Example:
An employer has one employee, Bob Jones, who is paid $1800.00 per month before deductions. Bob is married and claims two exemptions. His net paycheck is $1478.10. The details of his paycheck are:
| Gross pay | $1800.00 |
| -Federal income tax | -145.00 |
| -State tax | -39.20 |
| -FICA tax | -111.60 |
| -Medicare tax | -26.10 |
| Net pay | $1478.10 |
In addition, the employer must match and pay $111.60 for FICA and $26.10 for Medicare. The employer’s total labor expense for this month is $1800.00 + $111.60 + $26.10 = $1937.70.
Categories Needed For Payroll Purposes
| CATEGORY | DESCRIPTION | TAX-REL. | TYPE |
| Payroll | Payroll expense | Yes | Expense category |
| Comp FICA | Employer paid FICA | Yes | Sub-category of payroll |
| Comp MCARE | Employer paid Medicare | Yes | Sub-category of payroll |
| Gross | Gross wages | Yes | Sub-category of payroll |