The FLSA also sets out how to treat jobs that are primarily compensated by tipping. An employer must pay the minimum wage to tipped service workers unless they regularly receive more than $30 per month from gratuities. Many payroll fintech firms including Atomic, Bitwage, Finch, Pinwheel, and Wagestream are leveraging technology to simplify payroll processes. Handling your own payroll for your business can be tricky because the payroll/payroll tax process involves a vocabulary all its own.
ACH (Automated Clearing House)
These payments are an expense that’s recorded as payroll by a firm. You’ll usually pay federal taxes when you pay Social Security and Medicare taxes. The law requires that overtime hours over 40 hours per week be paid at one-and-a-half times the regular hourly rate.
Supplemental Wages
- An allowance given to employees for travel-related business expenses, such as meals and lodging.
- A third-party organization that partners with businesses to streamline HR and payroll tasks.
- With EFTPS, employers and taxpayers can pay their taxes by phone or online free of charge.
- Base pay is the minimum amount of money an employee is paid, usually in the form of a fixed salary or regular hourly rate.
Most deductions don’t affect the amount of an employee’s taxable income, but some are considered pre-tax. These are subtracted from the employee’s gross income to reduce their taxable income. Examples are retirement plan contributions and some health care costs. An employer-paid federal payroll tax which is used to help fund the unemployment insurance system. Also provides a fund that states can borrow from for unemployment benefits purposes. The federal, state, and local taxes an employee is legally required to pay (though payroll withholding).
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. A government-run program that gives short-term disability benefits to employees. A third-party organization that partners with businesses to streamline HR and payroll tasks.
Deduct Taxes (FICA, Unemployment, and Income Taxes)
Its job is to administer both Social Security and the Supplemental Security Income (SSI) program. When hiring independent contractors, employers must be able to provide proof, or reasonable basis, that the contractor label is actually justified. Some hourly workers aren’t covered by the FLSA but they’re subject to other regulations.
Some employees are exempt from the FLSA and the Act doesn’t apply to independent contractors or volunteers because they’re not considered employees. Employers with gross sales of $500,000 or more per year are subject to the requirements of the Fair Labor Standards Act (FLSA) passed in 1938. The FLSA sets out various labor regulations, including minimum wages, requirements for overtime pay, and limitations on child labor. FLSA rules specify when workers are considered to be on the clock and when they should be paid overtime. These types of payments are taxable, so you must separate them out when you’re doing payroll accounting and include them in the employee’s taxable wages for the year.
Know the differences between HMO, EPO, and PPO insurance plans to determine which is best for your employees. Discover effective HR strategies to support LGBTQIA+ employees, reduce workplace discrimination, and foster an inclusive culture. Learn how language, benefits, and open communication can make a difference. While these are useful basic terms to know, the ins and what is a supplier invoice outs of payroll processing are far more complex and definitely require more thorough knowledge. For more than 30 years, Paycor has maintained a core expertise in payroll, tax filing and compliance. If you don’t want to go it alone, you can entrust your payroll to the experts at Paycor.