An employer-provided benefit which is so small in value that accounting how to write fundraising scripts that boost donations for it would be administratively impractical or unreasonable. Includes occasional coffee, snacks, doughnuts, flowers, fruit, books, etc. SSN stands for Social Security number, or the code assigned by the Social Security Administration to every American’s social security account. A high-deductible health plan (HDHP) is a health insurance plan that has lower premiums and higher deductibles than a typical health insurance plan. Once you familiarize yourself with these key payroll phrases, you will feel like an expert next time you run your payroll.
- Its aim was to set up a social insurance system in order to reduce destitution among senior citizens and the disabled.
- Upon the resident alien’s admission, the sponsor is required to sign an affidavit agreeing to support the admitted individual.
- Their company pays employees every two weeks for a total of 26 pay periods.
- Additional pay an employee receives for hours worked outside of normal business hours, such as evening or night shifts.
- Payroll deductions taken out of an employee’s wages after applicable payroll taxes are withheld.
Solve the mysteries of terminology with this informative resource. Updated regularly with industry-specific vocabulary and concepts, the Glossary provides easy-to-understand definitions of tax-related terms. The acronym SSA can refer to either the Social Security Act or the Social Security Administration. The Social Security Act was enacted by President Roosevelt in 1935 as part of the New Deal plan. Its aim was to set up a social insurance system in order to reduce destitution among senior citizens and the disabled. The Social Security Administration is the government body set up by the Social Security Act.
Payroll Terms To Learn Before Doing Payroll
An employer’s federal employment tax liabilities that must be paid to the IRS. Includes federal taxes withheld from employees’ wages and the employer’s share of federal employment taxes owed. An employee’s minimum pay, such as their corporate profit definition example fixed salary or regular hourly rate. Base pay does not include additional compensation like overtime, benefits, or bonuses.
For example, a weekly pay period may start on Sunday and end on Saturday. The federal, state, and local taxes an employee is legally required to pay (though payroll withholding). A form of overtime compensation that is paid at twice the employee’s regular hourly rate. An employee’s pay after legally-required deductions (such as payroll taxes) are taken out. A network that enables the electronic transfer of funds, from one bank account to another.
Section 125 plan
From accruals to W-2s and other related payroll abbreviations, this list will provide you with definitions and explanations for the most common payroll terms. Regardless of your level of involvement in payroll, there are certain payroll terms that you should know. Click through for a roundup of words that are commonly used in the payroll industry.
Taxable wage base
These are subtracted from the employee’s gross income to reduce their taxable income. Examples are retirement plan contributions and some health care costs. The annual salary is divided by the number of pay periods in the year to determine gross pay for a pay period.
A Glossary of Payroll Terms
This program has greatly reduced costs for employers while making it easier for individual taxpayers to get their taxes in on time. For employees working on a part-time or hourly basis, the annualized salary is a calculation of the amount any given employee can expect to earn in a single year. Essentially, one week’s earnings are multiplied by the number of weeks worked in a year, or often, one month’s salary is multiplied by 12 to determine the annualized salary. A payroll tax holiday is a deferral of payroll tax collection until a later date at which point those taxes would become due.
The service deducts taxes and other withholdings from earnings and then pays the employees. The amount of federal income tax an employer is required to withhold from an employee’s wages. Federal income tax withholding is based on the employee’s Form W-4 and the IRS’ withholding tax tables. You can determine an employee’s gross pay using their pay rate and your scheduled pay periods. Most businesses will pay employees weekly, every two weeks, or monthly.
Whether you are learning payroll or have been working in payroll for many years, we hope that this Payroll Dictionary will be of service to you. We’ve accrued expenses recognize expenses incurred before paying also included clear examples and related resources so you can understand what all those acronyms and accounting terms mean. Payment made to an employee to cover time away from work due to falling ill. Additional pay an employee receives for hours worked outside of normal business hours, such as evening or night shifts. In terms of state income tax, an employee is a non-resident if they work temporarily in a state that is not their residency and they have intention of making that state their home. A recordkeeping system used to organize, summarize, and store the company’s financial transactions, including payroll.