Topics: Income tax, Taxation, Tax Pages: 2 (553 words) Published: April 7, 2013
Chapter 1-3
Leader: Mangindra, Mansour M. Computer Science Members: San Mateo, Loreene Mr. Arnel Almedora
Tumale, Rosette Ann 8:00-12:30 AM

Chapter 1.0. Introduction
1.1 Background of the Study

A Proposed System

Payroll systems include any and all types of financial statements that involve the payment of an employer’s employees, as well as any statements that relate to the filing of employment taxes. Not only are statements included within these types of systems but the actual functions of printing, delivering or electronic transfer of employees’ funds are also included. Amongst a payroll systems statements are records of the amount of hours an employee has worked, any taxes that have been withheld from an employee’s payroll check, any voluntary tax deductions, and printed copies of checks that have been delivered, and also all records of taxes that have been paid to the government. The formation of these types of systems begins when a company hires its first employee. All employees within the United States must fill out a W4 form so they can be reported to the state they are employed within. This form is what decides how an employee’s federal tax withholdings are calculated, it does by determining the amounts of allowances an employee qualifies for. In most situations, the more dependents an employee has, the lesser amounts of income tax they will be required to pay. One of the most important parts of a payroll system is to withhold and pay taxes from employees’ payroll checks. Four major tax withholdings are required to be withheld from payroll checks: Medicare taxes, state and local income taxes, federal income tax, and Social Security tax. An employer withholding taxes from an employee’s check acts as a trustee for the amounts withheld, this is until the amounts are turned over to the IRS or other government agencies. All businesses are required to hold withheld taxes in a separate bank...
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