Answer to Question #55130 in Economics for paul

Question

You are working as a student assistant for an engineering firm and are paid by the hour. Every two weeks, you turn in a time sheet to your supervisor, and three workdays later, your paycheck is direct deposited into your checking account. List the different entities or objects, logical processes, data flows, and data stores that are involved, starting from the time you submit your time sheet.

Answer 1

The payroll process has changed much over the years, mainly in the manner in which it is processed. Many companies today prefer computer-based systems or outsourcing to process payroll. For a small company, manual processing may still be an option, although there are numerous cost effective ways to run it electronically.
The main steps and processes are:
1) Gather employee wage information.
2) Check to ensure that you have W-4 information for each employee to determine their marital status and withholdings.
3) Calculate employee's gross pay from employment agreement or time sheet.
4) Determine withholding amount for Federal Income Tax.
5) Calculate employee amounts for Social Security Taxes.
6) Calculate employee contributions for Medicare Tax.
7) Determine state and local tax liabilities based on your locality.
8) Deduct additional employee items such as retirement and savings plans, health insurance, charitable contributions or garnishments.
9) Process payroll manually or through your selected system.