Every professional field has its own jargon, and payroll is no exception. Still, it's easy for anyone, even someone who has worked in payroll for many years, to suddenly and quite literally find himself or herself at a loss for words. Not being able to communicate a concept to a colleague — or understand what a co-worker or boss is talking about — can be embarrassing and professionally destructive.
Accelerated Deposit Rule: Colloquially known as the "one-day rule," the accelerated deposit rule requires employers that accumulate a payroll tax liability of $100,000 or more during a deposit period to deposit the withheld taxes on the next banking day after the day on which the liability was incurred.
Accounting Period: The period covered by an income statement.
Allowances: Money, other than basic pay, that compensates for expenses such as meals, rent, clothing and travel. The term can also apply to compensation that is given to an employee for maintaining proficiency in a specific skill area.
Cafeteria Plan: An employee benefit plan that enables employees to use pretax salary or wages to create their own customized benefits package.
CODA (Cash or Deferred Arrangement): A retirement-plan arrangement that allows employees to either receive cash or have the employer contribute an equal amount to the plan.
Catch-up Contributions: Elective payroll deferrals that are made by an employee to a defined contribution retirement plan, or IRA (Individual Retirement Account) , above any standard statutory limit.
Deferred Compensation: An arrangement by which compensation to employees for past or current services is postponed until a future date.
Disposable Earnings: The part of an employee's earnings that remain after deductions.
Defined Benefit Plan: An employer-funded retirement plan that uses a calculation (typically based on an employee's length of service, salary and age) to determine benefits.
Defined Contribution Plan: With a defined contribution plan, the final retirement benefit is variable while the current contribution amount is defined. Contribution amounts are determined in various ways, depending on the particular plan involved.
Elective Deferral: A contribution to a cash or deferred arrangement made pursuant to an employee's election to have such contribution made in lieu of receiving cash.
EFTPS (Electronic Federal Tax Payment System): A tax-payment system offered by the U.S. Department of Treasury that allows the payment of federal taxes electronically and free of cost.
ERISA (Employee Retirement Income Security Act of 1974): The federal law that sets protection standards for individuals in most voluntarily established, private-sector retirement plans.
ESPP (Employee Stock Purchase Plan): A type of employee benefit that allows participants to purchase company stock at a discounted price.
Employment Tax E-File System: The IRS (Internal Revenue Service) system for electronically filing Forms 941 and 940 to report taxable wages.
FICA (Federal Insurance Contributions Act): The mandated Social Security payroll deduction required by the U.S. government.
Garnishment: A legal notice ordering an employer to forward money to satisfy child support, debt payments or other type of financial obligation.
Gross-up: A calculation employers can use to determine the taxable gross wages it chooses to pay.
HSA (Health Savings Account): A high-deductible health plan coupled with a personal savings account that's used to accumulate funds for qualified medical expenses.
HCE (Highly Compensated Employee): An employee who receives compensation in the top 20 percent of all employees, is a 5 percent owner of the business and exceeds certain annual compensation levels, according to the IRS and in the context of certain benefits plans.
ISO (Incentive Stock Option): A statutory stock option that enables an employee to purchase company stock below the current market price.
Independent Contractor: A worker hired to perform a specific task or set of tasks who has the right to control or direct his or her own work details and the means by which the desired results are achieved.
MMREF (Magnetic Media Reporting and Electronic Filing) Specifications: A set of specifications for electronically filing Forms W-2 and W-2c with the SSA (Social Security Administration).
Net Pay: The money an employee receives after taxes and other reductions have been made.
On-Call Time: The time period when an employee, typically a service worker, must remain on the employer's premises or nearby so that he or she cannot use the time effectively for personal purposes.
Overtime: The working time outside of an employee's regular hours or time spent on the job in excess of 40 hours per week. The legal definition of overtime varies by state.
Paycard: Stored-value debit cards funded by employers with employees' pay. Workers can access their pay by using the cards to withdraw cash or make purchases.
Per diem: A daily expense payment, usually made for travel, food and/or transportation.
Percentage Method of Withholding: A method of calculating withheld federal income tax from an employee's wages, typically used when calculations are automated.
Preliminary and Postliminary Activities: Time spent by employees getting ready to work or getting ready to leave work. Such activities are usually not considered compensable time unless the activity is essential to the employee's principal work activity.
PEO (Professional Employer Organization): An outside organization hired to assume responsibility for some or all HR administration and compliance operations.
Qualified Plan: A benefit plan that meets IRS qualification requirements for certain tax-favored treatments.
Reciprocity: A relationship between two jurisdictions, such as states, under which privileges granted by one are returned by the other. Reciprocal agreements are often created to cover residents working and living in neighboring states.
SIMPLE (Savings Incentive Match Plans for Employees of Small Employers) Plans: A type of defined contribution plan for employers with 100 or fewer employees that can be set up as a 401(k) or IRA. The plan allows pretax employee contributions and mandatory employer-matching contributions.
Shift Differential: Additional wages that are paid to some employees in return for working a less-desirable shift.
SUB (Supplemental Unemployment Benefits): Payments provided to terminated employees from an employer-financed fund beyond regular unemployment compensation. SUBs are taxable as wages and subject to income-tax withholding but aren't subject to Social Security, Medicare or federal unemployment taxes.
SEP (Simplified Employee Pension): An IRA available to some smaller employers. A SEP IRA is designed to serve as a low-cost, easy-to-maintain retirement plan for an employer and his or her employees.
Split Shift: A work shift divided into two periods of time with several hours in between.
Statutory Employees: A worker who is treated as an employee for Social Security and Medicare tax purposes and as self-employed for income-tax purposes.
Taxable Wage Base: Maximum amount of employee compensation subject to Social Security and unemployment taxes.
Third-Party Sick Pay: Payments made by a third party, such as a state fund or insurance company, to employees for an illness or non-work-related injury.
Tip Credit: A credit against the minimum wage allowed for employees who receive tips.
Wage Assignment: The use of a portion of an employee's future earnings to meet scheduled payments, such as union dues or insurance premiums.
Wage Attachment: An involuntary transfer — typically mandated by a court order — of an employee's wages in order to satisfy a debt.
Wage-Bracket Withholding Method: A procedure for calculating the amount of federal income tax withholding using wage-bracket tables.
Wage Orders: State agency directives that set wage and hour standards, usually for specific industries.
401(k) Plan: A tax-qualified deferred-compensation plan in which an employee can choose to have his or her employer dedicate a portion of his or her cash wages on a pretax basis. These deferred wages are not subject to income-tax withholding at the time of deferral. They are, however, subject to Social Security, Medicare and federal unemployment taxes.
Are you paying too much for your contact center software? Are you satisfied with its capabilities, or do you wish it did more? These are questions most businesses don’t take the time to think about, even though contact center software is one of the most important investments that you’ll make. With a little bit of planning, you can end up saving money and still end up with better functionality. more
Video conferencing is quickly becoming one of the most important communication channels for both small and big businesses. As more businesses turn to this technology, expectations about the experience are also rising. It’s not enough to just offer video conferencing as a communication method. You also need to meet minimum audio and visual standards, and there’s even proper etiquette to consider. more