 In this presentation, we will introduce the topic of payroll. Discussing the first question whenever we have a new topic and that is, what is it? Why do we need to learn it? Why learn payroll accounting? There's going to be many different reasons to learn payroll accounting. One, from an accounting standpoint, we'll learn the journal entries related to payroll and those are going to be some of the more complex journal entries there are. They're going to be longer journal entries, more complex journal entries because of the types of laws and regulations that have been put in place including withholding laws and tax laws. So just from an accounting standpoint, it's really a good practice to learn the debits and credits related to payroll because they are journal entries that many people, even accountants, don't understand well. The other reason to know payroll is of course it's a huge expense to the company. Payroll is usually one of the larger expenses that companies need to pay in order to stay in operations and therefore it's really significant from a managerial standpoint and a standpoint of decision making for the company. Payroll has also become more of a specialty in and of itself. It's growing. We'll talk more about that growth, but in that growth, that means there's going to be more complexities and more things that we need to know more laws and regulations related to payroll. There's kind of a relationship between payroll and the human resources in terms of the laws and regulations that need to be kept in place. Payroll deals with that sensitive information with we have social security numbers that we have to deal with. We have other personal data and we have to deal with internal controls related to payroll as well. So applying those accounting concepts as well as concepts overall in a process, a business process related to internal controls including separation of duties for in one case to minimize fraud and minimize theft, theft of both money being liquid asset in terms of the payroll which is a big area where fraud could happen as well as theft of information which of course is a big deal these days as well. We want to make sure that we're safeguarding people's information. In terms of laws and regulations they have increased with payroll and part of that has to do with the withholding laws and that's going to be some of the stuff from an accounting standpoint that will focus in on those withholdings and how to report those withholding. As we discuss these withholdings however we need to point out that they do differ from location to location. So if we're talking about the federal type of laws within the United States they will apply universally to the states but state laws will then differ from state to state which adds a level of complexity. If we're in another country then we're going to have similar laws that could be in place with relation to payroll taxes. We could think of taxes there's nothing really new under the sun in terms of taxes all types of forms that taxes can be applied to take people's money have pretty much been out there. The thing we need to learn now is just what type of taxes being applied what's the rate that's being applied and then how can we do the journal entry and record whatever the law that's in place. So from an accounting standpoint we're going to look at whatever law is in place we're going to look at the type of withholdings that are in place and then the types of journal entries that need to be made. We'll do that mainly from a federal law standpoint in payroll taxes. The state laws for payroll taxes in the United States will oftentimes mimic the federal law in many ways we can apply the same types of principles and in other countries we can apply the same types of principles as well. We just need to learn what type of tax is being applied and how that withholding is taking place and then we can have a similar type of function no matter where we're at no matter what taxes being applied. When considering payroll we can think of it in terms of internal reports and external reports internal reports having to do with those needed for management. We know that payroll is going to be a significant part of the cost of doing business and therefore it's going to be a significant part in decision making in terms of the process for for business. So we want to make those internal reports for management to make those decisions and then of course we have the external reporting which has to do with the IRS taxes for the US would be the Internal Revenue Service and any kind of state taxes that we need to be reporting for. Those would be the the logistical types of things we have to do for the external reporting we have to make sure that we get those reports done we have to make sure that they're in compliance and make sure that we're in compliance with laws and regulations. As mentioned before payroll is an area that really is becoming a specialty in and of itself. Note that the accounting itself is somewhat of a specialty in terms of a business profession or some type of law in general accounting being more complex or as it became more complex needing its own type of specialty. If we talk about payroll we can think of that as a subsection of law or accounting as well especially when we're talking about payroll type of laws which could be more on the human resources side and there's overlap and with regard to recording payroll in terms of the accounting side which becomes more and more complex as the laws increase as well. So we'll note that payroll used to be something that possibly the would be focused on with CPA firms typical CPA firm would be part of their CPA firm process or internal processes within companies oftentimes now is being a more specialized thing which could have a third parties that are often just specializing within payroll in and of itself meaning people are you can become a payroll professional and focus primarily on payroll and the different laws and regulations within payroll and that means it's also true that laws have have increased over time and it's probably likely that they will continue to increase the complexity of laws and as that happens it's likely that payroll will become more of a specialty and could be an area of focus for those that are interested in it.