Statutory Deductions: Payroll and Taxation in ABC Company

This report, prepared as a memorandum for ABC Company, explains statutory deductions. It defines statutory deductions as those required by law, such as payroll taxes, and differentiates them from voluntary deductions. The report highlights that employers must withhold payroll taxes from employees' income unless exemptions apply. It discusses the methods of statutory deductions, including income taxes, Medicare, and social security taxes, and emphasizes the importance of understanding these deductions for both employers and employees. The report references sources like Congressional Research Service and a patent related to payroll systems. It provides a clear overview of statutory deductions, emphasizing the employer's responsibility and the employee's potential exemptions. The report concludes with a call to action to understand the concepts of statutory deductions and its methods.

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STATUTORY DEDUCTIONS
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Author Note

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Memorandum
To,
The Finance Manager- Rose Wilson
ABC Company
From: Senior Executive
Date: August 21, 2019
Subject: Explanation about Statutory deductions
This memorandum is prepared for explaining about the statutory deductions. The statutory
deductions are considered as those particular deductions, which are required by the law or the
regulation such as payroll taxes are deducted from the wages. These are the deductions,
which are mandated by the law or the statute. The law generally requires the employers for
withholding these deductions from the paychecks of the employee. However, the employee
can opt for the voluntary deduction that includes contribution to the flexible spending account
or the retirement account but they cannot decline for participating in the statutory deductions.
These statutory deductions help in giving guarantee for paying what one owes, whether one
wants to or not. There are different methods by which statutory deductions can be done,
which include Income taxes, Medicare as well as social security taxes. The calculation varies
by the types of deductions. The employers are required for withholding the payroll taxes from
all the income of the employees, until and unless the employees are claims or qualifies for the
exemptions. Moreover, the employee from the withholdings of federal income tax can claim
the exemptions, if the employee was entitled for the refund of the last years federal income
taxes withhold. It is because the employee owes no income taxes and therefore, he or she
expects a refund in the current years.

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Hence, this memorandum would be of great help for understanding about the concepts of
statutory deductions as well as its methods.
Kind Regards,
Senior Executive
ABC Company

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Bibliography
Lowry, S., 2014. Tax Deductions for Individuals: A Summary. Congressional Research
Service.
Sivasubramaniam, S., Oracle International Corp, 2017. Data-driven customizable payroll
element template. U.S. Patent 9,547,875.