Wayland Custom Woodworking is a firm that manufactures custom cabinets and woodwork for business and residential customers. Students will have the opportunity to establish payroll records and to complete a month of payroll information for Wayland. Wayland Custom Woodworking is located at 1716 Nichol Street, Logan, Utah, 84321, phone number 435-555-9877. The owner is Mark Wayland. Waylands EIN is 91-7444533, and the Utah Employer Account Number is 999-9290-1. Wayland has determined it will pay their employees on a semimonthly basis. Federal income tax should be computed using the percentage method.
For Part 1 of this project, you will complete payroll for the entire fourth quarter (Q4) of 2017, which consists of the final six pay periods of the year. Once payroll has been completed for the fourth quarter, you will then file the annual tax forms for Wayland as well as prepare each employee's Form W-2 in Part 2.
The SUTA (UI) rate for Wayland Custom Woodworking is 2.6 percent on the first $33,100. The state withholding rate is 5.0 percent for all income levels and marital statuses, a table has been included to assist with calculations.
Rounding can create a challenge. For this project, the hourly rate for the individuals should be rounded to five decimal places. So take their salary and divide by 2,080 (52 weeks at 40 hours per week) for all full time employees, both exempt and nonexempt. For nonexempt employees, such as Stevon Varden, Vardens salary is $42,000 and is a nonexempt employee, so the calculation will be $42,000/2,080, which would give you $20.19231 per hour, and use this to compute the employees gross pay based on the number of hours worked. When a nonexempt employee has worked overtime hours for a given pay period, take their regular hourly rate and multiply it by 1.5, round the result to 5 decimal places, and multiply the new rate by their number of overtime hours.
For exempt employees', such as Anthony Chinson, an hourly rate rounded to five decimal places should be determined using the same method shown above, but gross pay should be determined by taking the exempt employees yearly salary and dividing it by 24, which is the number of payroll periods with a semimonthly frequency. For example, Chinsons salary is $24,000 and is a full time employee. Chinsons hourly rate is $11.53846 (determined by taking $24,000/2,080), but as he is an exempt employee, the calculation for his gross pay will be $24,000/24, which would give you $1,000. For pay periods that include paid holidays, ensure to distribute an exempt employee's regular pay accordingly to holiday pay based on the number of hours that consist of the holidays for that period.
After the gross pay has been calculated, round the result to only two decimal points prior to calculating taxes or other withholdings.
Employees are paid for the following holidays occurring during the final quarter:
Thanksgiving day and the day after, Thursday and Friday November 23-24
Christmas, which is a Monday. Employees receive holiday pay for Monday, December 25, and Tuesday, December 26.
For the completion of this project, refer to the tax-related information in the table below. For federal withholding calculations, use the percentage method tables in Appendix C, which is provided below. For Utah state withholding calculations, use the Utah Schedule 3 tax tables linked below (ensure to use the appropriate Utah table based on each employee's marital status). Both 401(k) and insurance are pretax for federal income tax and Utah income tax.
| | |
| Federal Withholding Allowance (less 401(k), Section 125) | $168.80 per allowance claimed |
| Federal Unemployment Rate (employer only) (less Section 125) | 0.6% on the first $7,000 of wages |
| Semimonthly Federal Percentage Method Tax Table | Appendix C Page 393 Table #3 |
| State Unemployment Rate (employer only) (less Section 125) | 2.6% on the first $33,100 of wages |
| State Withholding Rate (less 401(k), Section 125) | See Utah Schedule 3, Table 1 or use the Excel Version of Schedule 3 |
| |
October 1:
Wayland Custom Woodworking (WCW) pays its employees according to their job classification. The following employees comprise Waylands staff:
| Employee Number | Name and Address | Payroll information |
| 00-Chins | Anthony Chinson | Married, 1 Withholding allowance |
| 530 Sylvann Avenue | Exempt |
| Logan, UT 84321 | $24,000/year + commission |
| 435-555-1212 | Start Date: 10/1/2017 |
| Job title: Account Executive | SSN: 511-22-3333 |
| | | |
| 00-Wayla | Mark Wayland | Married, 5 withholding allowances |
| 1570 Lovett Street | Exempt |
| Logan, UT 84321 | $75,000/year |
| 435-555-1110 | Start Date: 10/1/2017 |
| Job title: President/Owner | SSN: 505-33-1775 |
| | |
| 01-Peppi | Sylvia Peppinico | Married, 7 withholding allowances |
| 291 Antioch Road | Exempt |
| Logan, UT 84321 | $43,500/year |
| 435-555-2244 | Start Date: 10/1/2017 |
| Job title: Craftsman | SSN: 047-55-9951 |
| | |
| 01-Varde | Stevon Varden | Married, 2 withholding allowances |
| 333 Justin Drive | Nonexempt |
| Logan, UT 84321 | $42,000/year |
| 435-555-9981 | Start Date: 10/1/2017 |
| Job title: Craftsman | SSN: 022-66-1131 |
| | |
| 02-Hisso | Leonard Hissop | Single, 4 withholding allowances |
| 531 5th Street | Nonexempt |
| Logan, UT 84321 | $49,500/year |
| 435-555-5858 | Start Date: 10/1/2017 |
| Job title: Purchasing/Shipping | SSN: 311-22-6698 |
| | |
| 00-Succe | Student Success | Single, 1 withholding allowance |
| 1650 South Street | Nonexempt |
| Logan, UT 84321 | $36,000/year |
| 435-556-1211 | Start Date: 10/1/2017 |
| Job title: Accounting Clerk | SSN: 555-55-5555 |
| | |
The departments are as follows:
Department 00: Sales and Administration
Department 01: Factory workers
Department 02: Delivery and Customer service
You have been hired as of October 1 as the new accounting clerk. Your employee number is 00-SUCCE. Your name is Student Success. Your address is 1650 South Street, Logan, UT 84321. Your phone number is 435-556-1211, you were born July 16, 1985, your Utah driver's license number is 887743 expiring in 7/16/2019, and your Social Security number is 555-55-5555. You are considered a nonexempt employee, have one withholding allowance, and paid a rate of $36,000 per year.
The balance sheet for WCW as of September 30, 2017, is as follows:
| Wayland Custom Woodworking Balance Sheet September 30, 2017 | |
| Assets | | Liabilities & Equity | |
| Cash | $ | 1,125,000.00 | | Accounts Payable | $ | 112,490.00 | |
| Supplies | | 27,240.00 | | Salaries and Wages Payable | | | |
| Office Equipment | | 87,250.00 | | Federal Unemployment Tax Payable | | | |
| Inventory | | 123,000.00 | | Social Security Tax Payable | | | |
| Vehicle | | 25,000.00 | | Medicare Tax Payable | | | |
| Accumulated Depreciation, Vehicle | | | | State Unemployment Tax Payable | | | |
| Building | | 164,000.00 | | Employee Federal Income Tax Payable | | | |
| Accumulated Depreciation, Building | | | | Employee State Income Tax Payable | | | |
| Land | | 35,750.00 | | 401(k) Contributions Payable | | | |
| Total Assets | | 1,587,240.00 | | Employee Medical Premiums Payable | | | |
| | | | | Notes Payable | | 224,750.00 | |
| | | | | Utilities Payable | | | |
| | | | | Total Liabilities | | 337,240.00 | |
| | | | | Owners' Equity | | 1,250,000.00 | |
| | | | | Retained Earnings | | - | |
| | | | | Total Equity | | 1,250,000.00 | |
| | | | | Total Liabilities and Equity | | 1,587,240.00 | |
| | |
Voluntary deductions for each employee are as follows:
| Name | Deduction |
| Chinson | Insurance: $50/paycheck |
| 401(k): 3% of gross pay |
| Wayland | Insurance: $75/paycheck |
| 401(k): 6% of gross pay |
| Peppinico | Insurance: $75/paycheck |
| 401(k): $50 per paycheck |
| Varden | Insurance: $50/paycheck |
| 401(k): 4% of gross pay |
| Hissop | Insurance: $75/paycheck |
| 401(k): 3% of gross pay |
| Student | Insurance: $50/paycheck |
| 401(k): 3% of gross pay |
| 1. Complete the W-4 and, using the given information, complete the I-9 form to start your employee file. Complete it as if you are single with one withholding, you contribute 3 percent to a 401(k), and health insurance is $50 per pay period. The following file provides the lists of acceptable documents for Form I-9. Form W4 I9 Page 1 I9 Page 2 W4 Instructions Complete the W-4 for Student Success. Complete the W-4 for Student Success. | | | | | Form W-4 (2017) | | | | | | | | Personal Allowances Worksheet (Keep for your records.) | | A Enter "1" for yourself if no one else can claim you as a dependent | A | | | B Enter "1" if: | You are single and have only one job; or | | | | You are married, have only one job, and your spouse does not work; or | B | | | Your wages from a second job or your spouse's wages (or the total of both) are $1,500 or less. | | | | C Enter "1" for your spouse. But, you may choose to enter "-0-" if you are married and have either a working spouse or more than one job. (Entering "-0-" may help you avoid having too little tax withheld.) | | | | C | | | D Enter number of dependents (other than your spouse or yourself) you will claim on your tax return | D | | | E Enter "1" if you will file as head of household on your tax return (see conditions under Head of household above) | E | | | F Enter "1" if you have at least $2,000 of child or dependent care expenses for which you plan to claim a credit | F | | | (Note. Do not include child support payments. See Pub. 503, Child and Dependent Care Expenses, for details.) | | | | G Child Tax Credit (including additional child tax credit). See Pub. 972, Child Tax Credit, for more information. | | | | If your total income will be less than $70,000 ($100,000 if married), enter "2" for each eligible child; then less "1" if you have two to four eligible children or less "2" if you have five or more eligible children. | | | | | | | If your total income will be between $70,000 and $84,000 ($100,000 and $119,000 if married), enter "1" for each eligible child | G | | | H Add lines A through G and enter total here. (Note. This may be different from the number of exemptions you claim on your tax return.) | H | 0 | | For accuracy, complete all worksheets that apply. | If you plan to itemize or claim adjustments to income and want to reduce your withholding, see the Deductions and Adjustments worksheet on page 2. | | If you are single and have more than one job or are married and you and your spouse both work and the combined earnings from all jobs exceed $50,000 ($20,000 if married), see the Two-Earners/Multiple Jobs Worksheet on page 2 to avoid having too little tax withheld. | | If neither of the above situations applies, stop here and enter the number from line H on line 5 of Form W-4 below. | | .................................................. Separate here and give Form W-4 to your employer. Keep the top part for your records. .................................................. | | Form W-4 | Employee's Withholding Allowance Certificate | OMB No. 1545-0074 | | Department of the Treasury - Internal Revenue Service | Whether you are entitled to claim a certain number of allowances or exemption from withholding is subject to review by the IRS. Your employer may be required to send a copy of this form to the IRS. | 2017 | | 1 Your first name and middle initial | Last name | 2 Your social security number | | Student | Success | 555-55-5555 | | Home address (number and street or rural route) | 3 Singleradio button checked1 of 3 | Marriedradio button unchecked2 of 3 | Married, but withhold at higher Single rate.radio button unchecked3 of 3 | | 1650 South Street | Note. If married, but legally separated, or spouse is a nonresident alien, check the "single" box. | | City or town, state, and ZIP code | 4 If your last name differs from that shown on your social security card, check here. You must call 1-800-772-1213 for a replacement card.checkbox unchecked1 of 8 | | Logan, UT 84321 | | 5 Total number of allowances you are claiming (from line H above or from the applicable worksheet on page 2) | 5 | 0 | | 6 Additional amount, if any, you want withheld from each paycheck | 6 | | | 7 I claim exemption from withholding for 2017, and I certify that I meet both of the following conditions for exemption. | | | | Last year I had a right to a refund of all federal income tax withheld because I had no tax liability, and | | | This year I expect a refund of all federal income tax withheld because I expect to have no tax liability. | | | If you meet both conditions, write "Exempt" here ........... | 7 | | | Under penalties of perjury, I declare that I have examined this certificate and, to the best of my knowledge and belief, it is true, correct, and complete. | | Employee's signature | | | | | | | | (This form is not valid unless you sign it.) | | Date | | | 8 Employer's name and address (Employer: Complete lines 8 and 10 only if sending to the IRS.) | 9 Office code | 10 Employer identification number (EIN) | | | | | | For Privacy Act and Paperwork Reduction Act Notice, see page 2. | Cat. No. 10220Q | Form W-4 (2017 | | Complete Page 1 of Form I-9 for Student Success. | | | | | | | Employment Eligibility Verification | USCIS | | | | | | | | Form I-9 | | | | Department of Homeland Security | OMB No. 1615-0047 | | | | U.S. Citizenship and Immigration Services | Expires 08/31/2019 | | | | | | START HERE. | Read instructions carefully before completing this form. The instructions must be available during completion of this form. | | ANTI-DISCRIMINATION NOTICE: | It is illegal to discriminate against work-authorized individuals. Employers CANNOT specify which document(s) they will | | accept from an employee. The refusal to hire an individual because the documentation presented has a future expiration date may also constitute illegal discrimination. | | Section 1. Employee Information and Attestation | | (Employees must complete and sign Section 1 of Form I-9 no later than the first day of employment, but not before accepting a job offer.) | | Last name (Family Name) | First Name (Given Name) | Middle Initial | Other Names Used (if any) | | | | | | | Address (Street Number and Name) | Apt. Number | City or Town | State | Zip Code | | | | | | | | Date of Birth (mm/dd/yyyy) | U.S. Social Security Number | E-mail Address | Telephone Number | | | | | | | I am aware that federal law provides for imprisonment and/or fines for false statements or use of false documents in connection with the completion of this form. | | I attest, under penalty of perjury, that I am (check one of the following): | | A citizen of the United Statescheckbox unchecked1 of 24 | | A noncitizen national of the United States (see instructions)checkbox unchecked9 of 24 | | A lawful permanent resident (Alien Registration Number/USCIS Number):checkbox unchecked17 of 24 | | | | | An alien authorized to work until (expiration date, if applicable, mm/dd/yyyy).checkbox unchecked21 of 24 | | Some aliens may write "N/A" in this field. (See instructions) | | | For aliens authorized to work, provide your Alien Registration Number/USCIS Number OR Form I-94 Admission Number: | | | 1. Alien Registration Number/USCIS Number: | | | | | | | OR | | | | QR Code - Section 1 | | | 2. Form I-94 Admission Number: | | Do Not Write in This Space | | | | | | | | | | | | If you obtained your admission number from CBP in connection with your arrival in the United States, | | | | | include the following: | | | | | | | | | | | | | | | | | Foreign Passport Number: | | | | | | Country of Issuance: | | | | | | Some aliens may write "N/A" on the Foreign Passport Number and Country of Issuance fields. (See instructions) | | | | | | | | | | | Signature of Employee: | Date (mm/dd/yyyy): | | | | | | | | | | | Preparer and/or Translator Certification | (To be completed and signed if Section 1 is prepared by a person other than the employee.) | | I attest, under penalty of perjury, that I have assisted in the completion of this form and that to the best of my knowledge the information is true and correct. | | Signature of Preparer or Translator: | Date (mm/dd/yyyy): | | | | | | | | | | | Last Name (Family Name) | First Name (Given Name) | | | | | | | | | | | Address (Street Number and Name) | City or Town | State | Zip Code | | | | | | | | | | | | | | | | | | | | | Stop | Employer Completes Next Page | Stop | | Complete Page 2 of Form I-9 for Student Success. | | | | | Section 2. Employer or Authorized Representative Review and Verification | | (Employers or their authorized representative must complete and sign Section 2 within 3 business days of the employee's first day of employment. You must physically examine one document from List A OR examine a combination of one document from List B and one document from List C as listed on the "Lists of Acceptable Documents" on the next page of this form. For each document you review, record the following information: document title, issuing authority, document number, and expiration date, if any.) | | | | Employee Last Name, First Name and Middle Initial from Section 1: | | | List A | OR | List B | AND | List C | | Identity and Employment Authorization | | Identity | | Employment Authorization | | Document Title: | | Document Title: | Document Title: | | | | | | Issuing Authority: | Issuing Authority: | Issuing Authority: | | | | | | Document Number: | Document Number: | Document Number: | | | | | | Expiration Date (if any) (mm/dd/yyyy): | Expiration Date (if any) (mm/dd/yyyy): | Expiration Date (if any) (mm/dd/yyyy): | | | | | | | | | Document Title: | | | | | | | | | | | | Issuing Authority: | | | | | | | Additional Information | QR Code - Sections 2 & 3 | | Document Number: | | | Do Not Write in This Space | | | | | | | | Expiration Date (if any) (mm/dd/yyyy): | | | | | | | | | | | | | | | | | Document Title: | | | | | | | | | | | Issuing Authority: | | | | | | | | | | | | Document Number: | | | | | | | | | | | | Expiration Date (if any) (mm/dd/yyyy): | | | | | | | | | | | | Certification | | I attest, under penalty of perjury, that (1) I have examined the document(s) presented by the above-named employee, (2) the above-listed document(s) appear to be genuine and to relate to the employee named, and (3) to the best of my knowledge the employee is authorized to work in the United States. | | | | | | | | | | | The employee's first day of employment (mm/dd/yyyy): | (See instructions for exemptions.) | | Signature of Employer or Authorized Representative | Date (mm/dd/yyyy) | Title of Employer or Authorized Representative | | | | | | Last Name (Family Name) | First Name (Given Name) | Employer's Business or Organization Name | | | | | | Employer's Business or Organization Address (Street Number and Name) | City or Town | State | Zip Code | | | | | | | | | Section 3. Reverification and Rehires (To be completed and signed by employer or authorized representative.) | | A. New Name (if applicable) Last Name (Family Name) First Name (Given Name) | Middle Initial | B. Date of Rehire (if applicable) (mm/dd/yyyy) | | | | | | | | | | | | | | | C. If employee's previous grant of employment authorization has expired, provide the information for the document from List A or List C the employee presented that establishes current employment authorization in the space provided below. | | Document Title: | Document Number: | Expiration Date (if any)(mm/dd/yyyy): | | | | | | I attest, under penalty of perjury, that to the best of my knowledge, this employee is authorized to work in the United States, and if the employee presented document(s), the document(s) I have examined appear to be genuine and to relate to the individual. | | Signature of Employer or Authorized Representative: | Date (mm/dd/yyyy): | Print Name of Employer or Authorized Representative: | | | | | | | | | | | | | | |
