Payroll and Remittances of Ameritas Life Insurance Corp

Ameritas Life Insurance Corp pays its managers on a monthly basis and salaries of the corporation are recognized as expenses and employees can elect to have their monthly health insurance premiums deducted from their salaries and paid to their health insurance fund on their behalf. The company provides a similar service for the payment of union membership fees. Ameritas Life Insurance Corp also operates a giving scheme under which employees can elect to have donations to nominated charities deducted from their salaries and wages and remitted on their behalf to the selected charities.

Each time the monthly payroll is processed, the cost of the salaries is charged to expense accounts and a liability is accrued for the gross wages payable. Payments of net wages and salaries and remittance of payroll deductions to taxation authorities and other parties reduce the payroll liability account.

The managerial payroll is processed on the second Monday of the month and net salaries are paid to employees on the following Tuesday. During May, managers earned salaries of $2.4 million. After deducting amounts for income tax, union membership fees, contributions to health funds and donations, Ameritas Life Insurance Corp paid its managers a net amount of $1 791 000 during May. All of the deductions are paid to the various external bodies in the following month.

Health insurance deductions and union subscriptions are remitted on the first Friday of the following month. Thus, the deductions for health insurance and union subscriptions for the May payroll are remitted on Friday 7 June. Income tax withheld is remitted on the 20th of the following month. Deductions for donations are paid on the 21st of the following month.

The balance of Ameritas Life Insurance Corp’s Accrued Managerial Payroll account at 1 June 2013 is $609 000, being the deductions from managers’ salaries for income tax, health insurance premiums, union fees and donations for May 2013. These amounts are paid during June 2013.

During June 2013, Ameritas Life Insurance Corp’s managers earned gross salaries of $2.5 million. The managers actually received $1 820 500, being the net wages and salaries after deductions for income tax, health insurance premiums, union fees and donations to charities. In total, $679 500 was deducted from managers’ salaries for June 2013. This amount is a liability at the end of June 2013. The amounts deducted from employees’ salaries during June 2013 are remitted during July 2013.

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