0:00:00.399,0:00:03.760

All right. As I said before we're going

0:00:01.920,0:00:04.560

to look at specifically the employee

0:00:03.760,0:00:06.960

side of it

0:00:04.560,0:00:08.720

what do you the employee have to pay on

0:00:06.960,0:00:09.440

your own behalf what comes out of your

0:00:08.720,0:00:10.480

check

0:00:09.440,0:00:12.960

and so we're going to be looking at the

0:00:10.480,0:00:15.120

employee payroll deductions.

0:00:12.960,0:00:16.560

So what is that made up of well these

0:00:15.120,0:00:17.840

are the amounts that's withheld from the

0:00:16.560,0:00:19.520

employee's gross pay

0:00:17.840,0:00:21.199

these are the things that makes your

0:00:19.520,0:00:22.880

what you take home not what you

0:00:21.199,0:00:24.240

earned what you think you're supposed to

0:00:22.880,0:00:24.880

bring home this is what makes your check

0:00:24.240,0:00:25.920

a lot less

0:00:24.880,0:00:28.240

because these are things that you have

0:00:25.920,0:00:29.439

to pay on your own and I look at these

0:00:28.240,0:00:30.880

in a hierarchy I

0:00:29.439,0:00:32.559

the big thing with these is there are

0:00:30.880,0:00:34.000

quite a few of these and I want to make

0:00:32.559,0:00:35.120

sure I don't forget these,

0:00:34.000,0:00:37.360

so if I could look at them in a

0:00:35.120,0:00:38.960

hierarchy to say. Okay. Who gets paid

0:00:37.360,0:00:40.800

first who gets paid second i'm less

0:00:38.960,0:00:42.800

likely to forget these

0:00:40.800,0:00:44.879

so who gets paid first when it comes to

0:00:42.800,0:00:45.360

your check well uncle sam gets paid

0:00:44.879,0:00:46.800

first,

0:00:45.360,0:00:48.320

so let's start with the federal and the

0:00:46.800,0:00:49.120

state income taxes that's where I always

0:00:48.320,0:00:51.120

start.

0:00:49.120,0:00:52.800

So federal state income taxes this is

0:00:51.120,0:00:55.120

required withholdings uh that are

0:00:52.800,0:00:56.559

determined from the irs tax tables

0:00:55.120,0:00:58.320

if you've ever seen the tax tables

0:00:56.559,0:00:59.120

they can be a little bit daunting most

0:00:58.320,0:01:00.559

of the time

0:00:59.120,0:01:02.320

you're probably not going to have to use

0:01:00.559,0:01:03.760

those in this class intro to financial

0:01:02.320,0:01:05.280

accounting class because it's not a tax

0:01:03.760,0:01:06.159

class

0:01:05.280,0:01:07.680

most of the time they're just going to

0:01:06.159,0:01:09.200

give you kind of a percentage or just

0:01:07.680,0:01:11.439

the outright amount

0:01:09.200,0:01:12.960

but federal you're going to have to and

0:01:11.439,0:01:14.000

if you're in a state with income tax and

0:01:12.960,0:01:14.960

you're going to have to do state income

0:01:14.000,0:01:16.560

taxes as well

0:01:14.960,0:01:18.000

there are a few states out there that do

0:01:16.560,0:01:18.880

not have state income taxes florida

0:01:18.000,0:01:20.720

being one of them

0:01:18.880,0:01:22.479

um so if you're in that state then you

0:01:20.720,0:01:24.080

don't have to worry about that,

0:01:22.479,0:01:26.080

But the first one is the state income

0:01:24.080,0:01:27.439

tax our federal and state income tax,

0:01:26.080,0:01:29.439

this is based on the employer's annual

0:01:27.439,0:01:31.360

earnings rate and the allowance withheld

0:01:29.439,0:01:32.960

allowance amount withheld which you

0:01:31.360,0:01:35.200

do on your w force

0:01:32.960,0:01:37.280

you fill out that on your w force.

0:01:35.200,0:01:38.960

So first person gets paid uncle sam

0:01:37.280,0:01:40.400

who's the second person gets paid our

0:01:38.960,0:01:42.960

second entity that gets paid

0:01:40.400,0:01:44.399

uncle sam and so now we're gonna have to

0:01:42.960,0:01:46.640

pay for our social security and our

0:01:44.399,0:01:49.439

medicare, so that's the ficas,

0:01:46.640,0:01:51.280

so fica taxes uh or federally uh federal

0:01:49.439,0:01:51.920

insurance contribution act is where fica

0:01:51.280,0:01:53.200

came from,

0:01:51.920,0:01:54.399

but it's made up of two pieces you've

0:01:53.200,0:01:55.439

got social security and you've got

0:01:54.399,0:01:57.040

medicare.

0:01:55.439,0:02:00.000

So social security taxes there's one

0:01:57.040,0:02:01.360

part of it, this covers all retirement

0:02:00.000,0:02:04.880

disability and survivorship

0:02:01.360,0:02:06.240

uh side of it and for the year 2021

0:02:04.880,0:02:07.840

and this is important to understand

0:02:06.240,0:02:09.200

because this part does change 

0:02:07.840,0:02:10.399

depending on what year you're in

0:02:09.200,0:02:13.200

but for the current year we're doing

0:02:10.399,0:02:15.440

this in 2021 social security tax is 6.2

0:02:13.200,0:02:18.560

percent of the first 148

0:02:15.440,0:02:20.480

or excuse me 142,800 earned by the

0:02:18.560,0:02:22.640

employer in a calendar year.

0:02:20.480,0:02:24.480

Typically the 6.2 doesn't change it

0:02:22.640,0:02:27.360

could but typically it doesn't

0:02:24.480,0:02:30.480

what does change is the cap you only

0:02:27.360,0:02:32.959

pay 6.2 percent of the first 142,800 

0:02:30.480,0:02:34.000

if you make more than 100,240 or

0:02:32.959,0:02:35.840

142,800 

0:02:34.000,0:02:37.599

in a year you're only going to pay

0:02:35.840,0:02:40.000

on the first 142.8

0:02:37.599,0:02:41.280

if you make less than 142.8 then you're

0:02:40.000,0:02:43.360

going to pay 6.2

0:02:41.280,0:02:45.360

on everything that you make, but again

0:02:43.360,0:02:46.560

you want to keep up with the 142.8

0:02:45.360,0:02:47.840

because again that does change every

0:02:46.560,0:02:50.959

year it's been changing every year

0:02:47.840,0:02:52.800

since forever as long as I know

0:02:50.959,0:02:54.160

that's social security. Now let's look at the

0:02:52.800,0:02:56.080

medicare side

0:02:54.160,0:02:57.200

medicare taxes this covers medical

0:02:56.080,0:03:00.080

benefits

0:02:57.200,0:03:02.159

and so for again for the year 2021

0:03:00.080,0:03:04.319

medicare tax is 1.45

0:03:02.159,0:03:06.560

for the full amount earned by an

0:03:04.319,0:03:08.159

employee uh in a calendar year, there is

0:03:06.560,0:03:09.120

no cap to this if you make a hundred

0:03:08.159,0:03:11.680

bucks you're going to pay

0:03:09.120,0:03:13.440

1.45 if you make a million bucks you're

0:03:11.680,0:03:15.840

going to pay 0.15

0:03:13.440,0:03:16.480

actually if you make over I believe 

0:03:15.840,0:03:19.599

200,00

0:03:16.480,0:03:22.159

then that point uh 1.45 goes

0:03:19.599,0:03:23.040

up to 2.3 I believe just double checking

0:03:22.159,0:03:26.319

on that because

0:03:23.040,0:03:29.200

uh it changes each year, but for the

0:03:26.319,0:03:31.680

basic just understand it is 1.45

0:03:29.200,0:03:34.080

and that is the medicare. Now who gets

0:03:31.680,0:03:36.879

paid after the fica taxes so we've done

0:03:34.080,0:03:38.319

federal and state uh income tax, we've

0:03:36.879,0:03:40.000

done both the ficas,

0:03:38.319,0:03:41.680

what's left is going to be your

0:03:40.000,0:03:43.360

voluntary withholdings, that's if you

0:03:41.680,0:03:45.599

choose to take something out to pay for

0:03:43.360,0:03:47.680

or to save up with or whatnot.

0:03:45.599,0:03:49.040

So this is per employee request

0:03:47.680,0:03:52.239

contracts unions

0:03:49.040,0:03:52.879

and other agreements, so if you take

0:03:52.239,0:03:55.280

something out of

0:03:52.879,0:03:56.560

if you pay towards your own 401k that's

0:03:55.280,0:03:58.319

what would come out of this,

0:03:56.560,0:04:00.000

if you paid something for union dues

0:03:58.319,0:04:01.680

that's what would come out of this, if

0:04:00.000,0:04:02.720

you want to do charitable contributions

0:04:01.680,0:04:04.319

that's what would come out of this,

0:04:02.720,0:04:06.000

because these are voluntary things that

0:04:04.319,0:04:08.319

you choose to take out of your check

0:04:06.000,0:04:10.480

before you get your check to take home.

0:04:08.319,0:04:12.799

So those are all of the employee

0:04:10.480,0:04:14.400

payroll deductions in the next video i'm

0:04:12.799,0:04:16.160

going to show you how to account for all

0:04:14.400,0:04:19.840

this in an example.

0:04:16.160,0:04:19.840

Thank you.