Payroll & Benefits Glossary

Build pay from complete time records

Timekeeping records hours and other pay-relevant events. DOL FLSA recordkeeping guidance lists federal records for covered employers. State law may require more.

Capture service, documentation, meetings, training, travel between work sites, waiting, on-call work, remote work, breaks, leave, and corrections when applicable. Supervisors should approve exceptions without erasing the worker's original report.

A pay period is the span used to accumulate pay. A pay date is when wages are due or paid under the applicable schedule. A wage statement is the itemized record delivered to the worker under federal or state rules.

Separate tax types and reporting

Payroll tax is a broad label for employment-related withholding and employer taxes. The Federal Insurance Contributions Act, or FICA, covers Social Security and Medicare taxes. The Federal Unemployment Tax Act, or FUTA, creates a federal unemployment tax framework.

State unemployment insurance follows state registration, wage, rate, filing, and payment rules. New-hire reporting requires employer reporting under federal-state systems and state deadlines.

IRS Publication 15 is the federal Employer's Tax Guide. It covers withholding, deposits, reporting, and employment-tax basics. State revenue, labor, and unemployment agencies control their own rules.

Form W-2 reports wages and taxes for an employee under federal requirements. It is an annual reporting form, rather than a substitute for each pay statement or the underlying ledger.

Treat leave programs by source

The Family and Medical Leave Act provides eligible employees of covered employers with job-protected leave for defined reasons. DOL maintains the current FMLA resource page. Eligibility, employer coverage, hours, location, reason, notice, certification, maintenance of benefits, and restoration all matter.

Paid family and medical leave and paid sick leave can arise under state, local, employer, or contract rules. They differ from unpaid federal FMLA leave, though programs can overlap. DOL's state labor contacts help locate authorities.

Build a jurisdiction matrix for accrual, frontloading, carryover, use, notice, documentation, rate, pay-statement display, reinstatement, payout, and record retention.

Administer health coverage carefully

COBRA continuation coverage can allow temporary continuation of group health coverage after defined events. DOL EBSA's COBRA page provides federal resources. Plan type, employer size, qualifying event, qualified beneficiary, notice, election, premium, and state continuation rules require review.

The Affordable Care Act employer mandate is the employer shared-responsibility framework for applicable large employers. IRS ACA guidance explains the federal rules and information reporting.

A Section 125 cafeteria plan permits eligible benefits to be offered under a written federal tax arrangement. Plan terms, elections, qualifying events, nondiscrimination, payroll setup, and substantiation matter.

Govern retirement benefits

A 401(k) plan is a qualified defined-contribution retirement plan that can permit employee elective deferrals and employer contributions. ERISA fiduciary, plan-document, deposit, eligibility, vesting, testing, notice, fee, and reporting duties need qualified administration.

Do not hold employee contributions in payroll longer than permitted. Reconcile payroll deductions to plan deposits and participant records by pay date, worker, and amount. Investigate differences immediately.

Use a controlled payroll close

Before release, reconcile approved time, rates, overtime, leave, benefits, deductions, taxes, reimbursements, garnishments, prior corrections, net pay, funding, and the general ledger. Separate payroll debits from later tax deposits so cash forecasts include each amount once.

Training can be compensable work. Payer reimbursement rules do not decide whether time must be paid. Classification, licensure, supervision, and productivity targets also do not override wage law.

Use a correction log that begins with the affected worker, pay period, hours or amount, cause, discovery date, applicable deadline, correction date, wage-statement action, tax effect, benefit effect, notice, and validation. Do not let a generic next-payroll workflow delay a shortage when state law requires an earlier correction. Preserve the original record and reason for every edit.

Reconcile benefits separately from wages. For each plan, compare the eligibility file, elections, qualifying events, deductions, employer contributions, carrier or administrator file, invoices, deposits, terminations, and participant notices. A payroll deduction proves only that money was withheld. It does not prove enrollment, coverage, plan deposit, or correct tax treatment.

When a worker crosses states or works remotely, review wage-hour, payroll withholding, unemployment, paid leave, workers' compensation, benefits, registration, and new-hire duties by work location. Build the change before the first affected payroll and preserve the authority used.

Test the setup.

A payroll-control example

A fictional practice locks 28 employee pay records due for release. Twenty-five have approved time, rate, overtime, leave, deductions, tax setup, and net-pay reconciliation, or 25/28, 89.3%. All 25 pass a duplicate-payment and funding test.

The three incomplete records remain on hold with owners and correction deadlines. Report on-time pay using every worker whose pay was due, including records held for an employer error. Correct shortages under the applicable payday and wage-statement rules.

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