Term

941

940

Form 941 – Employer’s Quarterly Federal Tax Return

Used by employers to report payroll taxes withheld from employee wages each quarter. This includes federal income tax withholding, Social Security tax, and Medicare tax, along with the employer’s portion of Social Security and Medicare taxes. Form 941 also reports taxable wages, tips, and payroll tax deposits made throughout the quarter.

Form 940 – Employer’s Annual Federal Unemployment (FUTA) Tax Return Used by employers to report and pay federal unemployment taxes (FUTA). This form is filed annually and helps fund unemployment compensation programs. Employers report total wages paid, taxable FUTA wages, state unemployment tax contributions, and any FUTA tax due.

Approval deadline

The latest date and time a payroll can be approved to ensure employees are paid on the scheduled payday.

Base pay (Basis)

The payment structure for an employee’s regular earnings, such as hourly or salary.

Benefit contributions

Employer and employee amounts set aside for benefits like health insurance or retirement plans. May include pre-tax deductions.

Child support

Court-ordered deductions from an employee’s pay used to support a dependent child.

Company

The employer’s registered business entity in Salaris Payroll. Company details appear on employee paystubs.

Correction

A payroll adjustment made to fix an error in a previously processed pay period (for example, an overpayment).

DBA (Doing Business As)

A trade name used by a business that differs from its legal entity name.

Direct deposit

An electronic transfer of wages from the employer’s bank account directly to the employee’s bank account.

Disposable income

Employee earnings after required deductions (used to determine garnishment limits).

Earnings

Total compensation before deductions. May include regular pay, overtime, bonuses, or commissions.

Earnings type

The category of pay that describes how the employee earned wages (e.g., hourly, salary, overtime, bonus).

EIN

Employer Identification Number assigned by the IRS; used for tax filing and reporting.

FICA

Federal Insurance Contributions Act taxes—Social Security and Medicare—withheld from employee wages and matched by employers.

Fringe benefits

Non-wage compensation, such as allowances or non-cash perks, which may be taxable depending on IRS rules.

FUTA (Federal Unemployment Tax Act)

Employer-paid federal unemployment tax based on each employee’s wages, up to an annual wage base limit.

Gross pay

Total amount earned before any deductions or taxes.

Net pay

The employee’s take-home pay after all deductions and taxes have been withheld.

Pay period

The range of dates during which an employee’s work hours or salary are calculated for payment.

Payday

The date wages are issued for a specific pay period.

Payroll

A record of all pay items, taxes, deductions, and payments processed for employees in a pay run.

Post-tax deductions

Amounts withheld from pay after taxes, such as union dues, wage garnishments, or loan repayments.

Pre-tax deductions

Amounts withheld before taxes are calculated, reducing taxable income (e.g., health insurance premiums, retirement contributions).

Reimbursement

Payment to an employee for approved business expenses (usually non-taxable).

Social Security

Federal payroll tax collected under FICA to fund retirement and disability benefits.

State unemployment (SUI)

Employer-paid state tax that funds unemployment benefits for eligible workers. Rates and wage limits vary by state.

Taxable wages

The portion of an employee’s earnings subject to specific taxes after pre-tax deductions are applied.

Wage base limit

The maximum amount of wages subject to a particular tax in a given year. Once reached, no additional tax is withheld for that type.

Withholding

The process of deducting taxes from employee pay and sending them to the correct government agency.

YTD (Year-to-Date)

The cumulative total of earnings, deductions, or taxes from the beginning of the calendar year through the current pay period.