19 Common Payroll Terms To Know

These amounts would be subtracted from the gross pay (total compensation) before the calculations of each applicable tax are completed. Payroll accounting and payroll processing is a complicated but extremely critical part of a company. Many companies choose to outsource their payroll accounting to outside business accountants. As such, there is a big opportunity to get into the business of offering payroll outsourcing to companies in what are the different types of accounting systems options explained your area. To get going as quickly and successfully as possible, you may want to invest in a payroll accounting franchise such as Padgett Franchises. By becoming a franchisee you get the necessary training and community to help you in your business as well as instant name recognition.

Inclusion of such hyperlinks on TriNet.com does not necessarily imply any endorsement of the material on such websites or association with their operators. Employers must usually file quarterly wage reports with the state for SUTA tax purposes. “The amount an employee would have to pay a third party in an arm’s-length transaction to buy or lease the benefit.” Defined by the IRS. If you’re a business owner scheduling shift work, it’s important you know all the different types of work shifts and how best to schedule your workers.

The employment tax reports an employer must file with the local taxation agency. Applies to employers who must withhold local taxes from employees’ wages and/or pay their own share of local employment taxes. Taxable wages are the earnings from which an employer must withhold taxes. The definition of taxable wages depends on the tax you’re talking about.

Annualized Salary

Non-exempt employees must be paid the minimum wage and are entitled to overtime pay for every hour worked above the standard workweek. Under normal circumstances, payroll processing takes place at the predetermined end of a pay period. However, if an employee is hired, promoted or terminated, that payroll may begin or end in the middle of the usual pay period. For salaried employees, the partial pay rate can be calculated by dividing the annual salary by the number of work days in one year.

Old-Age, Survivors, and Disability Insurance (OASDI)

1. The amount of federal income tax an employer is required to withhold from an employee’s wages.
2. Front pay makes up for lost compensation suffered by the victim of discrimination.
3. It also adds a new language of sorts, given all the payroll acronyms.
4. Subtract amounts from an employee’s wages for taxes, garnishments or levies, and other deductions (like medical insurance or union dues).
5. Time sheet is a system or document outlining the hours worked by every employee.

Includes missed payments, such as unpaid salary, regular hours, overtime, or commissions. The legally-required amount an employer must withhold from an employee’s wages to satisfy a spousal support order from the court. Fringe benefits, also called imputed income, are the perks that businesses offer aside from regular wages.

“In general, “hours worked” includes all time an employee what is fund flow investing definitions must be on duty, or on the employer’s premises or at any other prescribed place of work. Also included is any additional time the employee is allowed (i.e., suffered or permitted) to work.” Defined by the United States Department of Labor. An employee’s wages from the start of the year to their most recent payday. Year-to-earnings are typically reflected on the employee’s pay stubs.

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An organization that shares a worker’s employment with another organization. A process for calculating how much gross amount is needed to guarantee a specified net amount. An economic model where consumers hire contractors or freelancers for short-term projects. A bookkeeping system that records all a business’s financial transactions. Structured conversation with departing employees to gain feedback on their experience.

Payroll Terms and Acronyms Glossary

We’ve also included clear examples and related resources so you can understand what all those acronyms and invest in tax free municipal bonds for lower taxes and risk accounting terms mean. The W-3 form is completed by employers, and summarizes employee wages and tax information from the W-2 form. Also known as “Transmittal of Wage and Tax Statements”, it’s sent to the Social Security Administration (SSA) every year at the same time as the W-2.