Form W-4
Definition
The US form an employee completes so the employer can determine how much federal income tax to withhold from their pay, based on filing status, dependents and other adjustments.
Related Terms in Payroll
Pay Stub
The US term for the statement accompanying a paycheck that itemises gross pay, taxes and other deductions, and net pay, with year-to-date figures. Equivalent to a payslip.
Exempt vs Non-Exempt Employee
A US classification under the Fair Labor Standards Act. Non-exempt employees must receive overtime pay for hours over 40 a week; exempt employees, meeting salary and duties tests, do not. Misclassification is a common compliance risk.
Social Security Wage Base
The annual limit on wages subject to the Social Security portion of US FICA tax. Earnings above the base are not taxed for Social Security in that year, though Medicare tax continues to apply.
Imputed Income
The value of non-cash benefits provided to an employee that must be treated as taxable income — such as personal use of a company car or certain group-term life cover — even though no cash changes hands.
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