There are many terms used through out the payroll department all relating to different tasks or processes used by payroll accountants some of these terms are as follows:
Accelerated deposit rule – This is the term used when a company owes more than $100,000 in tax liability during a tax deposit period and it is the rule that they must deposit the funds that tax is held back on the day after the liability occurs.
After tax deduction – This is an amount that is taken from the wages after all mandatory payments have been held back from the wages (such as income tax, charitable donations etc). So it doesn’t reduce the amount of taxable wage.
Balance sheet – This is a statement that is completed to show the businesses financial situation at any time showing the situation in regards to company’s assets and equity at specific dates.
Defined contribution plan – This is an amount that is paid on the retirement of an employee the amount varies dependant on contributions from both the employer and the employee.
Direct deposit – This is an electronic transfer of funds from the employer to an instituted account that is designated by the employee there fore avoiding the need for a paper pay cheque and benefiting the employee in the way their wages are available in their bank account on the day they are to be paid instead of having to wait for their cheque to clear.
Earned income credit – It is available to those employees that have a low income and is either paid when the employee completes and returns their tax return or is partially paid by their employer part way through out the year.
General ledger – This is a record of all transactions that have gone through the debit and credit accounts of a company, it helps the company complete forecasts and see where they stand financially with debt or profit.
Liabilities – These are the outstanding debts of the companies’ debit account.
Medical support withholdings – This is an amount that is taken from an employee’s wages each pay day and it is the employer’s responsibility to make sure these amounts are paid over to the named person in the medical support withholding order.
Payroll register – This is a record of all deductions from each employees wage for that payroll period, stating any over time or compensation amounts also.
Premium pay – This could have two different meanings in the payroll sector it could mean that its pay for over time worked or even special rates of pay for working week ends or nights.
Shift differential – This is extra pay that is given on top of workers pay due to working an undesirable shift such as late nights.
Third party sick pay – This is an amount paid to an employee by an insurer or firm similar in the event of an injury or illness resulting in them not being able to work.