TaxesAccountingTkelly

Payroll Taxes

Dr. Kelly

Accounting 1

Poll

New Jersey has one of the highest overall the tax burdens in the USA. Do you think it is worth high taxes to live in NJ?

• Yes

• No

• Not sure

NJ Payroll Tax Rates

• SUI (Unemployment): .425%

• TDI (Temporary Disability): .26% - 400% Increase

• FLI (Family leave): .16% - Ten fold increase!

• Income: variable (progressive)

Compute tax liability for Silvia, who earns $45,000 in 2020 in Paterson

• SUI = .425%

• TDI =.26%

• FLI =. 16%

• Total =

• Watch your decimal places!!!!!

Tax Solution

• .425%

• + .26%

• + .16%

• = .845% x $45,000 = $380.25

Types of state Income Taxes

Progressive

Flat

None

New Jersey State Income Tax Rates

New Jersey Income Bracket, Rate and Estimated Taxes Due

Tax Rate: 1.4% Income Range: $0 - $20,000.

Tax Rate: 1.75% Income Range : $20,000 - $35,000.

Tax Rate: 3.5% Income Range: $35,000 - $40,000.

Tax Rate: 5.525% Income Range: $40,000 - $75,000.

Tax Rate: 6.37% Income Range: $75,000 - $500,000. .

Tax Rate: 10.75$ Income above $500,000.

Poll

Assume you make $100,000 per year. What % of your income are you willing to contribute in taxes?

• 1 - 20%

• 21 - 40%

• 41% - 60%

• 61% and more.

Key points from video

• Employee Pay Stub

• Payroll Register

• Form W-2

• Form W-3

Tax Withholding Journal Entry Examples:

• Unemployment Tax: dr. Tax Expense/cr. Liability Account

• Income Taxes: dr. Wage & Salary Exp/cr. Liability Account

• Payroll Deductions = Current Liabilities (payable within 12 mos.)

Journal Entry Example

We'll practice these tomorrow

Poll

Based on what you learned today, are the journal entries for payroll______________other journal entries we have learned.

• more difficult than

• about the same process as

• easier than

Exit Ticket - Please post in Classwork tab

1. What is the name of the record/document that contains all of the payroll information?  

2.  How is your personal payroll information reported to you?