Welcome to Scribd. Sign in or start your free trial to enjoy unlimited e-books, audiobooks & documents.Find out more
Download
Standard view
Full view
of .
Look up keyword
Like this
3Activity
0 of .
Results for:
No results containing your search query
P. 1
Unit VI Salaries Edited

Unit VI Salaries Edited

Ratings:

5.0

(1)
|Views: 482|Likes:
Published by bum_24
accounting lectures. enjoy!:)
accounting lectures. enjoy!:)

More info:

Published by: bum_24 on Nov 22, 2008
Copyright:Attribution Non-commercial

Availability:

Read on Scribd mobile: iPhone, iPad and Android.
download as DOC, PDF, TXT or read online from Scribd
See more
See less

09/18/2010

pdf

text

original

 
Unit VI – Part 1Accounting for Salaries
Background
Every business that has employees is required to keep some kind of record of wages and salaries paid. A businessmust have correct information about the reported earnings of its employees in order to make proper payment to themand in order to debit the amounts they have earned to the correct accounts. All businesses are required by law tokeep earnings records for each employee and must be able to prove the correctness of the various requiredgovernment deductions and contributions (e.g., taxes, SSS, Philhealth, etc.), which employers and employees pay.Employees want to be sure that the amounts they receive on payday are the amounts to which they are rightfullyentitled. The summary of the employees’ salary is prepared in a report called
 payroll register 
. This is accomplisheddepending on the payroll period being followed by the company either in a weekly, semi-monthly or monthly basis.
Recording Salary Expenses
Overview
All business entities normally hire employees to perform its various operations. Salaries of these employees must be properly computed and paid at a specified time (e.g. weekly, bi-monthly, monthly).In this section, readers will be introduced on how to journalize transactions affecting payment of employees’ salarieswith corresponding deductions as required by law or due to some other reasons such as loans made by employeesfrom the company.
Social Security System
Under PD No. 24, “no person shall be employed unless he has a social security number.” It is therefore arequirement that all employees in the private sector be members of the Social Security System (SSS).The system provides benefits and services to its members which include the following: salary loans,educational loans, housing loans, sickness and death benefits, unemployment benefits, disability benefits, pension benefits and reimbursement of funeral expenses for deceased members. In consideration for allthese benefits, the employee is required to make a monthly contribution in accordance with a contributiontable provided by the SSS. This contribution of the employee is deducted from his salary. Thecorresponding contribution of the employer is an
operating expense
, i.e.,
SSS Contribution Expense
.
Philhealth
The Philippine Medical Care Commission (PMCC) was established to provide hospitalization and other medical benefits to its members and their dependents. Contributions are made according to a given table.Similar to SSS, the contribution is shared between the employee and his employer. The contribution of the employee is deducted from his salary. The contribution of the employer is an
operating expense
, i.e.,
 Philhealth Contribution Expense
.
Pag-ibig Fund
The Pag-ibig Fund is a provident savings and housing fund for employees established under P.D. No.1752. It aims to generate mass savings geared towards financing homes for its members. All privateemployees who are members of the SSS and their employers are covered by the fund compulsorily. Theemployer and its employees in accordance with the pag-ibig contribution table make contributions to thePag-ibig Fund.
Witholding Income Tax
Under the Bureau of Internal Revenue regulations, every employer is required to deduct and withholdincome tax from the salary of its employees in accordance with a withholding tax table. The amount of income tax to be withheld from the employees will depend on whether the employee is single, married, a

Activity (3)

You've already reviewed this. Edit your review.
1 hundred reads
1 thousand reads
Karen Ng Ang liked this

You're Reading a Free Preview

Download
scribd
/*********** DO NOT ALTER ANYTHING BELOW THIS LINE ! ************/ var s_code=s.t();if(s_code)document.write(s_code)//-->