It can be hard to keep track of the meanings of words about a certain topic. When it comes to running a business, it would seem that you are constantly encountering some new word or phrase that you’ll inevitably be googling the definition of.
At Payday HCM, we understand this struggle. We constantly have plenty of clients approaching us with questions about what a word might mean or what this phrase means. Even for us, it can be helpful to have a reference to go back to for those words that you just can’t quite remember the definition of.
Here, we’ve compiled a list of words and phrases related to payroll. We’ll continue to update this list with new words and phrases related to the topic. Be sure to bookmark this page to keep a reference on all things related to payroll.
Allowances
Specific amounts allocated to employees for certain expenses, like travel or meals.
Annual salary
The total yearly compensation agreed upon for an employee’s work.
Audit
A review of payroll processes and records to ensure accuracy and compliance.
Benefits
Non-wage compensation provided to employees, such as health insurance, retirement plans, or paid time off.
Bonus
Extra compensation given to employees as a reward for performance or meeting certain goals.
Commission
Earnings based on a percentage of sales or revenue generated by an employee.
Compensation
The total monetary and non-monetary benefits an employee receives for their work.
Compliance
Adherence to legal and regulatory requirements related to payroll and employee compensation.
Deduction
Amounts subtracted from an employee's gross pay for taxes, benefits, and other obligations.
Direct deposit
A method of electronically transferring an employee's pay directly into their bank account.
Employee
An individual who works for an employer in exchange for compensation.
Employer
An organization or individual that hires and compensates employees for their work.
Exempt employee
An employee who is not eligible for overtime pay, typically due to their job classification.
Expense reimbursement
Compensation provided to employees for costs incurred during work-related activities.
FICA
Federal Insurance Contributions Act; a U.S. payroll tax that funds Social Security and Medicare programs.
Fringe benefits
Additional perks or benefits provided to employees, such as tuition assistance or gym memberships.
Garnishment
A legal process where a portion of an employee's wages is withheld to satisfy a debt or obligation.
Gross pay
The total earnings of an employee before any deductions are applied.
Holiday pay
Additional compensation given to employees for working on or being scheduled off on holidays.
Hourly rate
The amount an employee is paid for each hour of work completed.
HR (Human Resources)
The department responsible for managing employee relations, payroll, and compliance.
Medicare
A federal health insurance program primarily for individuals aged 65 and older, funded by payroll taxes.
Minimum wage
The lowest hourly rate an employer is legally required to pay employees.
Net pay
The amount of money an employee takes home after deductions and taxes are withheld.
Non-exempt employee
An employee entitled to overtime pay under labor laws.
Overtime
Additional pay earned by employees for hours worked beyond their standard work schedule.
Pay period
The recurring schedule that determines how often employees are paid (e.g., weekly, bi-weekly, monthly).
Pay stub
A detailed summary provided to employees outlining their earnings, deductions, and net pay.
Paycheck
A physical or digital document issued to employees detailing their earnings and deductions.
Payroll processing
The administration of employee payments, including calculating wages, taxes, and issuing paychecks.
Payroll schedule
A predetermined timeline that outlines when employees will receive their pay.
Payroll software
Digital tools used to automate and streamline payroll management.
Payroll system
Software or processes used to manage employee compensation, tax withholding, and benefits.
Payroll taxes
Taxes imposed on employers and employees to fund government programs like Social Security and Medicare.
Pension
A retirement plan that provides employees with regular income after they retire.
PTO (Paid Time Off)
Time off work that an employee is paid for, such as vacation or sick leave.
Retirement plan
Savings programs, such as 401(k)s, designed to help employees save for retirement.
Salary
A fixed, regular payment made by an employer to an employee, typically on a monthly or bi-weekly basis.
Severance pay
Compensation provided to an employee when their employment is terminated.
Social Security
A government program funded by payroll taxes that provides retirement, disability, and survivor benefits.
Tax filing
The submission of employee and employer tax information to government agencies.
Tax forms (e.g., W-2, W-4)
Documents used to report earnings and determine tax withholding preferences.
Taxable income
The portion of an employee’s earnings subject to taxation.
Taxes
Mandatory contributions withheld from employee earnings for government programs and services.
Time tracking
Monitoring and recording the hours worked by employees for accurate payroll processing.
Timesheet
A record used to track the hours worked by an employee.
Unemployment insurance
A program providing temporary financial assistance to individuals who have lost their jobs.
Wages
Compensation paid to employees based on hours worked or quantity of work completed.
Withholding
The portion of an employee’s earnings retained by the employer for taxes and other deductions.
Workers' compensation
Insurance coverage that provides benefits to employees injured on the job.
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