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Payroll Terminology Small Business Payroll Glossary

payroll acronyms

Unemployment programs offer temporary compensation to people who have lost their jobs through no fault of their own. This website is using a security service to protect itself from online attacks. The action you just performed triggered the security solution. There are several actions that could trigger 11 best excel tips for beginners this block including submitting a certain word or phrase, a SQL command or malformed data. This professional designation is provided for those who successfully complete the certified payroll professional examination. You’ll toss about the term QC (Quality Control) as though it’s in the dictionary.

  • For hourly employees, this is their hourly rate multiplied by the number of hours they’re being paid for the period—plus any overtime, bonuses, and additional pay.
  • You don’t have to be an expert to know that both you and your employees pay FICA taxes or that all W-2s should be mailed by Jan. 31.
  • Exempt means “exempt from overtime.” Exempt and non-exempt employees are categorized typically by the work they do.
  • For example, say you hire Julie and say you’ll pay her a $50,000 salary.
  • Its job is to administer both Social Security and the Supplemental Security Income (SSI) program.

The Social Security Administration is the government body set up by the Social Security Act. Its job is to administer both Social Security and the Supplemental Security Income (SSI) program. An acronym for Automated Clearing House, ACH refers to an electronic network dedicated to credit and debit transfers. If any of the information on your paystub seems incorrect or you don’t understand, you can contact your payroll department and have them correct it or explain it to you. Keep in mind, federal and state regulations often change rules regarding pre-tax deductions.

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Browse by category, alphabetically, or use the search bar to find what you need. The Ascent is a Motley Fool service that rates and reviews essential products for your everyday money matters. We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team. Someone with a working knowledge of these 28 payroll terms will be able to speak intelligently about payroll. There’s a lot more to learn, though, so keep up with The Ascent’s payroll content.

payroll acronyms

The intention of this article is to provide general information about payroll abbreviations and how to understand your pay stub. Some payroll companies use their own set of these abbreviations while some don’t. In this article will cover pay stubs abbreviations from all major payroll companies like ADP, QuickBooks, Paychex, Ariba, E-Verify and Paycom. Exempt – Amounts that are not considered part of the taxable compensation.

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For example, you may provide your employee who travels to customers a Fuel Allowance of $50 a week. Payroll Dictionary is a free resource and reference for payroll terminology and definitions. No matter how long we work at a job, there come times when we struggle to remember certain work related words or definitions. 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. Garnishments are court orders directing employers to withhold a certain amount from an employee’s paycheck to pay an outstanding debt.

In these instances it will only contain GST and PAYG Withholding information, unlike the BAS which includes a variety of tax reporting. State laws, however, differ; for instance, California requires employers to provide at least 24 hours (three days) of paid sick leave each year. It’s imperative to act quickly after receiving a notice because employers can be held liable. Understand applicable payroll taxes, stay compliant with IRS. The extra amount added to an employee’s wages for working outside normal business hours.

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Those funds are not subject to certain taxes at the time of deposit. 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. That’s why many employers outsource payroll by hiring a payroll processing service, a bookkeeper, or an accountant. Payroll calculations for an individual employee over time are called an earnings record.

  • To get started, just share a few basic details about your business.
  • Payroll can be a noun when it describes a business’s financial records on employee pay.
  • Citizen living permanently in the United States is referred to as a resident alien.

Participating in an HDHP is a requirement for having an HSA. Payroll technically starts when an employee fills out a W-4 form, which tells the business details about how they want to be taxed. Throughout the year, the information from that W-4 form will inform the taxes that the business withholds on behalf of that employee. Keep reading to learn all the basics of payroll, from the outline of the payroll process to some options for businesses who would rather let someone else deal with it all.

Global Payroll

Under this law, employers are required to notify employees at least 60 days before a plant closing or other type of mass layoff. The individual retirement account (IRA) offers employees greater control over their retirement savings. With this retirement plan, employees can deposit funds and enjoy access to tax advantages. In payroll processing, an accrual occurs any time there is a difference between the pay cycle allocation and the actual expenses paid.

Find explanations and examples that make payroll less mysterious

These taxes are sometimes called “payroll taxes.” The employer may also deduct other amounts from the paycheck. These might include contributions to a retirement plan or health plan, as well as union dues or charitable contributions. Imputed income is added to the employee’s gross income and is subject to Social Security and Medicare taxes but typically not federal income tax. Employers must include imputed income in the employee’s W-2 form for tax purposes. Additionally, imputed income may be used to determine an amount for child support payments in some states. This is the amount earned by employees before any income taxes, benefits, or deductions are taken out.

Income tax withholding

We guarantee that your payroll taxes are calculated and filed accurately once payroll data is entered correctly, just take a look at our online payroll service. Fringe benefits, also called imputed income, are the perks that businesses offer aside from regular wages. For example, the New Jersey minimum wage is $12 per hour in 2021. Their maximum tip credit is $7.87 per hour, meaning employers of tipped workers must pay their employees at least $4.13 per hour ($12 – $7.87). If a New Jersey server doesn’t make enough in base pay and tips to earn $12 per hour each shift, the employer must contribute the difference. The Federal Insurance Contributions Act (FICA) mandates a payroll tax to be imposed on both employees and employers.

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