| A | B |
|---|
| 401(k) | A qualified retirement plan sponsored by an employer. |
| Accumulated earnings | The total gross earnings year to date for an employee. |
| Adjusted gross income | The amount of total income minus adjustments, reported on Form 1040. |
| Commission | A method of paying an employee based on the amount of sales the employee generates. Commissions are normally calculated as a percent of an employee’s sales. |
| Direct deposit | The payment of an employee’s net pay using electronic funds transfer. |
| Employee earnings record | A business form used to record details of an employee’s earnings and deductions. |
| Individual retirement account (IRA) | A qualified retirement plan that provides most individuals with a deferred federal income tax benefit. Also called IRA. |
| Medicare tax | A federal tax paid for hospital insurance. |
| Net pay | Earnings paid to an employee after payroll taxes and other deductions. |
| Pay period | The number of days or weeks of work covered by an employee’s paycheck. |
| Payroll | The total amount earned by all employees for a pay period. |
| Payroll clerk | The accounting staff position that compiles and computes payroll data, then prepares, journalizes, and posts payroll transactions. |
| Payroll deduction | Any amount withheld from an employee’s gross earnings. |
| Payroll register | An accounting form that summarizes the earnings, deductions, and net pay of all employees for one pay period. |
| Payroll taxes | Taxes based on the payroll of a business. |
| Qualified retirement plan | A retirement savings plan approved by the Internal Revenue Service that provides individuals with a tax benefit. See also 401(k), individual retirement account, Roth IRA. |
| Roth individual retirement account (Roth IRA) | A qualified retirement plan that allows tax-free withdrawals from the account. |
| Salary | A fixed annual sum of money divided among equal pay periods. |
| Social security tax | A federal tax paid for old-age, survivors, and disability insurance. |
| Tax base | The maximum amount of earnings on which a tax is calculated. |
| Taxable income | The amount of total income minus adjustments, deductions, and exemptions that is used to calculate income tax. |
| Time clock | A device used to record the dates and times of every employee’s arrivals and departures. |
| Total earnings | The total amount paid by a business for an employee’s work, earned by a wage, salary, or commission. Also called Gross Earnings, Gross Wages, or Gross Pay. |
| Total income | The sum of all sources of income reported on Form 1040. |
| Voucher check | A check which has a detachable check stub, or voucher, that contains detailed information about the cash payment. |
| Wage | The amount paid to an employee for every hour worked. |
| Withholding allowance | A deduction from total earnings for each person legally supported by a taxpayer, including the employee. |
