Compensates
A method of paying employees according to a percentage of net sales
Commission Basis
A person who is hired by and works under the control and direction of the employer
Employee
A form used to claim exemption (withholding) allowances
Employee’s Withholding Allowance Certificate, Form W-4
See Individual earnings record
Compensation Record
Salaried employees who hold supervisory or managerial positions who are not subject to the maximum hour and overtime pay provisions of the Wage and Hour Law
Exempt Employee
A method of paying employees according to an agreed-upon amount for each week or month
Salary Basis
A federal act providing certain benefits for employees and their families; officially the Federal Insurance Contributions Act
Social Security Act
A tax imposed by the Federal Insurance Contributions Act and collected on employee earnings to provide retirement and disability benefits
Social security (FICA or OASDI) tax
Rate of pay for an employee’s work in excess of 40 hours a week
Time and a half
A simple method to determine the amount of federal income tax to be withheld using a table provided by the government
Wage-bracket table method
An employee record that contains information needed to compute earnings and complete tax reports
Individual earnings record
A tax levied on employees and employers to provide medical care for the employee and the employee’s spouse after each has reached age 65
Medicare tax
A record of payroll information for each employee for the pay period
Payroll register
Taxes levied by the federal government against employers to benefit unemployed workers
Federal unemployment taxes (FUTA)
Earnings in excess of the base amount set by the Social Security Act
Tax-exempt wages
A method of paying employees according to the number of units produced
Piece-rate basis
Taxes levied by a state government against employers to benefit unemployed workers
State unemployment taxes (SUTA)
A method of paying employees according to a stated rate per hour
Hourly rate basis
One who is paid by a company to carry out a specific task or job but is not under the direct supervision or control of the company
Independent contractor
Insurance that protects employees against losses from job-related injuries or illnesses, or compensates their families if death occurs in the course of the employment
Workers’ compensation insurance
The portion of company profits that are kept by the company rather than distributed to the stockholders as cash dividends.
Retained Earnings
A retirement plan in which the employer funds a pension generally based on each employee's years of service and salary.
Defined Benefit Plan
A defined contribution plan that is sponsored by corporate employers.
401k Plan
A self sponsored retirement program.
Individual Retirement Account (IRA)
Individuals who provide small amounts of capital and expert business advice to small firms in exchange for an ownership stake in the firm.
Angel Investors