An extra employer contribution to an employee’s retirement plan to fulfill annual matching requirements. Unlike employees, employers aren’t allowed to dictate how or when contractors complete their work. EFTPS stands for the Electronic Federal Tax what changes in working capital impact cash flow Payment System, which is a free system offered by the U.S. Updated regularly with industry-specific vocabulary and concepts, the Glossary provides easy-to-understand definitions of tax-related terms. Here are some of the general pay stub abbreviations that you will run into on any pay stub.
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An internal form managers and employees can use to submit payroll requests, such as for manual checks, salary advance, or retroactive pay. The amount of wages that must be paid to an employee who voluntarily or involuntarily leaves the company. The maximum amount of taxable income on which an employee must pay taxes in a given year. Time away from work during which employees are still paid their normal wages. Temporary workers provided by an employee leasing company for a specific timeframe or project. A savings account that allows employees to use pre-tax income to cover qualified medical expenses.
Minimum Wage
Once you familiarize yourself with these key payroll phrases, you will feel like an expert next time you run your payroll. Time sheet is a system or document outlining the hours worked by every employee. Independent contractors are not employed by a company they serve or contract with and usually just work with the company on a specific project.
- The portion of an employee’s wages that is subject to Social Security tax.
- A standardized rate for wages and benefits that government contractors or foreign laborers must pay workers.
- The W-9 form is used to collect taxpayer information from independent contractors and other vendors or entities you pay for services.
- It includes all financial compensation made directly, regularly, and consistently to the employee.
- We will show you 25 ways to show proof of income, so you can move forward in your application process.
Overtime pay is the additional hourly money you pay an employee in excess of their regular pay rate, usually for time worked over 40 hours in a seven-day period. Employers pay a reasonable wage and may offer benefits, especially if employees work at least 40 hours weekly; you must also pay and withhold taxes on employee earnings. In exchange, these employees must abide by company rules such as when and how to work. Each state sets its own SUTA tax wage base, which is the maximum amount of an employee’s income that can be taxed. In addition to the wage base, each state then establishes the rates, which can vary anywhere from 0.5% to 7% depending on the state. Rates are determined based on a few different factors, and often many states give new employers a standard rate.
Additional pay an employee receives for hours worked outside of normal business hours, such as evening or night shifts. In terms of state payroll taxes, an how laurence marsach became overtime’s star personality employee is a resident if the state is officially their home and they have no intention of living there temporarily. The portion of an employee’s wages that is subject to Medicare tax withholding. A standardized rate for wages and benefits that government contractors or foreign laborers must pay workers. A comprehensive record of each employee’s payroll and wage data for a given pay period. The remaining amount of pay an employee receives after taxes and deductions.
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. The portion of an employee’s wages that is subject to Social Security tax. Compensation that an employer provides to terminated employees, typically those who are discharged through no fault of their own (e.g., layoff).
How to Understand Pay Stub Abbreviations?
Some employers choose to offer these benefits universally to all employees, while others award them to high-level employees as an additional incentive. Benefits administration is the process of managing the benefits offered to your employees. This could include health insurance, retirement plans, commuter benefits, and any other benefit you offer. Back pay refers to any wages owed to an employee for work previously closing and dissolving a charity performed but not paid at the time. Situations requiring back pay can arise from administrative errors, incorrect pay rates, or overtime miscalculations.
Paid Time Off (PTO)
Be aware, however, that not all states allow tip credits, and some states require higher tipped minimum wages than others. A shift differential is a premium amount you can pay employees who work outside of normal business hours. The additional pay is usually calculated as a percentage of the employee’s pay rate, like 30% extra, or a flat dollar amount, like an extra $3 per hour.
An organization that shares a worker’s employment with another organization. The process of calculating the cost of producing a specific product or service. A process for calculating how much gross amount is needed to guarantee a specified net amount. A bookkeeping system that records all a business’s financial transactions.
