What payroll terms should payroll professionals know?

Payroll professionals should know core terms such as gross pay, net pay, FICA, FUTA, Form W-4, Form 941, taxable wages, pretax deductions, post-tax deductions, and withholding.

What payroll terms should experienced payroll teams review?

Experienced payroll teams should review both foundational terms and operational concepts such as deposit schedules, lookback periods, Form 940, Form 941, fringe benefits, wage bases, garnishments, and taxability.

Is this glossary a substitute for official payroll guidance?

No. This glossary is for professional payroll reference support. Current payroll rules, rates, and legal requirements should be verified with official IRS, SSA, DOL, state, or other applicable sources.

Payroll glossary

Payroll terms glossary for FPC, CPP, and everyday payroll study.

Use this alphabetized glossary to review common payroll taxes, forms, deductions, wage concepts, deposit terms, and compliance vocabulary before practicing questions.

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A D E F G L M N O P S T W

Additional Medicare Tax: An employee-only 0.9% Medicare tax withholding requirement that begins when wages paid by an employer exceed $200,000 in a calendar year. See FICA tax basics.
Annual wage base: The yearly limit on wages subject to a specific tax when a wage base applies. Social Security and FUTA have wage bases; regular Medicare tax does not.

Deposit schedule: The IRS timing rule that determines when an employer must deposit certain employment taxes. Common schedules are monthly and semiweekly. See payroll deposit schedule basics.
Disposable earnings: Earnings remaining after deductions required by law. This term is important for federal wage garnishment limits.

Employer share: The employer’s portion of payroll taxes, such as the employer Social Security and Medicare tax shares.
Exempt employee: An employee exempt from overtime requirements under applicable wage and hour rules. Exempt status depends on duties and pay requirements, not job title alone.

FICA: Federal Insurance Contributions Act taxes, generally referring to Social Security and Medicare taxes. Employees and employers generally both pay regular FICA taxes.
Form 940: The employer’s annual Federal Unemployment Tax Act return. See Form 940 basics.
Form 941: The employer’s quarterly federal tax return for wages, tips, federal income tax withholding, Social Security tax, and Medicare tax. See Form 941 basics.
Form W-2: The annual wage and tax statement employers provide to employees and file with government agencies.
Form W-4: The employee withholding certificate used to calculate federal income tax withholding. See Form W-4 basics.
Fringe benefit: Compensation provided in a form other than regular cash wages. Some fringe benefits are taxable and must be handled correctly in payroll.
FUTA: Federal Unemployment Tax Act tax. FUTA is generally an employer-only unemployment tax reported on Form 940. See FUTA tax basics.

Garnishment: A legally required withholding from an employee’s pay, often for debts, child support, taxes, or other obligations.
Gross pay: Total pay before taxes and deductions. Gross pay may include regular wages, overtime, bonuses, commissions, and other earnings.
Gross-to-net: The payroll calculation process that moves from gross pay through taxable wages, taxes, deductions, and net pay. See gross-to-net payroll calculation.

Lookback period: The prior period used to determine an employer’s employment tax deposit schedule for a calendar year.

Medicare tax: A FICA tax generally withheld from employee wages and matched by the employer. Regular Medicare tax has no wage base limit.
Monthly depositor: An employer deposit schedule category that generally deposits employment taxes for payments made during a month by the 15th day of the following month.

Net pay: Pay remaining after taxes and deductions are withheld from gross pay.
Next-day deposit rule: The IRS rule that generally requires next-business-day deposit when an employer accumulates $100,000 or more of taxes on any day during a deposit period.

Overtime: Additional pay required for nonexempt employees who work overtime under applicable wage and hour rules, commonly based on time and one-half of the regular rate under federal law.

Post-tax deduction: A deduction taken after applicable taxes are calculated.
Pretax deduction: A deduction taken before certain taxes are calculated. Pretax treatment varies by deduction type and tax.

Semiweekly depositor: An employer deposit schedule category where due dates depend on the payday. The term is about tax deposit timing, not payroll frequency.
Social Security tax: A FICA tax paid by employees and employers on covered wages up to the annual Social Security wage base.
Supplemental wages: Wage payments that are not regular wages, such as bonuses, commissions, overtime, and certain awards. See supplemental wage withholding.

Taxable wage base: The maximum amount of wages subject to a specific tax for a year, when a wage base applies.
Taxable wages: Wages subject to a specific tax after applying the relevant taxability rules and deductions.

Withholding: Amounts an employer deducts from wages for taxes, garnishments, benefits, or other required or authorized purposes.
Wage base: A limit on the amount of wages subject to a specific payroll tax for a year.

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Primary sources for payroll terms and current-rule verification include IRS Publication 15, IRS Publication 15-T, SSA contribution and benefit base, and U.S. Department of Labor Wage and Hour Division. This glossary is for professional payroll reference support, not legal or tax advice.