Money paid to an employee for work done in a previous pay period, such as a salary increase that was due in the prior pay period. Allows employees who live in one state and work in another to pay state income tax to their home state, instead of the state they work in. A zero-dollar ACH transaction to verify whether an employee’s bank account information is correct, prior to paying them by direct deposit. “In general, \”hours worked\” includes all time an employee must be on duty, or on the employer’s premises or at any other prescribed place of work. The amount an employer deducts from a noncustodial parent’s wages to satisfy a child support order from the court.
- Payment made to an employee to cover time away from work due to falling ill.
- New hire reporting is a process employers undergo to report new hires to their state.
- The loss of an employee whose exit has neutral or beneficial effects on the organization.
Employer Identification Number (EIN)
The W-3 form is a summary of all W-2 forms issued by your company in a calendar year. This form reports total earnings, Social Security wages, and Medicare wages for all employees. Payroll can be confusing for everyone, especially for small business owners who are new to it. It’s important that you understand these terms and acronyms to be confident that you’re processing payroll for direct marketing sales strategy your employees accurately. In other words, there are some specific paystub abbreviations that are company dependent.
Fringe Benefits
Payroll accruals are funds owed to workers for hours they previously worked but haven’t yet been compensated for. Learn more about the difference between employees and independent contractors in our W2 vs 1099 comparison. Net pay is the final amount you pay your employees for their work after all deductions have been made.
Browse by category, alphabetically, or use the search bar to find what you need. Sign up to receive more well-researched small business articles and topics in your inbox, personalized for you. Learn how to compute vacation accruals in our guide—we even provide a calculator to make things easier for you. Learn more about Salaried vs Hourly employees and how to classify them in our guide. Check our article on how to get an EIN for more specific instructions on this process. We will show you 25 ways to show proof of income, so you can move forward in your application process.
Qualified Deferred Compensation Plan
Offering these benefits can make small business employment packages more attractive. Severance pay is compensation offered to employees upon termination of employment beyond their final paycheck. Unless specified in an employment contract or collective bargaining agreement, severance pay is not usually mandatory. It’s imperative to act quickly after receiving a notice because employers can be held liable. The W-9 form is used to collect taxpayer information from independent contractors and other vendors or entities you pay for services. Before engaging with any vendor or contractor, ensure you have what is petty cash and why is it bad for your business a completed W-9 on file.
Extended Illness Bank (EIB)
Taxable wage is the portion of an employee’s earnings subject to income tax. It includes their gross pay minus any pre-tax deductions like retirement or health insurance. Hourly employees are paid based on the actual hours worked, making their paychecks vary each pay period. It’s vital to accurately track working hours to ensure fair payment and compliance with labor laws, especially overtime.
You may also be able find more resources in your employee handbooks or HR department. They are deductions that are taken out from your income before the tax is calculated. The intention of this article is to provide general information about payroll abbreviations and how suspense account in quickbooks to understand your pay stub. ACH is an electronic network for processing direct deposits and other payroll transactions.