Payroll Tax
Definition
Taxes and contributions levied on wages, which may be withheld from employees, borne by employers, or both. They typically fund social-security and related programmes.
Related Terms in Payroll
Withholding Tax
Tax an employer or payer deducts from a payment and remits to the authorities on the recipient's behalf, so tax is collected as income is earned rather than only at filing.
Payroll Register
A detailed record for each pay run listing every employee's gross pay, deductions and net pay. It is the source document for payroll journal entries and for reconciling payroll to the general ledger.
Overtime Pay
Additional pay for hours worked beyond the normal schedule, often at a premium rate set by law or contract. Correctly tracking and rating overtime is a common payroll compliance point.
Wage Garnishment
A legal requirement that an employer withhold part of an employee's pay to satisfy a debt, such as a court order or tax levy, and send it to the relevant party before paying the rest to the employee.
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