NOTE: In the following examples we assume that the employee's tax rate for Social Security is 4.2% and that the employer's tax rate is 6.2%.

Let's assume our company also has salaried employees who are paid semimonthly on the 15th and the last day of each month. The pay period for these employees is the half-month that ends on payday. There is one salaried employee in the warehouse department with a gross salary of $48,000 per year, or $2,000 per pay period. There are four salaried employees in the Selling & Administrative Department with combined salaries of $9,000 per pay period.

Because the salaried employees are paid on the last day of the month and their pay period ends right on payday, there is no need to accrue for salaries at the end of December (or any other calendar month). The salaried payroll entry for the work period of December 16–31 will be dated December 31 and will look like this:

Salaried Payroll Entry #1: To record the salaries and withholdings for the work period of December 16-31 that will be paid on December 31.

Date	Account Name		Debit	Credit
Dec. 31	Salaries Expense: Delivery Dept		2,000.00
	Salaries Expense: Selling & Admin Dept		9,000.00
		FICA Tax Payable		621.50
		Federal Inc Tax Withholdings Payable		1,800.00
		State Inc Tax Withholdings Payable		400.00
		401(k) Payable		200.00
		Health Ins Expense: Delivery		40.00
		Health Ins. Expense: Selling & Admin		200.00
		United Way Payable		100.00
		Net Payroll Payable		7,638.50

In addition to the salaries recorded above, the company has incurred additional expenses pertaining to the salaried payroll for this semi-monthly period of December 16–31. These expenses must be included in the December financial statements, as shown in the next journal entry:

Salaried Payroll Entry #2: To record additional payroll-related expense for salaried employees for the work period of December 16-31.

Date	Account Name		Debit	Credit
Dec. 31	FICA Expense: Delivery		153.00
	FICA Expense: Selling & Admin		688.50
	401(k) Expense: Delivery		20.00
	401(k) Expense: Selling & Admin		80.00
		FICA Tax Payable		841.50
		401(k) Payable		100.00

Some withholdings and the employer's portion of FICA are remitted on payday; others are not due until a later date. Some withholdings, such as health insurance, were recorded in Salaried Payroll Entry #1 as reductions of the company's expenses. We will assume the following amounts were remitted on payday:

Salaried Payroll Entry #3: To record the distribution of the salaried employees' payroll checks on Dec. 31. (These checks reflect the take-home pay for the salaries earned during the work period of Dec. 16-31).

Date	Account Name		Debit	Credit
Dec. 31	Net Payroll Payable		7,638.50
		Cash		7,638.50

Some withholdings and the employer matching of FICA were remitted on payday; others are not due until a later date. Some withholdings, such as health insurance, were recorded as reductions of the company's expenses in Salaried Payroll Entry #1. We will assume the amounts in Payroll Entry #4 were remitted on payday.

Salaried Payroll Entry #4: To record the remittance of some of the payroll withholdings and company matching pertaining to the salaried employees during the work period of Dec. 15-31.

Date	Account Name		Debit	Credit
Dec. 31	FICA Tax Payable		1,463.00
	Federal Inc Tax Withholdings Payable		1,800.00
	State Inc Tax Withholdings Payable		400.00
	401(k) Payable		300.00
	United Way Payable		100.00
		Cash		4,063.00

Because the material covered here is considered an introduction to this topic, many complexities have been omitted. You should always consult with an accounting professional for assistance with your own specific circumstances.

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