Topic 1 – What is included in payroll

In addition to salaries, wages and benefits mentioned previously, payroll processing also accounts for any payroll deductions the employee has authorized. This could include supplementary insurance, retirement plan contributions, charitable donations, and other pre-tax deductions. Taxing authorities also require certain payroll tax withholdings including:

• Federal income tax withholding
• State income tax withholding (in applicable states)
• Social Security tax (FICA)
• Medicare tax
• Federal and state unemployment insurance taxes

Pay stubs or earnings statements must be issued accurately detailing all earnings, deductions and net pay for each pay period.