Glossary Of Terms And Acronyms Flashcards
(472 cards)
1
Q
A set of criteria used by many states to determine the relationship of a worker to the organization for which services are performed. A worker meeting these criteria is considered an independent contractor under the state’s unemployment insurance law.
A
ABC Test
2
Q
Also known as the one-day rule, it requires employers that accumulate a tax liability of $100,000 or more during a deposit period to deposit the withheld taxes within one banking day of the day the liability was incurred
A
Accelerated Deposit Rule
3
Q
A financial institution, college or university, federal agency, state and local government, community-based nonprofit organization, or professional tac return preparer that operates under an agreement with the IRS to aid aliens in processing their requests for Individual Taxpayer Identification Numbers. They may also be referred to as “community based certified acceptance agents”
A
Acceptance Agents
4
Q
The 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 this.
A
Account
5
Q
An Employer’s business expense reimbursement plan that satisfies all IRS requirements regarding substantiation, business connection, and return of excess amounts in a reasonable period of time.
A
Accountable Plan
6
Q
The period covered by an income statement (e.g., month, year); also known as a business cycle.
A
Accounting period
7
Q
The recognition of assets, expenses, liabilities, or revenues after the cash value has been determined but before it has been transferred.
A
Accrual
8
Q
Software available by online access from the Social Security Administration’s website that can be used to test electronic wage reports (Form W-2 and W-2c information) for proper formatting before submittal to the SSA.
A
AccuWage
9
Q
The percentage of employer matching contributions and after-tax employee contributions made to an employee’s account in a 401(k) plan. The IRS uses this to determine whether the plan discriminates in favor of highly compensated employees.
A
Actual Contribution Percentage (ACP)
10
Q
The percentage of wages deferred by employees participating in a salary reduction plan (e.g., 401(k) plan). The IRS uses this to determine whether the plan meets the agency’s nondiscrimination requirements.
A
Actual Deferral Percentage (ADP)
11
Q
Accidental Death and Dismemberment Insurance
A
AD&D
12
Q
A 0.9% tax that must be withheld by the employer from an employee’s wages when they exceed $200,000 in a calendar year, in addition to the basic Medicare tax rate of 1.45%. The employer does not have to pay an employer share on this amount.
A
Additional Medicare Tax
13
Q
A form in the 94X series that allows employers to make interest-free adjustments to previously filed employment tax returns and to pay amounts owed or claim a credit or refund of amounts overpaid.
A
Adjusted Return
14
Q
An entry made at the end of an accounting period to update or adjust an account before financial statements are prepared.
A
Adjusting Entry
15
Q
Denotes regulations, interpretations, announcements, etc., issued by government agencies empowered to enforce laws, such as the Internal Revenue Service, the Department of Labor, the Social Security Administration, and the Equal Employment Opportunity Commission.
A
Administrative
16
Q
Financial benefits provided by an employer to an employee to help with the child adoption process. Within certain limitations, it is excluded from federal income tax, though not social security or Medicare taxes.
A
Adoption Assistance
17
Q
Payments of earned income credit during the year to employees who expect to be eligible for the credit. These payments were eliminated for wages paid during employment tax return periods beginning after December 31, 2010.
A
Advance Earned Income Credit (AEIC)
18
Q
Popular name for health care reform legislation enacted in 2010, referring to the Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act.
A
Affordable Care Act (ACA)
19
Q
An e-filing system used by employers and insurance providers to file ACA information returns with IRS.
A
Affordable Care Act Information Returns (AIR) System
20
Q
A deduction from an employee’s pay that does not reduce the employee’s taxable wages. It is taken out only after all applicable taxes and other deductions have been withheld (e.g., union dues, garnishments, charitable contributions).
A
After-tax Deduction
21
Q
Federal Law that prohibits employment discrimination on the basis of an individual’s age (40 or older)
A
Age Discrimination in Employment Act of 1967 (ADEA)
22
Q
An ALE that is a member of a controlled group of corporations; often used to refer to all ALEs.
A
ALE Member
23
Q
A citizen of a country other than the U.S. or one of its territories or possessions
A
Alien
24
Q
Federal law that created a second level of supplemental wage tax rates and stricter rules on the taxability of nonqualified deferred compensation.
A
American Jobs Creation Act of 2004 (AJCA)
25
Federal law designed to provide an economic stimulus, in part by providing a tax credit through reduced income tax withholding and a discounted premium for continued health insurance coverage for involuntarily terminated employees.
American Recovery and Reinvestment Act of 2009 (ARRA)
26
Federal law that made permanent the tax rates established by EGTRRA 2001, added a new maximum income tax bracket of 39.6% and retroactively reinstated the parity among qualified mass transit, van pooling, and parking fringe benefits from January 1, 2012 through December 31, 2013.
American Taxpayer Relief Act of 2012 (ATRA)
27
Federal law that broadly prohibits discrimination against individuals with disabilities who can perform the essential functions of a job with or without reasonable accommodation.
Americans with Disabilities Act of 1990 (ADA)
28
The Social Security Administration's system of recording wages reported annually by employers on Forms W-2.
Annual Wage Reporting (AWR)
29
American Payroll Association
APA
30
An employer with at least 50 full-time and full-time equivalent employees that is required to provide affordable health insurance coverage at minimum value to its full-time employees under the Affordable Care Act.
Applicable Large Employer (ALE)
31
An outsourcing arrangement where the outsourcing company hosts each application at its location and the client gains access through the internet.
Application Service Provider (ASP)
32
A company that has been approved by the American Payroll Association to award Recertification Credit Hours (RCHs) for its payroll education curriculum.
Approved RCH Provider
33
Resources acquired by a business that are consumed by the business.
Assets
34
A review of a business's records and procedures to determine their accuracy and completeness.
Audit
35
In general, a written agreement (entered into voluntarily) authorizing an employer to withhold and distribute a portion of an employee's wages to a party designated by the employee (e.g., direct deposit, paycard, union dues, charitable contributions).
Authorization Agreement
36
A Federal Reserve Bank or private financial institution acting on behalf of an association operating a facility that serves as a clearinghouse for direct deposit transactions. Entries are received and transmitted by them under the rules of the association.
Automated Clearing House (ACH)
37
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.
Back Pay Award
38
Income tax withholding required from nonemployee 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.
Backup Withholding
39
The value of an account, as determined by calculating the difference between the debits and credits in the account.
Balance
40
A financial statement that presents a business's financial position in terms of its assets, liabilities, and owner's equity as of a certain date (generally the end of the company's fiscal year but may be issued quarterly as well).
Balance Sheet
41
When dealing with unemployment compensation, it generally consists of the first 4 of the last 5 quarters immediately preceding the claimant's benefit year.
Base Period
42
The amount is generally one of several criteria used in determining a claimant's eligibility for unemployment compensation. (Earned during Base Period)
Base Period Wages
43
Processing data as a group, either to increase controls or processing efficency.
Batch Processing
44
The right of a business to direct and control the details and means by which a worker performs the work to be done.
Behavioral Control
45
An extra FUTA tax credit reduction that can apply in states in the fourth year of credit reduction (fifth year carrying a FUA loan balance). The added amount is basically designed to bring the five-year average state UI tax rate to at least 2.7%.
Benefit Cost Rate (BCR) Add-on
46
In the context of unemployment compensation, it is a type of experience rating system that bases an employer's unemployment tax rate on the ratio of the employer's benefit charges to its taxable payroll for a specific period of time.
Benefit Ratio
47
In the context of unemployment compensation, it is a type of experience rating system that bases an employer's unemployment tax rate on the ratio of the employer's benefit wages to its taxable payroll for a specific period of time.
Benefit Wage Ratio
48
In the context of unemployment compensation, an amount charged to an employer's account when a former employee receives unemployment benefits. The amount is determined by the base period wages paid by that employer to the claimant.
Benefit Wages
49
In the context of unemployment compensation, the 52-week period beginning on the first day a claim for benefits is filed.
Benefit Year
50
Virtual currency that may be used to pay for various services, including wages paid by employer. It is treated as property for federal tax purposes.
Bitcoin
51
Bureau of Labor Statistics
BLS
52
Refers to actions taken in good faith, without pretense or fraud
Bona Fide
53
For Federal tax purposes, any day that is not a Saturday, Sunday or legal holiday in the District of Columbia.
Business day
54
The outsourcing of end-to-end business processes and functions, including their required support services.
Business Process Outsourcing (BPO)
55
Suite of electronic employer wage reporting and SSN verification options available through the Social Security Administration's website.
Business Services Online (BSO)
56
A cents-per-mile figure issued annually by the IRS. Reimbursements for employee transportation expenses incurred while using their vehicles for business are not included in income up to the business standard mileage rate.
Business Standard Mileage Rate
57
U.S. Circuit Court of Appeals, generally preceded by a number identifying the circuit (e.g. 9th ...)
CA
58
A plan that offers flexible benefits under IRC section 125. Employees choose their benefits from a "menu" of cash and benefits, some of which can be paid for with pretax deductions from wages.
Cafeteria Plan
59
The ability of a cafeteria plan to allow employees to bring up to $550 in salary reduction contributions to their health care flexible spending arrangement to the following year.
Carryover
60
An arrangement under a retirement plan that allows employees to either receive cash or have the employer contribute an equivalent amount to the plan.
Cash or Deferred Arrangement (CODA)
61
Elective deferrals by an employee to a defined contribution retirement plan, IRA, or heath savings account above any statutory or plan-mandated limit.
Catch-up Contributions
62
Chief Counsel Advice
CCA
63
A file maintained by an Automated Clearing House (ACH) that contains depository financial institution names, routing numbers, addresses of contact persons, settlement and delivery information, and output medium requested.
Central Information File (CIF)
64
If a Professional Employer Organization is certified by the IRS, during the life of a contract with a client, they will be treated as the employer (and no other person will be treated as the employer) and the relationship of the client and the Professional Employer Organization will be that of predecessor and successor employers. A certified Professional Employer Organization may assume liability for withholding and filing its clients' employment taxes with respect to all wages paid by the Professional Employer Organization.
Certified Professional Employer Organization (CPEO)
65
Similar to the Consumer Price Index (a measure of the change in prices of certain basic goods and services), but this takes into account the effect of substitutions that consumers make in response to changes in relative prices. It is calculated by the BLS.
Chained Consumer Price Index (C-CPI)
66
Also known as Check 21 - it allows banks to use "substitute" checks and electronic check imaging in clearing paper checks, thus reducing greatly the amount of paper used in the check clearing process.
Check Clearing for the 21st Century Act
67
The process of withholding amounts from an employee's compensation to satisfy an order from a court or a state child welfare administrative agency. The employer is responsible for withholding amounts and paying them over to the party named in the withholding order.
Child Support Withholding
68
IRS Publication 15, Employer's Tax Guide. This publication contains the basic rules, guidelines, and instructions for withholding, depositing, reporting and paying federal employment taxes. Beginning in 2020, the percentage method and wage bracket method withholding tables, as well as the employer instructions on how to figure employee withholding, were moved to IRS Publication 15-T, Federal Income Tax Withholding Methods.
Circular E
69
A provision in an employment contract requiring that an employee return money or benefits received due to special circumstances or events.
Clawback
70
A method of computing where one computer is tied to another and each share a portion of the workload, with the main data storage being on the server.
Client/Server
71
In this environment, the client/employer uses applications hosted by a service provider on the internet to process payroll and stores its data on servers owned by the service provider.
Cloud computing
72
A worker who is an employee under the common law test
Common Law Employee
73
A test that measures the control and direction that an employer has the authority to exercise over a worker. Where the employer has the right to direct the worker as to how, where, and when the work will be completed, in addition to controlling the result of the work
Common Law Test
74
One of two or more related corporations that pays employees who work concurrently for the related corporations. Under this arrangement, the related corporations are treated as a single employer for social security, Medicare, and FUTA tax purposes.
Common Paymaster
75
All cash and noncash renumeration given to an employee for services performed for the employer.
Compensation
76
Paid time off granted to an employee for working extra hours. The Fair Labor Standards Act places severe restrictions on the use of this to avoid paying overtime, although special exemptions are allowed for public sector employees.
Compensatory Time
77
Working for more than one related corporation under a common paymaster arrangement.
Concurrent Employment
78
Federal omnibus legislation containing the Protecting Americans from Tax Hikes (PATH) Act of 2015
Consolidated Appropriations Act 2016
79
Federal law that requires employers with group health care coverage to offer continued coverage to separated employees and other qualifying beneficiaries.
Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA)
80
An IRS rule that considers wages to have been paid to an employee when the employee has access to the wages without substantial limitations or restrictions
Constructive Payment
81
Federal law that restricts the amount of an employee's earnings that can be garnished to pay creditor debts, including child support.
Consumer Credit Protection Act (CCPA)
82
Federal government agency created by financial reform legislation in 2010 that has regulatory authority over direct deposit and electronic payroll cards under the Electronic Fund Transfer Act.
Consumer Financial Protection Bureau
83
A measure of the change in prices of certain basic goods and services (e.g., food, transportation, housing) developed and published by the BLS.
Consumer Price Index (CPI)
84
A group of key or highly compensated employees in a company whose proportion of benefits is limited under the qualification requirements of certain benefit plans (e.g. section 125 or 401(k) plans). Also, employers may not use the commuting valuation method for such employees when determining the value of their personal use of a company-provided vehicle.
Control Group
85
Federal law that prohibits anyone from inducing an employee working on a federally financed project to give back any part of the pay to which the employee is entitled under a federal contract.
Copeland 'Anti-Kickback' Act
86
Legislation providing COVID-19 related relief, including an employee retention credit taht was available for much of 2020 and was extended into 2021.
Coronavirus Aid, Relief, and Economic Security (CARES) Act
87
An adjustment of wages or benefit payments to account for changes in the cost of living, generally based on changes in the Consumer Price Index (CPI)
Cost-of-Living Adjustment (COLA)
88
For each law affecting payroll and human resources, this term defines those workers who are subject to the law
Covered Employees
89
For purposes of the extended leave provisions of the Family and Medical Leave Act, a current member of the U.S. military, and those on the temporary disability retired list, who have suffered a serious injury or illness while on active duty for which they are undergoing medical treatment, recuperation, or therapy, or veterans undergoing medical treatment, recuperation, or therapy for a serious injury or illness who served during the preceding five years.
Covered Servicemembers
90
Certified Public Accountant
CPA
91
Certified Payroll Professional
CPP
92
An accounting entry that increases liabilities and revenues and decreases assets and expenses.
Credit
93
A reduction in the credit an employer receives against FUTA tax owed for state unemployment taxes paid, where the state has not repaid a federal loan under the joint federal/state unemployment compensation program.
Credit Reduction
94
Management strategy that maps out deadlines that must be met to finish a project within the time allowed.
Critical Path
95
Child Support Enforcement Agency
CSEA
96
Bound volumes that were published annually by the IRS and contained information printed in that year's weekly Internal Revenue Bulletins
Cumulative Bulletin (CB)
97
A method of presenting payroll data using easy-to-comprehend charts and graphs showing current state, trend analysis, and future projections.
Dashboard
98
Federal law requiring Labor Secretary to set prevailing wage rates for employees on federally financed construction contracts.
Davis-Bacon Act
99
Anything that is too insignificant to merit legal scrutiny, such as a fringe benefit that is provided occasionally and is too small to justify accounting for or recording it. This does not apply to cash or cash equivalents except in very specific instances such as supper money.
De Minimis
100
A code received by an employer using the Social Security Number Verification Service indicating whether the person associated with the SSN submitted for verification is deceased or not deceased.
Death Indicator
101
An accounting entry that increases assets and expenses and decreases liabilities and revenues
Debit
102
An amount subtracted from an employee's gross pay to reach net pay, or an amount allowed to taxpayers as an offset against income.
Deduction
103
Safe-harbor rules under which IRS requirements regarding the substantiation of amounts spent on employee business expenses are considered to have been met (e.g., per diem allowances).
Deemed Substantiation
104
In general, the postponement of a wage payment to a future date. Usually describes a portion of wages set aside by an employer for an employee and put into a retirement plan on a pretax basis.
Deferred Compensation
105
A retirement plan that uses a formula (generally based on an employee's salary and length of service) to calculate an employee's retirement benefits and is not funded by employee contributions to the plan.
Defined Benefit Plan
106
A retirement plan with benefits determined by the amount in an employee's account at the time of retirement. The account may be funded by contributions from both the employer and the employee.
Defined Contribution Plan
107
An employer plan providing dependent care services or reimbursements for such services.
Dependent Care Assistance Program
108
Term life insurance that gives an employee death benefits should the employee's spouse or other dependents die
Dependent Group-Term Life Insurance
109
A portion of an employee's elective deferrals that the employee elects to contribute to a Roth IRA rather than to the employee's 401(k), 403(b), or 457(b) plan.
Designated Roth Contribution
110
Payments made by an employer to an employee who is serving in the U.S. armed forces to make up the difference between the employee's military pay and his or her regular wages.
Differential Military Pay
111
The electronic transfer of an employee's net pay directly into financial institution accounts designated by the employee, thus avoiding the need for a paycheck.
Direct Deposit
112
A plan for keeping the payroll function operational after a shutdown of the system is caused by a natural or man-made disaster.
Disaster Recovery
113
In the context of employee benefits, favorable treatment of highly compensated employees under an employer's plan.
Discrimination
114
Amounts paid to employees who are terminated from employment, also known as payments in lieu of notice, termination pay, or severance pay.
Dismissal Pay
115
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, attachment, or child support withholding order.
Disposable Earnings
116
Defense of Marriage Act
DOMA
117
Health insurance and other benefits provided to the same-sex partner of an employee by the employee's employer.
Domestic Partner Benefit
118
The act of putting on and taking off clothing, uniforms, protective wear, etc. at work, which may or may not be part of the employee's workday depending on how indispensable it is to the employee's principal work activity.
Donning & Doffing
119
The recording of equal debits and credits for every financial transaction
Double-Entry Accounting
120
The earliest age at which social security retirement benefits can be received - currently age 62. Individual company retirement plans may provide for benefits at an earlier age.
Early Retirement Age
121
A tax credit that is available to low-income employees. It may be taken when the employee files his or her individual tax return.
Earned Income Credit (EIC)
122
Significant tax cut legislation enacted in 2001 that reduced income tax rates and increased pension plan elective deferrals.
Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA)
123
A test used by the Wage and Hour Division in deciding whether a worker is an employee or independent contractor that takes into account whether the worker is "economically dependent" on the business hiring the worker.
Economic Realities Test
124
Electronic Data Interchange
EDI
125
An employer plan providing for payment or reimbursement of an employee's educational expenses.
Educational Assistance Program
126
The Employer Information Report that employers provide to the Equal Employment Opportunity Commission to help the EEOC combat unlawful employment discrimination.
EEO-1 Report
127
Equal Employment Opportunity Commission. This federal agency is responsible for administering and enforcing the Civil Rights Act of 1964, the Age Discrimination in Employment Act of 1967, the Americans with Disabilities Act of 1990, and the Equal Pay Act of 1963.
EEOC
128
An electronic tax payment method that allows an employer to access the Electronic Federal Tax Payment System directly by computer or phone to report its employment tax deposit information
EFTPS-Direct
129
An electronic tax payment option that allows employers to deposit taxes, monitor the status of current deposits, and check their recent payment history over the internet.
EFTPS-Online
130
An Electronic pyament method where an employer instructs its financial institution to originate a federal tax deposit through the ACH system to the U.S. Treasury
EFTPS-Through a Financial Institution
131
Sets of specifications for filing Forms W-2 and W-2c electronically with the Social Security Administration
EFW2, EFW2C
132
The amount of pretax dollars that an employee chooses to have the employer contribute to a qualified deferral compensation plan (e.g., a 401(k) plan) in the employee's behalf, also known as pretax contributions or employer contributions
Elective Deferral
133
System that allows employers to make federal tax deposits electronically through the ACH network.
Electronic Federal Tax Payment System (EFTPS)
134
The process of filing tax and information returns directly from one computer to another.
Electronic Filing
135
The transfer of money electronically from an account in one financial institution to an account in another financial institution
Electronic Funds Transfer (EFT)
136
Electronic payment method that is available for payment of the balance due on employment tax returns, but not for payroll tax deposits.
Electronic Funds Withdrawal (EFW)
137
An order to withhold child support from an employee's wages that is received by the employer electronically.
Electronic Income Withholding Order (e-IWO)
138
A substitute for a paper signature that may carry the same legal effect in the payroll context; it may be accomplished using technologies such as personal identification numbers, biometrics, "click-to-accept" boxes, and electronic pads.
Electronic Signature
139
A process by which an employer's data and processing applications are duplicated at a remote site to make it easier to continue payroll processing in the event of a disaster.
Electronic Vaulting
140
A non-safe harbor method providing limited relief from distribution restrictions for deferred compensation plans with an automatic enrollment feature.
Eligible Automatic Contribution Arrangement (EACA)
141
An individual who performs services for another individual or an organization in return for compensation.
Employee
142
Amounts spent by an employee for travel, lodging, meals, etc., while on the employer's business. Reimbursements for such expenses may be excluded from income if they are properly accounted for.
Employee Business Expenses
143
Federal law regulating the operation of private sector pension and benefit plans
Employee Retirement Income Security Act of 1974 (ERISA)
144
An application that gives an employee access to personal and company data and allows the employee to review, print out, and/or update certain portions of that data. It can be accomplished by phone, at a centralized computer workstation, or on individual personal computers.
Employee Self-Service.
145
A stock bonus plan or combined stock bonus and money purchase plan designed to invest primarily in employer's stock.
Employee Stock Ownership Plan (ESOP)
146
An employer plan under which all employees are given the opportunity to buy the employer's stock at a discount, subject to strict limitations.
Employee Stock Purchase Plan (ESPP)
147
The Federal Form W-4 or an equivalent state or local form on which the employee indicates the adjustments to withholding he or she may claim. Prior to 2020, this was accomplished through an allowance based system, which is still used on some state withholding forms. The form is used by the employer to determine the amount of federal, state, and local income taxes to withhold from the employee's compensation.
Employee's Withholding Certificate
148
An individual or organization that hires individuals to perform services in return for compensation, and that has the authority to control and direct the work of those individuals as part of the relationship.
Employer
149
A letter sent by the SSA to an employer that informs the employer of employee names and social security numbers on Forms W-2 sent to SSA by the employer that do not match SSA's database.
Employer Correction Request Notice (EDCOR)
150
The Employer's account number with the Internal Revenue Service, it consists of nine digits (00-00000000)
Employer Identification Number (EIN)
151
The obligation of an Applicable Large Employer to provide health insurance coverage to its full-time employees and to share the cost of the coverage so that it is affordable for employees.
Employer Shared Responsibility
152
Health coverage provided to employees by their employer, the value of which must be reported on the employee's Form W-2
Employer-Sponsored Health Coverage
153
An IRS program that allows employers with less than $1,000 in annual employment tax liability to file an annual employment tax return rather than quarterly returns, and to pay their employment taxes with the return rather than making periodic deposits.
Employer's Annual Federal Tax Program (EAFTP)
154
IRS Publication 15-A. This publication provides more detailed information for employers than Circular E (Publication 15), especially in the areas of employee status determinations and sick pay taxation and reporting.
Employer's Supplemental Tax Guide
155
IRS Publication 15-B. This publication provides detailed information for employers on fringe benefits that are excluded from employee's income, as well as the valuation, taxation, and reporting requirements for taxable fringe benefits.
Employer's Tax Guide to Fringe Benefits
156
The IRS's electronic filing system for Forms 940, 941 and 944
Employment Tax e-file System
157
The process of determining whether a newly hired employee is authorized to work in the United States under the Immigration Reform and Control Act.
Employment Verification
158
Employer's Tip Reporting Alternative Commitment
emTRAC
159
A test for determining whether an employer's entire operation is covered by the Fair Labor Standards Act. It is based on the employees' involvement in interstate commerce and the employer's annual volume of revenue
Enterprise Coverage
160
A federal law requiring equal pay for men and women performing work requiring equal skill, effort, and responsibility under similar working conditions. It was made part of the FLSA in 1963.
Equal Pay Act (EPA)
161
In the context of payroll, the turning over of unclaimed wages to the state after a period of time determined by state law.
Escheat
162
Electronic Tax Application
ETA
163
A web-based system through which employers can match information provided by new employees on Form I-9 against information contained in the SSA's and USCIS's data bases to verify the employees' employment eligibility
E-Verify
164
An online tool from USCIS that allows individuals to check their employment eligibility status, which gives them the chance to identity data inaccuracies and get them corrected before seeking employment.
E-Verify Self Check
165
The amount of an employee's deferred compensation that exceeds the IRS's annual contribution limit
Excess Deferral
166
While this term can refer to anyone not covered as an employee under a certain law, it generally means those employees that the minimum wage, overtime pay, and certain recordkeeping requirements of the Fair Labor Standards Act do not apply.
Exempt Employee
167
The price an employee pays for a stock when a stock option granted by an employer to an employee is exercised by the employee.
Exercise Price
168
For U.S. payroll purposes, a U.S. Citizen or resident alien who lives and works outside the U.S.
Expatriate
169
In the context of unemployment compensation, it is the employer's past record of unemployment claims activity. This past record can then be used to determine the employer's unemployment tax rate (i.e., the higher the turnover rate, the higher the tax rate).
Experience Rating
170
Unemployment benefits paid beyond the normal 20 or 26 weeks allowed by most states (authorized by federal legislation)
Extended Benefits
171
An Audit of an organization's financial statements by a disinterested third party (e.g., an outside accountant or accounting firm)
External Audit
172
Federal law regulating such areas as minimum wage overtime pay and child labor for employers and employees covered by the law.
Fair Labor Standards Act of 1938 (FLSA)
173
Legislation that required certain employers to provide emergency paid sick leave and expanded family and medical leave for certain COVID-19 related reasons. The requirement to provide the leave expired at the end of 2020, but the tax credits for providing the leave were extended for employers that voluntarily provided the leave in the first quarter of 2021.
Families First Coronavirus Response Act (FFCRA)
174
Law guaranteeing 12 weeks' unpaid leave to most employees to care for newborn or newly adopted children, or to deal with a serious illness or injury suffered by the employee or an ailing child, spouse, or parent of the employee.
Family and Medical Leave Act of 1993 (FMLA)
175
Fixed and variable rate mileage allowance
FAVR
176
IRS Publication 15-T. This publication includes the percentage method and wage bracket method withholding tables, the amount to add to a nonresident alien employee's wages for figuring income tax withholding, and the employer instructions on how to figure employee withholding.
Federal Income Tax Withholding Methods
177
A same-day federal tax payment mechanism for business tax filers and payroll processors using their financial institutions. This works in conjunction with the Electronic Federal Tax Payment System (EFTPS)
Federal Tax Collection Service (FTCS)
178
A federal government funding source that states may borrow from to pay unemployment insurance benefits when their individual state funds have been emptied, generally during periods of economic recession. If states have these loans outstanding for two years, employers in those states can lose some of the credits they get against FUTA taxes for paying their state UI taxes on time.
Federal Unemployment Account (FUA)
179
Federal Insurance Contributions Act. It also describes the combined taxes levied for social security and Medicare
FICA
180
Written advice to IRS field agents and examiners from the IRS Chief Counsel's office to guide them in handling particular factual situations.
Field Service Advice (FSA)
181
The IRS's system for filing information returns (e.g., Forms 1099-MISC) electronically.
Filing Information Returns Electronically (FIRE)
182
Group that sets the standards for sound financial management.
Financial Accounting Standards Board (FASB)
183
The right of a business to direct and control the economic aspects of a worker's job.
Financial Control
184
Reports that summarize a business's financial position and operating results (comprised of a balance sheet, income statement, and statement of cash flow).
Financial Statements
185
Federal Income Tax
FIT
186
Federal Income Tax Withholding, FIT withheld from and employee's wages when they are paid.
FITW
187
The option to choose from a menu of benefits offered by an employer
Flexible Benefits
188
An arrangement that allows an employee to have pretax dollars deducted from wages and put into an account to pay for health insurance deductibles and copayments and dependent care assistance (separate accounts for medical and dependent care).
Flexible Spending Arrangement (FSA)
189
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.
Fluctuating Workweek
190
Fair market value. Used to determine the value of noncash, employer-provided benefits for payroll tax purposes, or the value of facilities provided to employees in lieu of wages.
FMV
191
A country or territory not under the jurisdiction of the U.S. government.
Foreign Country
192
An election by a U.S. citizen or resident alien working abroad to exclude up to a certain amount of foreign earned income from the taxpayer's gross income.
Foreign Earned Income Exclusion
193
An exclusion from income for reasonable foreign housing expenses exceeding a base housing amount that is available to U.S. employees working abroad whose tax home is not in the U.S.
Foreign Housing Cost Exclusion
194
A cash or deferred arrangement that allows employees to authorize their employer to place pretax dollars in a retirement plan that invests the money. The contributions (including those matched by the employer) and any earnings on them are not subject to federal income tax (most state income taxes also) until they are withdrawn.
401k Plan
195
An annuity or mutual fund that provides retirement income for employees of public schools and certain tax exempt organizations.
403b Annunity
196
A deferred compensation plan that provides retirement income for employees of public sector employers (e.g., state and local governments) and certain tax exempt organizations.
457b Plan
197
Compensation other than wages provided to an employee, such as health and life insurance, vacations, employer-provided vehicles, public transportation subsidies, etc. that may be taxable or nontaxable.
Fringe Benefits
198
Federal Tax Deposit
FTD
199
A basic level of payroll certification offered by the American Payroll Association to those who pass a knowledge based examination.
Fundamental Payroll Certification (FPC)
200
An employer's requirement that employees take time off without pay to reduce employment costs.
Furlough
201
Federal Unemployment Tax Act. It requires employers to pay a certain percentage of their employees' wages (up to a maximum wage limit) as a payroll tax to help fund unemployment compensation benefits for separated employees.
FUTA
202
General Accounting Office
GAO
203
Comparison of the functionalities of old and new payroll systems to determine if there are any gaps in the functionality of the new system that need to be addressed before going live.
Gap Analysis
204
In a payroll context, an employer that receives an order requiring withholding from an employee's wages to satisfy a debt. This can also be a debtor against whom a creditor has brought a process of garnishment.
Garnishee
205
A legal proceeding authorizing an involuntary transfer of an employee's wages to a creditor to satisfy a debt.
Garnishment
206
A ledger containing all the transactions in the debit and credit accounts of a business.
General Ledger
207
A set of rules and procedures set forth by the Financial Accounting Standards Board that outline accepted accounting practices broadly and in detail.
Generally Accepted Accounting Principles (GAAP)
208
Payments made to business executives in excess of their usual compensation (e.g., stock options, bonuses) in the event the business is sold and the executives are terminated from employment.
Golden Parachute
209
The world's leading community of payroll leaders, practitioners, researchers, and technology experts.
Global Payroll Management Institute (GPMI)
210
Group that sets the standards for sound governmental financial management.
Governmental Accounting Standards Board (GASB)
211
An extra time period provided for in a cafeteria plan that allows employees with a health FSA to be reimbursed for health care expenses incurred after the end of the plan year. It can be no longer than 2.5 months
Grace Period
212
Software that interacts between the user and the application in a user friendly manner to simplify user tasks and shorten the learning curve. They use a mouse to maneuver around a window.
Graphical User Interface (GUI)
213
INS form I-551, Permanent Resident Card, which entitles the bearer to permanent resident status in the U.S. and provides proof of work authorization and identity under the Immigration Reform and Control Act (formerly known as the Alien Registration Receipt Card)
Green card
214
An IRS approved formula that employers can use to determine the taxable gross payment when the employer wishes to pay the employee's share of tax
Gross-Up
215
An employer plan providing for the advance provision or prepayment of personal legal services for employees and their dependents.
Group Legal Services Plan
216
Term life insurance that is provided to employees, with the cost being borne by the employer, the employee or both
Group-term Life Insurance (GTL)
217
A plan guaranteeing employees their annual income (regardless of the work available) or that they will be kept on the payroll (although possibly at a lower wage)
Guaranteed Annual Wage (GAW)
218
One piece of the health care reform legislation enacted in 2010 (together with the Patient Protection and Affordable Care Act, known as the Affordable Care Act).
Health Care and Education Reconciliation Act (HCERA)
219
Federal and state exchanges where individuals can purchase health coverage and receive subsidies if they cannot get affordable health coverage through their employer.
Health Care Marketplace
220
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 and protecting the privacy of health care information.
Health Insurance Portability and Accountability Act (HIPAA)
221
An employer funded arrangement under which the employer reimburses an employee and the employee's spouse and dependents for medical care expenses up to a maximum dollar amount for the coverage period.
Health Reimbursement Arrangement (HRA)
222
Tax exempt trusts or custodial accounts created exclusively to pay for the qualified medical expenses of the account holder (e.g. employee) and his or her spouse and dependents
Health Savings Account (HSA)
223
Hospital Insurance (the Medicare component of FICA)
HI
224
A safe-harbor method (deemed substantiation) for reimbursing lodging, meal, and incidental expenses incurred by an employee who is traveling overnight on the employer's business.
High-Low Substantiation Method
225
In the context of certain fringe benefit plans, an employee who is an owner or officer of a business or whose salary exceeds a certain amount (indexed each year for inflation). Many benefits offered by employers do not qualify for favorable tax treatment if they discriminate in favor of these. In the context of overtime requirements under the FLSA, an employee who earns more than $107,432 in annual compensation.
Highly Compensated Employee (HCE)
226
Payment made to a U.S. citizen or resident alien working abroad to make up the added cost of obtaining reasonable living quarters in a foreign country
Housing Allowance
227
Human Resource Information System
HRIS
228
Human Resource Management System
HRMS
229
A free online resource center provided by U.S. Citizenship and Immigration Services for employers and employees that provides access to resources, tips, and guidance to properly complete Form I-9, Employment Eligibility Verification
I-9 Central
230
Law enacted in 1996 that amends IRCA by reducing the number of documents that employers must accept to prove a new hire's identity and work authorization
Illegal Immigration Reform and Immigrant Responsibility Act of 1996 (IIRIRA)
231
Agency of the Department of Homeland Security that enforces the prohibition against the hiring of unauthorized aliens by U.S. employers.
Immigration and Customs Enforcement (ICE)
232
Law enacted in 1986 that prohibits employers from hiring persons who are not authorized to work in the U.S. and from discriminating against those who are based on their national origin or citizenship. It is part of the Immigration and Nationality Act.
Immigration Reform and Control Act of 1986 (IRCA)
233
The addition of the value of cash/noncash compensation to an employee's taxable wages in order to properly withhold income and employment taxes from the wages.
Impute
234
A stock option plan that gives an employee the opportunity to buy the employer corporation's stock at a fixed price for a certain period of time, and that offers favorable tax treatment if certain conditions are met.
Incentive Stock Option (ISO)
235
A financial statement showing a company's results of operations for an accounting period or fiscal year.
Income Statement
236
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.
Income Tax Treaties
237
A nonemployee contracted by a business to perform services. Although the business specifies the result of the work to be performed, it has no right to control the details of when, how, or who will ultimately perform the work.
Independent Contractor
238
A trust created or organized for the exclusive benefits of an individual or his or her beneficiaries
Individual Retirement Arrangement (IRA)
239
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.
Individual Taxpayer Identification Number (ITIN)
240
A return sent to the IRS (e.g., 1099 series) or the SSA (e.g., Form W-2, Copy A along with Form W-3) that indicates information relevant to tax liability.
Information Return
241
A statement sent to a payee (e.g. 1099 series) or an employee (e.g. Form W-2) that indicates payments made and taxes withheld by the party issuing the statement.
Information Statement or Payee Statement
242
Allows participants in 401k, 403b, and governmental 457b plans with qualified designated Roth contribution program to roll over amounts distributed from those plans to designated Roth accoutns.
In-Plan Roth Rollover
243
in the employment context, a telephone system that allows employees to make changes by touch-tone phone to their payroll and personal data.
Interactive Voice Response (IVR)
244
An audit of a business's policies, procedures, operations, and records carried out by employees of the business as opposed to outside parties.
Internal Audit
245
Measures used by a company to safeguard company assets by preventing errors, waste, embezzlement, and fraud.
Internal Control
246
An interpretation of a point of tax law designated for internal use by the IRS.
Internal Legal Memorandum (ILM)
247
Issued regularly (weekly except during the summer) by the IRS, this contains recently issued regulations, revenue procedures, and other agency announcements.
Internal Revenue Bulletin (IRB)
248
Federal tax laws. From 1986 which was the year of the latest major overhaul of the Code. The IRC also comprises Title 26 of the United States Code.
Internal Revenue Code (IRC) of 1986
249
Federal agency charged with interpreting, implementing, and enforcing the tax laws of the U.S.
Internal Revenue Service (IRS)
250
Law enacted in 1998 to reform the governance structure of the IRS to make it more responsive to taxpayers and to promote electronic filing of information.
Internal Revenue Service Restructuring and Reform Act of 1998
251
Electronic funds transfer that requires special coding to identify international transactions that might be used to fund criminal activity.
International ACH Transaction (IAT)
252
The exchange of goods and/or services across state lines. It provides a basis for congressional and federal government agency regulation of wages and hours of work and other employment-related matters.
Interstate Commerce
253
A record of financial transactions that debit or credit an account.
Journal
254
in the context of certain fringe benefit plans, an officer or owner (of all or a significant part) of a business whose annual pay exceeds a certain amount. Many benefits offered by employers do not qualify for favorable tax treatment if they discriminate in favor of key employees. In the context of the FMLA, a high salaried employee who may not be entitled to reinstatement after FMLA leave if doing so would cause the employer serious economic injury.
Key Employee
255
A centrally located, specialized workstation located for easy employee access, where employees can inquire about and modify their payroll and personal data, as well as view company-provided information.
Kiosk
256
Online tool for employees and managers with payroll-related responsibilities to assess the employees' strengths and weaknesses and recommend training offerings from the American Payroll Association that address those shortcomings.
Knowledge Assessment Calculator (KAC)
257
Employees of a leasing agency who are hired and trained for the client firm through the agency. Withholding, depositing, and reporting responsibilities remain with the leasing agency.
Leased Employees
258
An arrangement allowing employees to donate paid leave days to a leave bank for use by employees who need to use the leave for medical emergencies or in the event of a natural disaster.
Leave-sharing Plan
259
An attachment to satisfy a tax debt or a court judgement
Levy
260
Debts of a business that have yet to be paid.
Liabilities
261
Items provided to employees for business use but that easily lend themselves to personal use. Employers must adhere to strict substantiation of the business use of these items so the business use can be excluded from employees' income.
Listed Property
262
A network in which all computers are physically attached to each other and data are transmitted at high speeds over short distances.
Local Area Network (LAN)
263
An employee who works in the country where his home base is located, even though the employee may actually be a citizen of another country.
Local National
264
A notice sent by the IRS to an employer that tells the employer how many withholding adjustments an employee can claim on his or her Form W-4
Lock-in Letter
265
A job assignment that is realistically expected to last more than 12 months.
Long-Term Assignment
266
An insurance contract providing for coverage of qualified extended care services, including diagnostic, preventive, treating, mitigating and rehabilitative services, which is treated as an accident and health insurance contract for payroll tax purposes.
Long-Term Care insurance
267
a way for an employer to determine the status of an employee as a full time employee for purposes of computing liability for an employer shared responsibility payment under the ACA
Look-back Measurement Method
268
The 12-month period ending June 30 of the preceding calendar year, for employers filing Form 941. The employer's payroll tax liability during this period determines its depositor status for the current year. The period may be different for some employers.
Lookback Period
269
In the context of child support withholding, these are irregular or one-time payments to employees (e.g. bonuses, severance pay, leave payouts, insurance settlements, stock options, awards, etc.) that the U.S. DOL has ruled are subject to the withholding maximums contained in the Consumer Credit Protection Act.
Lump Sum Payments
270
Large, powerful computer that is generally used for companywide computing since it can handle multiple users and tasks at the same time.
Mainframe
271
Matching revenue earned during an accounting period with the expenses incurred in generating the revenue
Matching Principle
272
The percentage of premium revenue that a health insurance carrier is required to spend on medical care and quality improvement activities rather than administrative costs under the ACA.
Medical Los Ratio (MLR)
273
An amount that must be paid by health insurance carriers that do not meet the medical loss ratio standard to their customers
Medical Loss Ratio Rebate
274
An arrangement through which an employer or an employee (but not both) can put tax-preferred contributions into an account for the payment of health care deductibles under a high deductible health insurance plan.
Medical Savings Account (MSA)
275
The process of withholding amounts from an employee's compensation to satisfy a medical support order from a court or a state child welfare administrative agency. The employer is responsible for withholding the amounts and paying them over to the party named in the medical support withholding order.
Medical Support Withholding.
276
A federal hospital insurance program for individuals age 65 or older and some disabled persons. It is funded through the hospital insurance (HI) component of FICA tax.
Medicare
277
Federal legislation that continued the reduction in the employee social security tax rate from 6.2% to 4.2% for the remainder of 2012 after the Temporary Payroll Tax Cut Continuation Act of 2011 expired on February 29, 2012.
Middle Class Tax Relief and Job Creation Act of 2012 (Tax Relief Act of 2012)
278
Smaller than a mainframe computer, but they can still handle multiple users and tasks on a more limited basis, often used to handle departmental computing needs in large organizations.
Minicomputer
279
The minimum health insurance benefits that an Applicable Large Employer must provide its full-time employees and their dependents under the ACA.
Minimum Essential Coverage (MEC)
280
Under the ACA, a health insurance plan provides minimum value if it covers at least 60% of the total allowed cost of benefits that are expected to be incurred under the plan
Minimum Value Coverage.
281
The lowest amount that an employer can pay its employees per hour under federal or state law.
Minimum Wage
282
An electronic file processing platform for the 94x family of business returns that replaced the legacy platform for the Employment Tax e-File System in 2016
Modernized e-File (MeF)
283
A state that administers workers' compensation premiums and benefits solely through a state fund, prohibiting employers from purchasing insurance from a private insurance carrier.
Monopolistic State
284
A way for an employer to determine the status of an employee as a full-time employee for purposes of determining the employer's status as an Applicable Large Employer or for calculating the employer's liability for an employer shared responsibility payment under the ACA.
Monthly Measurement Method
285
A payroll services company that pays at least 80% of its wages to motion picture project workers.
Motion picture payroll services company
286
Medicare Qualified Government Employee, who only has the Medicare component of FICA, but not social security, withheld from wages.
MQGE
287
A report developed by the Bureau of Labor Statistics to help it collect statistical information on U.S. businesses with multiple worksites.
Multiple Worksite Report (MWR)
288
A retirement savings program established by the U.S. Treasury for people who do not have access to an employer sponsored retirement plan or who have found it difficult to begin saving for retirement. The program was ended in 2017 and new enrollees were no longer accepted.
myRA
289
an association that manages the development, administration, and rules for the ACH network.
The National Automated Clearing Hours Association (NACHA)
290
For workers' compensation purposes, states that adhere to the uniform classification codes in the Basic Manual for Worker's Compensation, published by the National Council on Compensation Insurance.
National Council States
291
document provided by a state child support agency to an employer requiring that an employee's child be enrolled in medical insurance coverage provided by the employer and that an amount be withhold from the employee's wages to pay premiums for the coverage.
National Medical Support Notice (NMSN)
292
An intensified employment tax audit program conducted by the IRS that is used to compile statistical data related to employment tax noncompliance and its effect on the tax gap.
National Research Program
293
An employer whose state unemployment tax payments are less than the benefits charged to its unemployment reserve account.
Negative Account Employer
294
a salary deferral to fund pre-tax employee benefits that is begun without the employee making an affirmative election to begin the deferral
Negative Election
295
That part of an employee's wages that remains after all deductions have been subtracted (e.g. taxes, health insurance premiums, union dues, etc.)
Net Pay
296
System connecting computers and applications that consists of the physical connection (topology) and the software.
Network
297
The reporting of a newly hired and rehired employees to state agencies to facilitate the collection of child support and/or to uncover abuse in the state's unemployment compensation, workers' compensation, or public assistance programs.
New Hire Reporting
298
National Labor Relations Board
NLRB
299
A tax-free fringe benefit for employees consisting of free services offered by an employer at no substantial additional cost to the employer.
No-Additional-Cost Services.
300
A letter sent by the SSA to an employer that informs the employer of employee names and social security numbers on Forms W-2 sent to SSA by the employer that do not match SSA's data base. Beginning in 2019 SSA began referring to these as Employer Correction Request Notices (EDCOR)
No-match Letter
301
An employer's business expense reimbursement plan that does not meet the requirements regarding business connection, substantiation, and returning excess amounts. Payments made under the plan are included in employees' income.
Nonaccountable Plan
302
Benefits provided to employees in some form other than cash (e.g. company car, heath and life insurance, parking facility, etc.) which may be taxable or nontaxable
Noncash Fringe Benefits
303
An employer provides something to an employee for a no payment business reason if it is provided to help the employee perform services for the employer, not to give the employee extra compensation for services or as an enticement to take a job with or remain working for the employer.
Non compensatory Business Reason
304
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.
Nondiscrimination Testing
305
Employees who are covered by the minimum wage and overtime provisions of the Fair Labor Standards Act. They may be paid on an hourly or salary basis.
Nonexempt Employees
306
In the context of employee benefits, an employer retirement plan that does not meet IRS qualification requirements.
Nonqualified Plan
307
An individual from a foreign country working in the U.S. who does not pass either the "green card" or "substantial presence" residency test, but is subject to federal income tax on U.S. source income.
Nonresident Alien
308
A stock option plan that gives an employee the opportunity to buy the employer corporation's stock at a fixed price for a certain period of time, without the conditions that apply to an incentive stock option.
Nonstatutory Stock Option ('NSO)
309
Amount of an employer's required contributions paid timely into a state unemployment insurance fund, to a maximum of 90% of the employer's basic federal unemployment tax rate, taken as a credit against the employer's federal unemployment tax.
Normal Credit
310
The age at which retirees may receive unreduced social security benefits. Individual company retirement plans may use a different age.
Normal Retirement Age
311
Old Age Survivors and Disability Insurance also known as social security
OASDI
312
U.S. Supreme Court decision in Obergefell v. Hodges, in which the Court ruled that it is unconstitutional for states not to license and recognize same sex marriages.
Obergefell Decision
313
A person to whom a debt is owed.
Obligee
314
A person who owes a debt
Obligor
315
Office of Child Support Enforcement
OCSE
316
Office of Management and Budget
OMB
317
Nonwork time during which employees are required to be available to handle job-related emergencies.
On-Call Time
318
Processing performed under direct control of the computer (can be batch or realtime)
Online Processing
319
The computer program that controls the basic operations of a computer (e.g. Windows, UNIX)
operating system
320
A reduced minimum wage that can be paid to teenagers during their first 90 days at work.
Opportunity Wage
321
A financial institution that is qualified to initiate deposit entries submitted by an employer as part of the direct deposit process.
Originating Depository Financial Institution (ODFI)
322
Occupational Safety and Health Administration.
OSHA
323
Compensation not subject to federal income tax withholding that an employer must report on an employee's W-2 in Box 1
Other compensation
324
For unemployment insurance tax calculation purposes, wages paid to an employee in another state before transferring to the employee's current state of employment.
out-of-state wages
325
Services provided by employers to help employees find a new job after a layoff or reduction in force.
Outplacement Services
326
Hours worked in excess of maximums set by federal or state law that must be compensated at a premium rate of pay (e.g. under the FLSA, all hours over 40 in a workweek must be paid at no less than 1.5 times the employee's regular rate of pay)
Overtime
327
The assets of a company minus its liabilities
Owner's Equity
328
A financial institution that can accept direct deposits and transmit or receive entries
Participating Depository Financial Institution (PDFI)
329
One piece of the health care reform legislation enacted in 2010 (together with the Health Care and Education Reconciliation Act, known as the ACA)
Patient Protection and Affordable Care Act (PPACA)
330
Stored value debit cards that are funded by employers with employees' net pay. Employees can access their net pay by using the cards to make purchase or withdraw cash.
Paycards
331
An entity requested by an employer to be authorized by the IRS to act on the employer's behalf with respect to federal income tax withholding and social security and Medicare taxes under IRC section 3504
Payer Agents
332
A program administered by the U.S. DOL's Wage and Hour Division to facilitate resolution of potential FLSA minimum wage and overtime violations.
Payroll Audit Independent Determination Program (PAID)
333
The period of service for which an employer pays wages to its employees.
Payroll Period
334
A report listing and summarizing the compensation paid and deductions taken from each employee's wages for the payroll period.
Payroll Register
335
An entity that performs one or more payroll-related services to employers, including payroll calculation, paycheck and pay statement printing, tax filing, garnishments, and more.
Payroll Service Provider (PSP)
336
A tax levied by a government agency on employees' wages, tips, and other compensation.
Payroll Tax
337
The company that administers the Certified Payroll Professional and Fundamental Payroll Certification exams
Pearson VUE
338
a flat rate of reimbursement for business expenses (e.g. meals, lodging, and incidentals) incurred by employees while traveling overnight on business.
Per Diem
339
One allowable method for calculating federal income tax withholding from an employee's wages, most often used when the calculation is automated.
Percentage Method of withholding
340
Computers that are designed for personal use by having all the computer functionality, operating systems, and applications self-contained.
Personal Computer (PC)
341
Personally Identifiable Information
PII
342
An employer whose state unemployment tax contributions are more than the benefits charged to its unemployment reserve account
Positive Account Employer
343
Time spent by employees to get ready for work or to get ready to leave work, which is generally not compensable time unless the activities are essential to the employee's principal work activity
Preliminary and Postliminary Activities
344
In a payroll context, it can have two meanings. It can be the extra pay above an employee's regular rate of pay that is paid for working overtime hours. Or it can be a special pay rate for work done on weekends, on holidays, during undesirable shifts, or for doing dangerous work.
Premium Pay
345
A deduction taken from gross pay that reduces taxable wages.
Pretax Deduction
346
A private sector company that delivers packages. If their services are "designated" by the IRS, materials delivered to them by a taxpayer for delivery to the IRS are considered postmarked on the date the delivery to this entity is recorded on their database or marked on the package.
Private Delivery Service (PDS)
347
A ruling provided by the IRS when requested by a taxpayer who wants to know how the tax law apply to a particular factual situation. The ruling applies only to the taxpayer requesting it, and cannot be relied on by other taxpayers.
Private Letter Ruling (PLR)
348
An employee leasing firm that arranges with clients to lease their employees back to the client and handle all payroll and human resources functions for the client.
Professional Employer Organization (PEO)
349
Federal law that accelerated the W-2 filing deadline to January 31, established a safe harbor for small money amount errors on Forms W-2 and 1099, and established permanent parity between the monthly maximums for parking and mass transit benefits.
Protecting Americans from Tax Hikes (PATH) Act of 2015
350
An employer that is a state or local governmental unit (e.g. county, town, village) or a political subdivision of such a unit (e.g. school district, sewer district)
Public Sector Employer
351
A safe-harbor method for deferred contribution retirement plans that provide for automatic contributions to meet applicable nondiscrimination tests.
Qualified Automatic Contribution Arrangement (QACA)
352
A benefit plan that meets IRS requirements for tax-favored treatment (e.g. nondiscrimination)
Qualified Plan
353
A distribution to an employee of all or a portion of the employee's health Flexible Spending Account balance for non-medical expenses. The distribution is subject to special treatment because the employee is a military reservist called to active duty for at least 180 days.
Qualified Reservist Distribution
354
Certain retirement planning advice or information provided by an employer, the value of which is excluded from employees' income if it is provided in a nondiscriminatory manner.
Qualified Retirement Planning Service
355
Small employer (non-ALEs) that do not offer health insurance to their employees may offer this to employees who purchase their own health plan.
Qualified Small Employer Health Reimbursement Arrangement (QSEHRA)
356
Certain employer-provided benefits that can be excluded from employees' income up to certain annually adjusted limits (i.e. transit passes, vanpools, parking)
Qualified Transportation Fringe
357
one of several events that results in the loss of group health insurance coverage for employees or their dependents and entitles them to continued coverage under COBRA 1985.
Qualifying Event
358
A circumstance related to the active duty or a call to active duty of a member of the U.S. military that allows the spouse, son, daughter, or parent of the military member to take leave under the FMLA.
Qualifying Exigency
359
A collaborative program involving the IRS, DOL and state agencies to identify employment tax avoidance schemes and increase voluntary compliance.
Questionable Employment Tax Practice Initiative (QETP)
360
Federal law that established a national railroad retirement program similar to social security for railroad employees.
Railroad Retirement Tax Act (RRTA)
361
The process by which the Social Security Administration issues social security numbers, which is a change begun in mid-2011 form the previous system, which was based on where the SSN application was filed.
Randomization of SSNs
362
A standard used to determine whether a worker can be treated as an independent contractor whether or not the common law test is met, based on prior court and administrative rulings, IRS audits, or long-standing practice in the industry.
Reasonable Basis Test
363
A financial institution that qualifies to receive direct deposit entries from an Automated Clearing House.
Receiving Depository Financial Institution (RDFI)
364
In payroll, a relationship between states under which privileges granted by one are returned by the other (e.g. reciprocal enforcement of child support orders, reciprocal agreements not to tax nonresidents working in a state)
Reciprocity
365
The process of ensuring that amounts withheld, deposited, paid and reported by employers agree with each other and that if they do not, determining the reasons and making the necessary corrections.
Reconciliation
366
An initiative from U.S. Citizenship and Immigration Services to help validate the authenticity of driver's licenses used by employees as Form I-9 identity documents. The program was discontinued in FY 2018
Records and Information from DMVs for E-verify Program (RIDE)
367
An hourly pay rate determined by dividing the total regular pay actually earned for the workweek by the total number of hours worked.
Regular Rate of Pay
368
The means by which government agencies administer and enforce laws (e.g. rules issued by the IRS to enforce tax laws)
Regulations
369
A federal law prohibiting discrimination against qualified disabled individuals by federal government contractors and grantees.
Rehabilitation Act of 1973
370
An unemployment insurance financing system that allows employers to pay back to the state unemployment trust fund any benefits paid to their former employees, rather than paying a tax based on their experience rating. This form of financing is most often used by nonprofit groups and public sector employers.
Reimbursement Financing
371
A group of corporations meeting certain common ownership and concurrent employment requirements that may be treated as one employer for social security, Medicare and FUTA purposes.
Related Corporations
372
A file management system that organizes data into a series of tables, each containing a series of related data in columns and rows.
Relational Data Base (RBD)
373
An Entity that has a signed Form 8655, for each of its employer-clients authorizing them to deposit and pay employment taxes and file employment tax returns on the clients' behalf.
Reporting Agent
374
In the context of unemployment compensation it is a type of experience rating system that bases an employer's unemployment tax rate on the ration of taxes less benefits to taxable payroll.
Reserve Ratio
375
In the context of payroll, an individual who passes either the "green card" OR "substantial presence" test for determining resident status in the U.S. They are generally subject to federal income tax withholding and social security and Medicare taxes on the same basis as U.S. citizens
Resident Alien
376
Official Statements from the IRS on how to carry out tax compliance
Revenue Procedures (Rev. Proc.)
377
Published decisions issued by the IRS that apply the tax laws to a particular set of facts. They can be used by taxpayers to determine their tax liability in similar factual situations.
Revenue Rulings (Rev. Rul.)
378
An individual retirement arrangement to which nondeductible contributions may be made (subject to certain AGI phase-outs), and the distributions from which are generally nontaxable.
Roth IRA
379
An IRS approved alternative method (usually a short-cut) for complying with IRS rules, regulations, and procedures (e.g. per diem allowances and high-low substantiation)
Safe-harbor
380
A method for settling payments submitted to the ACH system on the date of submission if they are submitted by a certain time.
Same-Day ACH
381
Law passed in response to corporate financial scandals that imposes requirements on publicly held companies designed to restore investor and public confidence in corporate financial management.
Sarbanes-Oxley Act
382
Retirement plans for employees of small employers (no more than 100 employees) that have simpler administrative and nondiscrimination requirements than other retirement plans.
Savings Incentive Match Plans for Employees of Small Employers (SIMPLE Plans)
383
State Disability Insurance
SDI
384
A basic principle of internal control that prevents individuals from having responsibility for all phases of a job process, thus guarding against misuse or misappropriation of company assets.
Segregation of Duties
385
This law requires individuals to pay both the employer and employee share of social security and Medicare taxes.
Self-Employment Contributions Act (SECA)
386
An opinion on a point of tax law as applied to a specific set of facts provided to IRS from the IRS Chief Counsel's office.
Service Center Advice (SCA)
387
An extra amount added to a customer's bill for services provided that is not optional for the customer. This is not a tip and must be treated as wages when distributed to the employees.
Service Charge
388
An independent company that processes its clients' payrolls for a fee, or handles one or more parts of its clients' payroll process (i.e. tax filing, garnishments).
Service Provider
389
A payment offered by some employers to terminated employees (usually those who are terminated through no fault of their own) that is designed to tide them over until new employment is secured.
Severance Pay
390
The consolidation of related functions and integration of the processes involved with them throughout an entire organization
Shared Services
391
Extra pay received by employees for working a less-than-desirable shift (e.g. evenings or late nights)
Shift Differential
392
A job assignment that is realistically expected to and in fact does last less than 12 months
Short-Term Assignment
393
State Income Tax
SIT
394
The federal government agency that administers social security
Social Security Administration (SSA)
395
An individuals taxpayer identification number it consists of nine digits (000-00-0000)
Social Security Number (SSN)
396
An internet based service taht allows employers to verify employees' names and social security numbers by keying them in or uploading a file.
Social Security Number Verification Service (SSNVS)
397
A model for delivering payroll services under which the service provider houses the software programs for processing and the client/employer accesses them through the internet
Software-as-a-Service (SaaS)
398
A safe-harbor rule that allows employers to treat certain noncash fringe benefits provided to employees in November or December as received in the following year. If an employer uses this the employee must also report the benefit for the same period.
Special Accounting Rule
399
Payments made to employees or former employees for services performed in an earlier year. These payments require special reporting by employers so that retirees' social security benefits are not reduced under the annual earnings test because of amounts earned in prior years.
Special Wage Payments
400
An arrangement where an employer pays that part of an annual life insurance premium representing the increase in the case surrender value of the policy during the year, while the employee pays the remainder of the premium.
Split-dollar Life Insurance
401
A workday that is divided into two parts separated by a spread of hours longer than the conventional rest or meal period.
Split Shifts
402
A cents-per-mile rate used to value non-commercial flights for purposes of including the personal use of corporate aircraft in an employee's income.
Standard Industry Fare Level (SIFL)
403
A centralized location for the collection and disbursement of withheld Child support payments throughout a state.
State Disbursement Unit (SDU)
404
A report from a third-party vendor written by an independent auditor that describes the vendor's internal control procedures and their effectiveness after testing.
Statement on Standards for Attestation Engagements (SSAE) 16 Report
405
A period of time established by law during which parties can take legal action to enforce their rights.
Statute of Limitations
406
Special groups of employees identified by law (e.g. full-time life insurance salespeople, certain homeworkers) whose wages are not subject to FITW, but are subject to FICA and FUTA
Statutory Employees
407
An entity that is not the common law employer but that has control of the payment of wages, so it is considered the employer for income tax withholding purposes under IRC Section 3401 (d) (1)
Statutory Employers
408
Special groups of workers who may qualify as common law employees but are treated under the law as independent contractors (e.g. qualified real estate agents, and direct sellers) whose compensation is not subject to federal income tax withholding or employment taxes.
Statutory Nonemployees
409
An Incentive Stock Option or an option exercised under an employee stock purchase plan
Statutory Stock Option
410
The standard number of work hours during a workweek for which an employee's regular rate of pay will be paid.
Straight Time
411
In the context of reimbursed employee business expenses, the requirement that employees keep records of the time, place, and business purpose of reimbursable expenses they incur, including receipts (also used to track business use of company - provided vehicles)
Substantiation
412
Tax forms that are printed by private printers rather than the Internal Revenue Service. They must meet certain specifications to be acceptable for filing.
Substitute Forms
413
The irregular and occasional payment of amounts to employees who work late to cover the cost of meals eaten during that extra working time.
Supper Money
414
State Unemployment Insurance
SUI
415
Employer plans that provide supplements to state unemployment compensation benefits.
Supplemental Unemployment Benefits (SUB)
416
Compensation received by employees other than their regular pay, such as bonuses, commissions, and severance pay. Income tax may be withheld from such payments at a flat rate under certain circumstances.
Supplemental Wages
417
An illegal practice of manipulating state unemployment insurance rates to achieve a lower employer tax rate, generally by forming a new company and transferring employee to that company, which has a lower "new employer" UI rate.
SUTA Dumping
418
Refers to IRS Uniform Premium this, which is used to calculate the value of group term life insurance over $50,000.
Table I
419
In the context of a federal tax levy, the amount of an employee's wages that remains after all normal deductions in effect at the time of the levy have been subtracted.
Take-Home Pay
420
Technical and Miscellaneous Revenue Act of 1988
TAMRA '88
421
Sweeping tax reform legislation that temporarily lowers tax rates, eliminates the personal exemption, and suspends the fringe benefits for moving expense reimbursements (except for certain military related moves) and bicycle commuting costs. Most of the provisions of this are effective for tax years 2018-2025
Tax Cuts and Jobs Act (TCJA)
422
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.
Tax Equalization Plan
423
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 Protection Pan
424
Sweeping tax reform legislation that lowered tax rates and sought to eliminate many of the loopholes in the tax laws.
Tax Reform Act of 1986 (TRA'86)
425
The maximum amount of employee compensation subject to social security, FUTA, and state unemployment insurance taxes.
Taxable Wage Base
426
Legislation intended to redesign the IRS. A provision in the legislation reduces the electronic filing threshold for certain information returns from 250 forms for forms filed in 2021 and then to 10 forms thereafter. The legislation leaves the implementation of the new threshold to Treasury and the IRS.
Taxpayer First Act of 2019
427
A social security number or employer identification number, which serves as the taxpayer's account number with the IRS.
Taxpayer Identification Number (TIN)
428
Tax Equity and Fiscal Responsibility Act of 1982
TEFRA
429
Workers hired through temporary help agencies who are screened and trained by the agency to provide services for client firms. They are employees of the agency, rather than the client firm.
Temporary Help Agency Employees
430
In the context of U.S. payroll, someone who is a non-U.S. citizen working in a country other than the U.S.
Third Country National
431
An individual authorized by an employer to correspond with the IRS regarding the completion and processing of an employment tax return (e.g. Form 940, 941, 945)
Third Party Designee
432
Payments made by a third party, such as a state or private insurer, to employees because of nonjob related illness or injury
Third Party Sick Pay
433
Payments of 1.5 times an employee's regular rate of pay for hours worked over 40 in a workweek, as required by the Federal Wage Hour Law (for nonexempt employees only).
Time and a Half
434
Showing less than an entire TIN on an information return or payee statement (e.g. Form 1099-MISC, W-2) in order to prevent identity theft
TIN-Masking
435
A reduction in the cash minimum wage that must be paid to tipped employees, whose tips are expected to make up the remainder.
Tip Credit
436
This occurs when tipped employees put the tips they receive from customers into a common "pool" that is then divided up among the employees who are part of the arrangement.
Tip-Pooling Arrangement
437
An agreement by an employer with the IRS on a certain percentage and a requirement that 75% of the tipped employees agree to report at least the tip percentage found in the agreement.
Tip Rate Determination Agreement (TRDA)
438
An agreement between a hospitality employer and the IRS that bases FICA assessments on employee audits and requires the employer to educate its employees on tip reporting.
Tip Reporting Alternative Commitment (TRAC)
439
The employment discrimination portion of the Civil Rights Act of 1964, which prohibits job bias based on race, sex, color, religion, or national origin.
Title VII
440
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.
Totalization Agreements
441
A financial services website that allows individuals to buy Treasury securities direct from the U.S. Department of the Treasury, including savings bonds, in electronic form. The bonds can be purchased through payroll deductions.
Treasury Direct
442
An Individuals SSN, individual TIN, or adoption taxpayer Identification number, or an entity's employer identification number in which the first 5 digits of the 9 digit number are replaced with Xs or asterisks. This takes the same format of the identifying number it replaces for example XXX-XX-1234 when replacing an SSN, or XX-XXX1234 when replacing an EIN.
Truncated Taxpayer Identification Number (TTIN)
443
Shortening or masking a TIN
Truncation
444
The amounts withheld by employers for employees' pay for federal income, social security, and Medicare taxes. They are referred to their name 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.
Trust Fund Taxes
445
An agreement between a state or local government employer and the state social security agency under which the employees are subject to social security and Medicare coverage.
Section 218 Agreement
446
Unemployment Insurance
UI
447
Model state child support enforcement law under which employers must put into effect a child support withholding order form another state's child support enforcement agency if the order appears "regular on its face."
Uniform Interstate Family Support Act (UIFSA)
448
Federal law guaranteeing among other things, the right of U.S. veterans to make additional elective deferrals under their employer's 40411k plan for the time they spent in military service.
Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA)
449
A requirement that employers provide an equal opportunity for employees to make elective deferral contributions.
Universal Availability
450
United States Code, where federal laws are compiled
USC
451
A federal government agency, part of the Homeland Security Department, to which the employment eligibility functions of the Immigration and Naturalization Service were transferred in 2003
U.S. Citizenship and Immigration Services (USCIS)
452
A category of qualified transportation fringe benefit that involves an employer providing transportation from home to work in a commuter highway vehicle, the value of which is not taxable to the employees in the vehicle up to the monthly maximum.
Vanpool
453
A request sent by a state child support enforcement agency to an employer to confirm employment information for a employee who has been ordered to provide child support.
Verification of Employment (VOE)
454
A form developed by OCSE that states may accept from employers that are answering verification of employment requests. the hope is that standardization of the elements needed to respond would reduce the administrative burden on employers.
Verification of Employment Response Form
455
An IRS program that allows employers to reclassify workers as employees for federal employment tax purposes with limited liability for the past nonemployee treatment.
Voluntary Classification Settlement Program (VCSP)
456
Advance payments of unemployment tax that can reduce an employer's state unemployment tax rate.
Voluntary Contribution
457
A voluntary agreement by an employee to transfer portions of future wage payments (e.g. insurance premium deductions, credit union deductions)
Wage Assignment
458
An involuntary transfer of an employee's wage payment to satisfy a debt.
Wage Attachment
459
A procedure for calculating the amount of federal income tax to be withheld from an employee's wages based on this method's tables classified by the employee's filing status and payroll period.
Wage Bracket Withholding Method
460
A periodic report (e.g. quarterly) from employers to state unemployment agencies containing employee's names, total wages and unemployment taxable wages.
Wage Continuation Sheet
461
State agency directives that set wage and hour standards, usually for specific industries.
Wage Orders
462
Workers' Compensation
WC
463
An application that use the internet as another means of accessing an organization's data and the HRMS application logic itself
Web-Enabled Application
464
In the context of the Federal Wage Hour Law, these are executive, administrative, professional (including computer-related professionals), or outside sales employees who are exempt from the law's minimum wage, overtime pay, and certain recordkeeping requirements.
White Collar Employees
465
A network in which information is transmitted over long distances at relatively slower speeds using telephone lines.
Wide Area Network (WAN)
466
U.S. Supreme Court decision in which the Court ruled that the definition in Section 3 of the Defense of Marriage Act that marriage is between one man and one woman is unconstitutional
Windsor Decision
467
Subtracting amounts from an employee's wages for taxes, garnishments or levies, and other deductions (e.g. medical insurance premiums, union dues). These amounts are then paid over to the government agency or other party to whom they are owed.
Withholding
468
An agreement to reduce some employees' hours to avoid laying off other employees. Those employees whose hours were reduced receive partial unemployment benefits.
Work-sharing Plan
469
The process of determining whether an individual performing services for a business is either an employee or an independent contractor.
Worker Classification
470
A process that allows IRS agents and businesses to resolve worker classification cases as early in the enforcement process as possible with a settlement of past liabilities and an agreement to treat the workers as employees in the future.
Worker Classification Settlement Program
471
In the context of computers, a powerful personal computer that is generally faster than a standard PC.
Workstation
472
The basis for determining an employee's regular rate of pay and overtime pay due under the FLSA. It can be any consecutive 7-day(168 hour) period chosen by the employer (e.g. Saturday through Friday, Wednesday through Tuesday).
Workweek
