HR, Payroll & Workforce Management Glossary

Pay Statement (Pay Stub)

A record of an employee’s earnings, taxes, deductions, and take-home pay for a payment. It may show the pay date, the dates covered by the payment, and year-to-date totals. Historical pay statements are easier to find when the pay date and pay period end date are stored separately. Also known as a pay summary in some systems.

Pay Period

The span of time a payroll payment covers. A pay period has a start date and an end date; the employee may receive payment after the period ends.

Pay Period Start Date

The first date in the period covered by the payment. Also called the pay period starting date.

Pay Period End Date

The last date in the period covered by the payment. Also called the pay period ending date. For example, a statement for the period ending June 30 may have a pay date in July.

Pay Date

The date the employee is paid, also called the check date or payment date. A pay date identifies when the payment was made; the pay period dates identify the span it covers.

Off-Cycle Payroll

A payroll run processed outside the regular pay schedule. An employer may use it to pay a bonus separately or to correct a missed payment before the next regular payday. In historical records, an off-cycle payment may have its own pay statement and pay date even when it relates to a regular pay period.

Pay in Arrears

Pay issued after the pay period it covers has ended. For example, employees may be paid on July 5 for a pay period ending June 30. When this is the regular payroll schedule, paying in arrears does not mean the payment is late.

Pay Frequency

How often an employer schedules regular payroll payments. Common schedules include weekly, biweekly, semimonthly, and monthly.

Weekly Pay

A schedule with one regular payday each week. A calendar year typically has 52 weekly pay dates and can have 53, depending on the schedule.

Biweekly Pay

A schedule with one regular payday every two weeks. A calendar year typically has 26 biweekly pay dates and can have 27, depending on the schedule.

Semimonthly Pay

A schedule with two regular paydays each month, or 24 per year. For example, paydays might fall on the 15th and the last day of each month, with adjustments for weekends or holidays.

Monthly Pay

A schedule with one regular payday each month, or 12 per year.

Gross Pay

Total earnings for a payment before employee taxes and deductions are subtracted. Gross pay may include regular wages, overtime, and bonuses. Taxable wages can differ from gross pay.

Net Pay

The employee’s take-home pay after withholding and deductions are applied. A single net payment may be split among multiple bank accounts.

Salary

A fixed rate of pay stated for a period, such as a year, and typically paid in installments. Being paid a salary does not by itself determine eligibility for overtime.

Hourly Pay

Pay based on an hourly rate and the number of paid hours. A pay statement may show separate hours and rates for regular pay, overtime, and other earnings.

Overtime Pay

Additional pay for hours worked beyond an applicable threshold. Under U.S. federal law, covered nonexempt employees generally receive at least one and a half times their regular rate for hours worked over 40 in a workweek. Other rules can also apply.

Tips

Amounts customers voluntarily give workers in addition to the price of goods or services. Depending on how tips are received and recorded, payroll records may show tips paid through payroll or tips reported to the employer.

Bonus

Extra compensation paid in addition to regular wages or salary, such as a performance or signing bonus.

Gross-Up

An increase in the gross amount of a payment to help cover taxes so the employee receives an intended net amount. For example, an employer may gross up a relocation payment.

Retroactive Pay (Retro Pay)

A payroll adjustment paid later to make up a difference in earnings for an earlier pay period. For example, if a raise takes effect June 1 but is first applied in July, retroactive pay can cover the difference between the old and new rates for the affected June pay periods. Some payroll systems label it “retropay.”

Earnings Code

A payroll system code that identifies the type of earnings, such as regular pay, overtime, or bonus pay. During a migration, a crosswalk can show how earnings codes in one system map to another.

Month to Date (MTD)

A running total from the start of the month through a specified date. For example, month-to-date gross pay through July 15 includes gross pay from payroll payments dated July 1 through July 15.

Quarter to Date (QTD)

A running total from the start of the quarter through a specified date. For example, for a calendar quarter that starts July 1, quarter-to-date federal income tax withholding through August 15 includes amounts withheld from payroll payments dated July 1 through August 15.

Year to Date (YTD)

A running total from the start of the year through a specified date. A pay statement may display separate YTD totals for gross earnings, withholding, and deductions.

Federal Insurance Contributions Act (FICA)

The U.S. law under which Social Security and Medicare payroll taxes are collected. Pay statements often list Social Security and Medicare as separate amounts.

Federal Income Tax Withholding

Federal income tax an employer takes out of a payment and remits on the employee’s behalf. The amount withheld is distinct from the employee’s final tax liability.

Form W-4 (Employee’s Withholding Certificate)

A U.S. tax form an employee gives to an employer to help determine how much federal income tax to withhold from pay. Historical payroll records may contain more than one W-4 if the employee updated their withholding information.

State Income Tax Withholding

State income tax an employer withholds from pay where applicable. Payroll records may identify the state and amount withheld.

Local Income Tax Withholding

Income tax withheld for a local jurisdiction where applicable, such as a city or school district. Payroll records may identify each jurisdiction separately.

Payroll Deduction

An amount taken from an employee’s pay, such as a benefit premium, retirement contribution, charitable contribution, or garnishment. Pay statements often list deductions separately from tax withholding.

Deduction Arrears

The unpaid portion of a payroll deduction when there is not enough pay available to take the full amount. Depending on the payroll system and the deduction rules, the unpaid balance may carry forward for collection from a future paycheck. For example, if only $30 is available for a $50 benefit premium, the remaining $20 may be recorded as deduction arrears.

Deduction Code

A payroll system code that identifies a deduction, such as a medical premium or retirement contribution. When preserving history, keep the code and its description so old records remain understandable.

Pre-Tax Deduction

A deduction that reduces the wages used to calculate one or more taxes. Which taxes it affects depends on the deduction and the applicable rules.

Post-Tax Deduction

A deduction taken from pay after applicable taxes are calculated, without reducing the taxable wages used for those calculations. Also called an after-tax deduction.

Automated Clearing House (ACH)

A U.S. electronic payment network that financial institutions use to move money between accounts. Payroll direct deposits commonly use ACH.

Direct Deposit

Electronic payment of wages into an employee’s designated account or accounts. The pay statement documents the payment even when no paper check is issued.

Voided Payroll Payment

A payroll payment marked as canceled in the payroll system. For example, an employer may void a lost check before issuing a replacement. The original payment record may still appear in payroll history, so check its status before counting it as paid.

Reissued Payroll Payment

A replacement for an earlier payroll payment, such as a check that was lost or damaged. The replacement may have a different check number or issue date. When both records appear in payroll history, check whether one replaced the other before counting them as two payments.

Wage Garnishment

A legally required withholding from earnings to satisfy an obligation, such as child support or a debt. Payroll records may show the amount withheld as a separate deduction.

Payroll Register

A report that summarizes payroll activity for a run or reporting period. It commonly shows employee earnings, taxes, deductions, and net pay, along with totals used to review or reconcile payroll.

Payroll Balancing

The process of comparing payroll totals across reports and records to make sure earnings, taxes, deductions, and net pay agree where they should, and to explain any differences. Balance each payroll run as it is processed, then reconcile totals month by month, quarter by quarter, and for the full year. Checking each run promptly makes discrepancies easier to trace; when several runs are left unchecked, it can be harder to determine which run introduced an error.

As a separate check, compare the amount due for the tax deposit with the amount submitted, then verify the amount on the deposit confirmation.

Payroll Master Control Record

A record that holds settings, control totals, or both for a payroll run. Depending on the system, it may specify the type of run (such as regular or off-cycle payroll), the pay cycle to use, which deductions to process, and how to handle deduction arrears.

In some systems, an earnings code can be accepted at entry but skipped during processing if it is not enabled for that run.

The name and contents vary by system. During a migration, identify which fields control payroll processing and which totals can be checked against the payroll register.

Form W-2 (Wage and Tax Statement)

A U.S. tax form that reports wages and other compensation paid during a calendar year and applicable taxes withheld. For example, if a pay period ends December 31 and the wages are paid on January 8, those wages would belong on the following year’s Form W-2.

IRS instructions for Forms W-2 and W-3

Form W-2c (Corrected Wage and Tax Statement)

A form an employer uses to correct information on a previously filed Form W-2. For example, an employer may issue a W-2c to correct an employee’s Social Security number, reported wages, or taxes withheld. The correction applies to the tax year shown on the form, even if it is issued in a later year.

Form W-3 (Transmittal of Wage and Tax Statements)

A summary of the wage and tax amounts reported on the Forms W-2 an employer submits to the Social Security Administration. Form W-3 accompanies a paper submission. When W-2s are filed electronically, the summary information is included in the electronic filing.

Form W-3c (Transmittal of Corrected Wage and Tax Statements)

A form employers use to send one or more Forms W-2c to the Social Security Administration when filing on paper. It summarizes the corrections reported on the accompanying forms.

Form 940 (Employer’s Annual Federal Unemployment Tax Return)

The annual federal return employers use to report tax under the Federal Unemployment Tax Act (FUTA). The employer pays this tax; it is not deducted from employees’ wages.

Form 941 (Employer’s Quarterly Federal Tax Return)

The quarterly federal return most employers use to report wages paid, federal income tax withheld, and the employee and employer shares of Social Security and Medicare taxes. Federal unemployment tax is reported separately on Form 940.

Form 941-X (Adjusted Employer’s Quarterly Federal Tax Return or Claim for Refund)

A form employers use to correct amounts reported on a previously filed Form 941 or to claim a refund of overreported employment taxes. The adjustment applies to the quarter identified on the form.

Form 1095-C (Employer-Provided Health Insurance Offer and Coverage)

A U.S. tax form applicable large employers use to report health coverage offers. For applicable large employers with self-insured plans, it can also report who was enrolled and when.

Form 1099-NEC (Nonemployee Compensation)

A U.S. tax form businesses use to report qualifying payments for services performed by nonemployees, such as independent contractors. In historical records, a contractor’s payment information may be filed with accounts payable or vendor records, while employee wages are reported on Form W-2.

Employer Identification Number (EIN or FEIN)

A federal tax ID the IRS assigns to a business or other entity. Payroll and tax records use it to identify the employer. FEIN stands for Federal Employer Identification Number.

401(k) Plan

An employer-sponsored retirement plan that allows employees to contribute part of their pay. Depending on the plan, employees may have traditional pre-tax and designated Roth contribution options.

401(k) Match

An employer contribution tied to how much an employee contributes to the 401(k) plan, based on the plan’s matching formula.

403(b) Plan

An employer-sponsored retirement plan available to eligible employees of public schools and certain tax-exempt organizations, among others. Employees can generally contribute through payroll.

Designated Roth Contribution

An after-tax employee contribution to a designated Roth account in an employer retirement plan that offers the option. Qualified distributions are generally tax-free. A designated Roth account is separate from a Roth IRA.

Cafeteria Plan (Section 125 Plan)

An employer plan that lets eligible employees choose between taxable compensation, such as cash, and qualified benefits. It can allow certain benefit premiums to be paid through pre-tax payroll deductions.

Health Savings Account (HSA)

An account that eligible individuals can use to save and pay for qualified medical expenses. Employees or employers may contribute, and the account can stay with the employee after a job change.

Flexible Spending Account (FSA)

An employer benefit arrangement that lets employees set aside pre-tax pay for eligible expenses. A health care FSA can cover expenses such as copayments and deductibles. In payroll history, FSA contributions may appear under a separate deduction code from Health Savings Account (HSA) contributions.

Medical Insurance

Coverage that helps pay for eligible healthcare expenses. An employee’s share of the premium may appear as a payroll deduction.

Dental Insurance

Coverage that helps pay for eligible dental care. It may be offered separately from medical coverage and listed under its own deduction code.

Disability Insurance

Coverage that can replace part of a person’s income when a qualifying illness or injury prevents them from working. Short-term and long-term disability plans may have separate premiums and payroll codes.

Group Term Life Insurance (GTL)

Term life insurance provided under a group policy, often through an employer. In payroll records, GTL can refer to the coverage or to taxable imputed income associated with it.

Supplemental Insurance

Coverage that provides benefits in addition to a primary insurance plan. Examples include accident, hospital indemnity, and specified disease policies. Premiums may be listed separately in payroll.

Cancer Insurance

A type of supplemental insurance that provides benefits for qualifying cancer diagnoses or treatment, depending on the policy.

Pet Insurance

Insurance that can help cover eligible veterinary expenses. If offered through an employer, premiums may be collected through payroll.

Charitable Payroll Deduction

A voluntary deduction that directs part of an employee’s pay to a charity or workplace giving campaign, such as United Way.

Savings Bond Payroll Deduction

A payroll deduction or allocation used to set aside part of an employee’s pay for U.S. savings bond purchases. The label may appear in historical payroll records.