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. Citizen living permanently in checklist for starting a business the United States is referred to as a resident alien. This professional designation is provided for those who successfully complete the certified payroll professional examination.
Employee’s Withholding Allowance Certificate (W-
Refers to when an employer pays its employees once every two weeks, such as every other Friday. SSN stands for Social Security number, or the code assigned by the Social Security Administration to every American’s social security account. In most circumstances, resident aliens can only be employed by organizations or companies that have sponsored their admission into the United States. Upon the resident alien’s admission, the sponsor is required to sign an affidavit agreeing to support the admitted individual. Simplified employee pensions or SEPs are similar to IRAs but differ in that they allow employees to make contributions above and beyond the usual IRA limits. A high-deductible health plan (HDHP) is a health insurance plan that has lower premiums and higher deductibles than a typical health insurance plan.
Employee self-service (ESS)
Refers to the state taxes an employer is required to withhold from employees’ wages, such as state income tax and SDI tax. The employment tax reports an employer must file with the state taxation agency. Applies to employers who must withhold state taxes from employees’ wages and/or pay their own share of state employment taxes. Paycheck deductions that are subtracted from an employee’s wages before withholding applicable taxes. Pre-tax deductions include health benefits offered under a cafeteria/Section 125 plan.
A government-run program that gives short-term disability benefits to employees. Compensation added to an employee’s paycheck to make up for a shortfall in a previous period. The permanent termination of employees from a company, typically as a cost-saving measure. An arrangement where workers who live and work in different states only pay taxes to the state where they live. A fraud detection tool that matches employer-issued paychecks against a list of authorized checks.
Payroll Terms and Acronyms Glossary
They must be over a standard salary level of $684 a week ($35,568 a year for a full-year worker) to be exempt. You must pay them overtime if an exempt employee is paid less than $684 a week. Exempt means “exempt from overtime.” Exempt and non-exempt employees are categorized typically by the work they do. Most exempt employees work in professional, managerial, or executive positions, sometimes referred to as a “white-collar exemption.” To get started, just share a few basic details about your business. Our team of pros will cost of debt set everything up and import your employees’ information for you.
Prevailing Wage
Bookmark it for easy reference — whether you’re an HR pro, a business owner, or just trying to decipher your paycheck. 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.
There are many ways to provide this time, accruals being one of them. Many employers choose to allow the employee to earn (or accrue) a certain an example of a bookkeeping entry of buying on credit amount of time per pay period they work. Many types of cloud-based accounting software are available for small businesses as well.
- If you don’t want to go it alone, you can entrust your payroll to the experts at Paycor.
- A fraud detection tool that matches employer-issued paychecks against a list of authorized checks.
- There is a wage base limit, which means that the tax stops at a certain amount of wages for the year.
- But all deductions from an employee’s paycheck except for deductions ordered by a court must be approved by the employee in writing.
- They must put aside and record the amount to be paid to the government for Medicare, Social Security, and unemployment taxes.
Pretax deductions are taken out of an employee’s pay before payroll taxes and after-tax deductions are withheld. These deductions — which include benefits offered under a Section 125, or cafeteria plan — decrease employees’ taxable wages. Compensation includes total cash and noncash payments made to an employee in exchange for his or her services rendered. The amount of federal income tax an employer is required to withhold from an employee’s wages.
A non-exempt employee is entitled to overtime pay when they work more than 40 hours in a week. Overtime pay is equal to 1 ½ times the employee’s regular rate of pay. States use this information to enforce laws and benefits such as welfare assistance and fraudulent use of collecting unemployment insurance. To start off, we need to define and understand specific basic but key terms such as what payroll and payroll taxes mean. Taxable wage base is the maximum amount of employee compensation subject to Social Security, FUTA, and state unemployment insurance taxes.