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Written by monzurul82 in Uncategorized
Oct 8 th, 2020
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Independent Contractor – A nonemployee contracted by a business to perform services. Although the business specifies the result of the work to be performed, it has not right to control the details of when, how, or who will ultimately perform the work. Income Tax Treaties – Treaties between the U.S. and foreign countries that may have provisions governing the tax treatment of U.S. employees working in those countries, as well as aliens from those countries working in the U.S. Health Insurance Portability and Accountability Act – Law passed in 1996 restricting the right of group health plans to limit participation by newly hired employees and their dependents because of preexisting medical conditions. Garnishment – A legal proceeding authorizing an involuntary transfer of an employee’s wages to a creditor to satisfy a debt. Form W-5 – Earned Income Credit Advance Payment Certificate; must be filed by employees who want to take advantage of advance EIC payments and which attests to their eligibility for the advance payments. Form W-3c – Transmittal of Corrected Income and Tax Statements; form that accompanies Form W-2c in most situations when it is sent to the SSA that totals the information from all the W-2c forms being submitted.
This is the amount the employee receives after taxes and deductions are calculated and subtracted from earnings. Gross pay– Gross pay is the total pay received by the employee before taxes and deductions are removed. This includes the base pay plus any additional earnings (ex. bonuses, vacation pay, commissions, etc). Reported Time – the term used to describe the regular hours and leave on a timesheet. Payable Time – the term used to describe the regular hours and leave on a timesheet once the Time Administration Process has been run. This process is run on a schedule and turns Reported Time into Payable Time.
Originating Depository Financial Institution – A financial institution that is qualified to initiate deposit entries submitted by an employer as part of the direct deposit process. One-Day Deposit Rule – If an employer’s accumulated employment tax liability reaches $100,000 on any day during a monthly or semiweekly deposit period, the taxes must be deposited by the close of the next banking day. Nondiscrimination Testing – Tests that determine whether benefit plans provided by an employer discriminate in favor of highly compensated or key employees. If such discrimination is found, the employer will lose its favorable tax treatment for the benefit. Benefits provided under the plan may be taxable to employees receiving them. Negative Account Employer – An employer whose state unemployment tax payments are less than the benefits charged to it unemployment reserve account. Lookback Period – the 12-month period running from July 1 or the second preceding calendar year through June 30 of the preceding calendar year.
Individual Taxpayer Identification Number – A tax reporting identification number issued to aliens in the U.S. who cannot get a social security number but are required to file a tax or information return with the IRS. Group Term Life Insurance – Term life insurance that is provided to employees, with the cost being borne by the employer, the employee or both. Garnishee – An employer that receives an order requiring withholding from an employee’s wages to satisfy a debt. A garnishee can also be a debtor against whom a creditor has brought a process of garnishment. Form 941c – Statement to Correct Information; a form used to make adjustments to Form 941 when taxes have been under or over withheld ; explains the nature of the adjustment and shows the erroneous and correct amounts of tax withheld.
Garnishment– A legal proceeding authorizing an involuntary transfer of an employee’s wages to a creditor to satisfy a debt. ACH – This is an electronic network for processing direct deposits and other payroll transactions.
Totalization Agreements – Agreements between the U.S. and foreign countries that prevent double social security and Medicare taxation of U.S. employees working abroad and aliens working in the U.S. Tax Protection Plan – A plan offered by an employer to an employee working abroad that would guarantee the employee a foreign tax obligation no larger than he or she would have in the U.S. Tax Equalization Plan – A plan offered by an employer to an employee working abroad that would provide the employee with the same take-home pay he or she would have in the U.S.
Pre-tax deductions are subtracted from the person’s gross income to reduce their taxable income. Examples are retirement plan contributions and some health care costs. Trust Fund Taxes – The amounts withheld by employers from employees’ pay for federal income, social security and Medicare taxes. They are referred to as trust fund taxes because the money is held in a special trust fund for the U.S. government. Amounts withheld for state and local income taxes are held in trust for the state or local government.
Fluctuating Workweek – An arrangement between an employer and a nonexempt employee to pay the employee a fixed weekly salary even though the employee’s hours may vary from week to week. Economic Growth and Tax Relief Reconciliation Act of – Significant tax cut legislation enacted in 2001 that reduced income tax rates and increased pension plan elective deferrals.
Payroll administrators work mostly in small organizations and companies as the top-ranking payroll employee. Requirements include an associate’s degree, three to five years of payroll experience and payroll certification, according to Study.com.
Sign up to receive more well-researched human resources articles and topics in your inbox, personalized for you. Net pay is the final amount you pay your employees for their work, after all deductions have https://quickbooks-payroll.org/ been made. Assistance payments made by state welfare agencies to qualifying families who are deprived of financial support by reason of the death, disability, or continued absence of one of the parents.
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. By implementing payroll terms into your vocabulary, you make it easier to digest related laws and concepts. The EIN is a unique nine-digit number assigned to all employers that submit an IRS EIN application; it helps identify businesses as they file taxes, apply for business loans, and open business bank accounts.
The W-2 Form is a tax document that reports all employee earnings in addition to taxes and deductions withheld. Employers must send this document to all employees by Jan. 31 following the year that’s being reported. A copy should also be sent to the IRS and state tax agency, if applicable. The information provided helps employees complete their tax returns with accurate information. You’ll hear this thrown around quite a bit and also referred to as FLSA. It’s a federal act that consists of numerous laws meant to assure that employees are treated well and paid fairly.
If an employer is required to withhold taxes, it is the amount of income taxes withheld when the salary is paid. The amount withheld is a credit against the amount of income taxes the employee must pay on his/her income earned for the taxable year.
Many benefits offered by employers do not qualify for favorable tax treatment if they discriminate in favor of highly compensated employees. An employer may also be restricted in their use of safe-harbor valuations of benefits provided to such employees. Disposable Earnings – That part of an employee’s earnings remaining after deductions required by law (e.g., taxes). It is used to determine the amount of an employee’s pay that is subject to a garnishment or child support withholding order.
When a person receiving public assistance agrees to turn over to the state any right to child support, including arrearages, paid by the obligated parent in exchange for receipt of an AFDC grant and other benefits. Once the employer has established an unemployment history, states calculate tax rates annually. An amended rate notice may be issued to reflect a change in any of the components used in calculating the original tax rate. Changes resulting from state legislation, approved retained earnings balance sheet after the issuance of the original tax rate, may also affect the tax rate. Employee’s Withholding Allowance Certificate (W-4)– Federal Form W-4 or state equivalent is where the employee states the number of withholding allowances claimed to determine income taxes to withhold from the employee’s compensation. Base pay rate– The rate that has been agreed upon to be the starting point for employee earnings. This can be an hourly rate, a daily rate, a piece rate, or salary per pay.
This federal agency is responsible for administering and enforcing the Civil Rights Act of 1964, the Age Discrimination Act of 1967, the Americans With Disabilities Act of 1990, and the Equal Pay Act of 1963. In order to be considered discretionary, the bonus cannot be paid because of a promise made in advance, a contract, or another agreement. Annual Wage Reporting – Social Security Administration’s system of recording wages reported annually by employers on Form W-2. Account – Representation of assets, expenses, liabilities and revenues in the general ledger, to which debit and credit entries are posted to record changes in the value of the account.
A corrected tax return intended to replace a previously filed quarterly or annual tax return. Claimants unable to establish a valid claim using a regular base period may use an alternate base period of the last four completed quarters.
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 payroll vocabulary how to work. Payments of earned income credit during the year to employees who expect to be eligible for the credit. Employers make the payments out of federal income, Social Security and Medicate taxes withheld from the employees’ wages.
Backup Withholding – Income tax withholding required from non-employee compensation when the payee fails to furnish the payer with a taxpayer identification number or the payer is notified by the IRS that the payee’s TIN is incorrect. Back-Pay Award – A cash award made to an employee that generally results from legal action to remedy a violation of federal or state wage-hour or employment discrimination laws. Actual Deferral Percentage – Percentage of wages deferred by employees participating in a salary reduction plan (e.g., 401 plan). The IRS uses the ADP to determine whether the plan meets the agency’s nondiscrimination requirements.
Method by which support orders are made and enforced by an executive agency rather than by a court and judge. Today’s digital landscape means limitless possibilities, and also complex security risks and threats. At ADP, security is integral to our products, our business processes and our infrastructure. ADP is a better way to work for you and your employees, so everyone can reach their full potential. Discover a wealth of knowledge to help you tackle payroll, HR and benefits, and compliance. Small, midsized or large, your business has unique needs, from technology to support and everything in between. Manage labor costs and compliance with easy Time & Attendance tools.
Straight Time – The standard number of work hours during a workweek for which an employee’s regular rate of pay will be paid. Costs incurred by an employee as the result of a move to a job in a new location.
Gross pay is the amount of an employee’s paycheck before payroll deductions are withheld. 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. For salaried employees, gross pay is usually the same each pay day; it’s their annual salary divided by the number of pay periods in the year. Adoption Assistance – Financial benefit provided by an employer to an employee to help with the child adoption process. Within certain limitations, it is excluded from federal income tax withholding, though not social security and Medicare taxes.
These amounts would be subtracted from the gross pay before the calculations of each applicable tax are completed. Web Clock – is the time collection for hourly employees located in P.A.S.S. Hourly employees assigned to the web clock time collecting process are responsible for clocking in and out via the web clock in order to track their hours. Time is transmitted from the web clock punches to payroll to be processed for the paychecks. TCD – one method of clocking in and out for biweekly employees that uses fingerprint recognition to record regular hours worked. The TCD is located in designated areas where the employee is responsible for clocking in by scanning their thumb. Data from the TCD is collected and sent over to payroll to be processed for paychecks. Voluntary Contributions – Advance payments of unemployment tax that can reduce an employer’s state unemployment tax rate.
Author: Michael Cohn
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