by law(Diana, 2006). Employers must hand these withholdings over to various tax agencies. ...