PAYROLL BASICS
This is the amount of pay an employee earns before any taxes or deductions are taken out.
What is gross pay?
These two federal payroll taxes together make up what is commonly called "FICA."
What are Social Security and Medicare?
Employees receive this form by January 31 each year, summarizing their annual wages and taxes withheld.
What is a W-2?
These deductions are taken from an employee's paycheck before federal income tax is calculated, reducing their taxable income.
What are pre-tax deductions?
his is the designated date on which employee wages are actually deposited or distributed.
What is the pay date?
This pay frequency results in 26 pay periods per year.
What is bi-weekly?
The current Social Security tax rate paid by employees on their wages.
What is 6.2%?
This quarterly IRS form is used by employers to report wages paid and taxes withheld for their employees.
What is Form 941?
This type of pre-tax benefit account lets employees set aside money for eligible medical expenses, but funds typically do not roll over at year end.
What is an FSA (Flexible Spending Account)?
This term refers to the span of time for which an employee's work is tracked and compensated in a single paycheck.
What is the pay period?
This term describes the method of paying employees by directly depositing funds into their bank accounts rather than issuing a paper check.
What is direct deposit?
This federal tax is paid only by the employer and funds the unemployment insurance system at the federal level.
What is FUTA (Federal Unemployment Tax Act)?
Independent contractors who are paid $600 or more in a year receive this form instead of a W-2.
What is a 1099-NEC?
Unlike an FSA, this health savings account is only available to employees enrolled in a High-Deductible Health Plan and funds roll over year to year.
What is an HSA (Health Savings Account)?
A payroll run processed outside the normal schedule to correct a missed or incorrect payment is called this.
What is an off-cycle (or manual) payroll?
This document is completed by new hires to tell their employer how much federal income tax to withhold from their paycheck.
What is a W-4?
High earners pay an additional 0.9% Medicare surtax once their wages exceed this threshold for single filers.
What is $200,000?
This annual IRS form is filed by employers with fewer than 50 full-time equivalent employees and covers a shorter reporting period than Form 941.
What is Form 944?
Employee contributions to this type of traditional retirement plan are made pre-tax, reducing current taxable income but taxed upon withdrawal.
What is a 401(k)?
When an employee's final paycheck must be issued, many states require it to be paid by this point rather than the next regular pay date.
What is the date of termination (or last day worked, depending on state law)?
This is the term for the difference between an employee's gross pay and their net pay.
What are deductions (or withholdings)?
This annual wage base limit applies to Social Security withholding, meaning wages above this amount are not subject to the 6.2% employee tax.
What is the Social Security wage base of $184,500. (2026)
Employers use this IRS form to report federal unemployment taxes paid throughout the year, filed annually.
What is Form 940?
This section of the IRS code governs cafeteria plans, which allow employees to choose between taxable and non-taxable benefits.
What is Section 125?
Under the FLSA, non-exempt employees must be paid at this rate for any hours worked beyond 40 in a workweek.
What is 1.5 times (time and a half) their regular rate?