Key Terms
The key terms used in this section are:
401k Plan: A 401(k) plan is a taxable deduction.
Payroll: A payroll provides a list of employees and the payments due to each employee within a specific pay period.
Pay Period: A pay period is the period over which an employee is paid.
Payroll expense: The payroll expense is the largest expense for most companies.
Paycheck: A paycheck is a paper document issued by an employer to pay an employee for services rendered.
Pay slip: Also called a pay stub, payslip, pay advice, or a paycheck stub, this is a document that an employee receives either along with their check or with the reciept of the direct deposit transaction. It will typically detail the gross income, taxes, and any other deductions such as retirement plan contributions, insurances, garnishments, or charitable contributions. The deductions are subtracted from the gross amount to arrive at the final net amount of the pay. The pay slip may also include the year-to-date totals.
Payroll card: A payroll card is a card that allows an employee to access their paycheck by using a card.
Gross Earnings: The term “gross” refers to the amount calculated before deduction(s).
Salary: A salary is a fixed amount of money paid to an employee for each pay period.
Hourly wage: An hourly wage is an amount paid to an employee at a specified rate per hour worked.
Commission: A commission is an amount paid to an employee based on a percentage of the employee’s sales.
Salary plus Commission or Bonus: Some salespeople earn a base salary plus a commission or bonus on the amount of their sales.
Piece Rate: The pay an employee receives on a per-piece basis.
Overtime Pay: The pay for any hours worked over forty.
Deductions: A deduction is an amount subtracted from the gross pay.