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Payrolls represent the entire amount paid to all employees over a given accounting period. Because employees are very sensitive to payroll errors or any irregularities, payroll systems should assure accurate and timely payments. Accurate records are also required by federal and state government agencies. Payroll expenditures typically have a significant impact on the income statement of a firm. Manual labor, whether skilled or unskilled usually receives renumeration in the form of wages. Wages are usually stated in terms of an hourly rate, weekly rate, or on a piecework basis.
DETERMINING EMPLOYEE EARNINGS
- Earnings are computed by multiplying hours worked by a hourly rate.
- When hours worked is less than or equal to 40, Earnings = Hours * Rate (E = H * R). 3) When a employee works more than fourty hours and is entitled to time and a half for each hour worked over fourty, the following formula should be used: E = 40R + 1.5(H - 40).
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