Basis
A method of paying employees according to an agreed-upon amount for each week or month
Salary basis
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 employees
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
See Individual earnings record
Compensation record
A method of paying employees according to a stated rate per hour
Hourly rate basis
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
Earnings in excess of the base amount set by the Social Security Act
Tax-exempt wages
Taxes levied by the federal government against employers to benefit unemployed workers
Federal unemployment taxes (FUTA)
A method of paying employees according to a percentage of net sales
Commission 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
Taxes levied by a state government against employers to benefit unemployed workers
State unemployment taxes (SUTA)
A record of payroll information for each employee for the pay period
Payroll register
A method of paying employees according to the number of units produced
Piece-rate basis
A form used to claim exemption (withholding) allowances
Employee’s Withholding Allowance Certificate, Form W-4
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
A federal act providing certain benefits for employees and their families; officially the Federal Insurance Contributions Act
Social Security Act
Rate of pay for an employee’s work in excess of 40 hours a week
Time and a half
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 person who is hired by and works under the control and direction of the employer
Employee