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Payroll Outsourcing

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AI in HR

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A  B  C  D  E  F  G  H  I  J  K  L  M  N  O  P  Q  R  S  T  U  V  W  X  Y  Z

A

Absence Management

Handling employee absences to ensure minimal disruption to operations.

Account Manager

 The primary contact person responsible for managing the payroll outsourcing service relationship.

Accrual

The accounting method of recording revenues and expenses when they are incurred, regardless of when cash is exchanged.

Adjustments

Modifications made to payroll records to correct errors or account for changes.

Annual Bonus

A yearly incentive given to employees based on performance or company profits.

Action Plan

A plan that states what actions are going to be taken, by whom, during what time frame, and with what expected results.

Activity-Based Costing (ABC)

An accounting method for allocating indirect and fixed costs to individual products or product lines based on the value-added activities going into that product.

B

Benefits Administration

Managing employee benefits such as health insurance, retirement plans, and other perks.

Bi-weekly Payroll

Payroll processed every two weeks, resulting in 26 pay periods in a year.

Back Pay

Payment made to an employee to cover wages that were not paid at the correct time.

Base Pay

The initial rate of compensation an employee receives, not including benefits, bonuses, or raises.

Bonus

Extra compensation given to employees as a reward for performance.

Balanced Scorecard

Combines financial measures with operational measures on customer satisfaction, internal processes, and the corporation’s innovation and improvement activities.

Benchmarking

The process of measuring products, services, and practices against those of competitors or companies recognized as industry leaders.

Budget

A statement of a corporation’s programs in terms of money required.

C

Compliance

Ensuring all payroll activities adhere to local, state, and federal laws and regulations.

Cost Allocation

Distributing payroll costs across different departments or projects.

Compensation

Total of all monetary and non-monetary payments provided to an employee.

Cloud-based Payroll System

Payroll software hosted on remote servers accessible via the internet.

Custom Reporting

Creating specific reports tailored to the needs of the organization or stakeholders.

Capability

A corporation’s ability to exploit its resources.

Core Competency

A collection of corporate capabilities that cross divisional borders and are widespread within a corporation, and that a corporation can do exceedingly well.

Core Rigidity/Deficiency

A core competency of a firm that over time matures and becomes a weakness.

Corporate Parenting

 A corporate strategy that evaluates the corporation’s business units in terms of resources and capabilities that can be used to build business unit value as well as generate synergies across business units.

Cost Leadership

A low-cost competitive strategy that aims at the broad mass market.

D

Direct Deposit

Electronic transfer of an employee’s net pay directly into their bank account.

Deductions

Amounts subtracted from an employee’s gross pay, including taxes, insurance premiums, and retirement contributions.

Data Integration

 Combining payroll data from various sources into a unified system.

Deferred Compensation

Portion of an employee’s income paid out at a later date, often to provide tax benefits.

Disability Insurance

Coverage that provides income to employees who cannot work due to a disability.

E

Employee Self-Service (ESS)

Online platforms allowing employees to view their payroll information, update personal details, and manage benefits.

Earnings Statement

A document provided to employees detailing their gross pay, deductions, and net pay for a specific pay period.

Exempt Employee

An employee who is not entitled to overtime pay under the Fair Labor Standards Act (FLSA).

Employee Identification Number (EIN)

A unique number assigned to an employer for tax reporting purposes.

Expense Management

The process of tracking and reimbursing employee expenses.

Employee State Insurance (ESI)

 A self-financing social security and health insurance scheme for Indian workers. Employers contribute to this fund to provide medical and cash benefits to employees in case of sickness, maternity, disability, or death due to employment injury.

Economies of Scale

A process in which unit costs are reduced by making large numbers of the same product.

Expense Center

 A business unit that uses money but contributes to revenues only indirectly.

F

FICA (Federal Insurance Contributions Act)

 U.S. federal payroll tax funding Social Security and Medicare.

Full-Time Equivalent (FTE)

A unit representing the workload of an employed person in a way that makes workloads comparable across various contexts.

Fixed Pay

A predetermined amount of money paid to an employee, usually on a regular basis.

Final Paycheck

The last paycheck an employee receives upon termination or resignation.

Flexible Benefit Plan (FBP)

 An arrangement that allows employees to receive a portion of their salary in the form of reimbursements for eligible expenses, such as medical expenses, transport, and meal allowances. This is done to optimize the tax benefits for the employee.

 Form 16

 An Indian tax form issued by employers to their employees. It provides details of the salary paid and the taxes deducted at source (TDS) during the financial year.

G

Government Reporting

Submitting required payroll and tax information to government agencies.

Gross Pay

The total amount earned by an employee before any deductions.

General Ledger Interface

The system that connects payroll data with the organization’s accounting records.

Gross-to-Net Calculation

The process of calculating net pay from gross earnings by deducting taxes and other withholdings.

H

HRIS (Human Resource Information System)

 Software that combines human resource functions, including payroll management.

Hourly Wage

 Compensation paid to employees based on the number of hours worked.

Holidays

Paid or unpaid days off provided to employees in observance of public holidays.

Headcount Reporting

Tracking the number of employees in an organization.

I

Incentive Pay

 Additional compensation to motivate and reward employees for exceeding performance goals.

Income Tax

Taxes levied on wages earned by employees, deducted from their paychecks

Independent Contractor

 A self-employed individual who provides services to a company under a contract.

Integration

Combining payroll systems with other business systems to streamline operations.

Internal Controls

Procedures and policies implemented to ensure the integrity of financial and accounting information.

J

Job Costing

Assigning costs to specific jobs or tasks to determine profitability.

Jurisdiction

The official power to make legal decisions and judgments, influencing payroll regulations.

L

Leave of Absence

Authorized time away from work, which may be paid or unpaid.

Labor Law Compliance:

Adherence to laws governing employment standards, worker rights, and workplace safety.

Labor Cost Distribution

Allocating labor costs to various departments or projects.

Late Payment Penalties

Fines or fees imposed for not paying employees on time.

Life Insurance

A benefit that provides financial protection to an employee’s beneficiaries in the event of their death.

M

Minimum Wage Compliance

Ensuring employees are paid at least the minimum wage as mandated by law.

Monthly Payroll Cycle

Processing and distributing employee salaries on a monthly basis.

Multi-state Payroll

Managing payroll for employees located in different states, each with its own tax and labor laws.

Mobile Payroll Access

Allowing employees to access their payroll information via mobile devices.

Medicare Tax

A federal tax that funds the Medicare program, deducted from employees’ wages.

Mediclaim Policy

A health insurance policy that provides coverage for medical expenses incurred by the insured. It allows individuals to claim reimbursement or cashless treatment for hospitalizations, surgeries, and other medical expenses.

N

Net Pay

 The amount of money an employee takes home after all deductions are made.

Non-exempt Employees

Employees entitled to overtime pay under the Fair Labor Standards Act (FLSA).

Non-cash Benefits

Benefits provided to employees that do not involve direct monetary compensation, such as company cars or gym memberships.

Notice Period

The time period an employee or employer must give before ending employment.

Non-resident Alien

A foreign national who does not pass the green card or substantial presence test and has different tax withholding requirements.

O

Onboarding

The process of integrating new employees into the organization and ensuring they are set up in the payroll system.

Outsourcing Agreement

 The contract between the client and the payroll service provider detailing the terms of service.

Overtime Pay

 Additional compensation for hours worked beyond the standard workweek.

Off-cycle Payments

Payroll payments made outside the regular payroll schedule, often for corrections or special circumstances.

Online Payroll Services

Internet-based systems that handle payroll processing and management.

Outsourcing

A process in which resources are purchased from others through long-term contracts instead of being made within the company.

P

Payroll Tax

Taxes imposed on employers and employees, including Social Security and Medicare taxes.

Pay Stub

A document accompanying a paycheck, detailing earnings and deductions.

Pay Period

The frequency with which employees are paid, such as weekly, bi-weekly, or monthly.

Payroll Processing

The administrative task of compensating employees for their work, including calculating wages and deductions.

Payroll Register

A report that summarizes payroll information for each employee for a specific pay period.

Payroll Compliance

Adherence to federal, state, and local regulations regarding employee compensation, tax withholdings, and reporting.

Payroll Management System

Software designed to handle all aspects of payroll processing, including wage calculation, tax deductions, and generating paychecks.

Payroll Outsourcing Vendor

 A third-party service provider that handles payroll processing and administration for other businesses.

Q

Quarterly Reports

Financial reports summarizing payroll activities and tax withholdings for a three-month period.

Quality Assurance

Ensuring the accuracy and reliability of payroll processing through systematic monitoring and evaluation.

QuickBooks Integration

Connecting payroll data with QuickBooks accounting software for streamlined financial management.

Quarterly Tax Filing

The process of submitting payroll tax returns and payments to the relevant tax authorities every quarter.

R

Reconciliation

The process of ensuring payroll records match financial records.

Remote Payroll Processing

Managing payroll for employees who work remotely or in different locations.

Retirement Plan Contributions

Employee and employer payments made into retirement savings plans like 401(k)s.

Record keeping:

Maintaining accurate and comprehensive payroll records for compliance and auditing purposes.

Retroactive Pay

Compensation for work performed in a previous pay period, often due to missed or incorrect payments.

S

Salary

Fixed regular payment, typically paid monthly or bi-weekly but expressed as an annual sum.

Statutory Deductions

Mandatory deductions from an employee’s gross pay, including taxes and social security contributions.

Severance Pay

Compensation paid to an employee upon termination of employment.

Supplemental Wages

Compensation in addition to regular wages, including bonuses, commissions, and overtime.

Shared Services

A model for delivering corporate support in which a company consolidates its administrative functions in a single unit, which services multiple business units.

Service-Level Agreement (SLA)

A contract between a service provider and a customer that specifies the service to be provided and the expected level of performance.

T

Time and Attendance Tracking

Systems to track employee work hours and attendance.

Tax Withholding

The portion of an employee’s wages withheld for tax purposes.

Tax Filing

Submitting required payroll tax documents to federal, state, and local tax authorities.

Total Compensation

The sum of all forms of pay, benefits, and incentives provided to employees.

Timesheets

Records used to track the number of hours worked by employees.

Tax Declaration Form

In India, employees submit a declaration of their proposed investments and expenses for the financial year to their employer. This helps in reducing the amount of tax deducted at source (TDS) from their salary.

Total Cost of Ownership (TCO)

A financial estimate intended to help buyers and owners determine the direct and indirect costs of a product or system.

Third-Party Payroll Services

Companies that provide payroll processing services for other businesses, including tax filings, direct deposits, and compliance with labor laws.

Tax Filing Services

Services provided by payroll outsourcing vendors that include preparing and submitting federal, state, and local tax filings on behalf of a company.

U

Unemployment Insurance

Employer-funded program providing temporary financial assistance to employees who lose their jobs.

Underpayment Correction

Adjustments made to correct underpaid wages to employees.

User Access Control

Security measures that ensure only authorized personnel can access payroll data.

Uptime Guarantee

A commitment from a payroll service provider to ensure their system is operational and accessible for a specified percentage of time.

Unpaid Leave

Authorized time off work without pay.

V

Vacation Pay

Paid time off provided to employees for vacation.

Voluntary Deductions

Employee-authorized deductions, such as for retirement plans or charitable contributions.

Variable Pay

Compensation that varies based on performance or results, such as bonuses and commissions.

Vendor Management

Overseeing and coordinating relationships with external service providers.

Voluntary Benefits

Additional benefits offered by employers that employees can choose to opt into and pay for, such as supplementary health insurance.

W

Workers' Compensation

Insurance providing wage replacement and medical benefits to employees injured on the job.

Wage Garnishment

A legal procedure by which a portion of an employee’s earnings is withheld by an employer for the payment of a debt.

Workforce Analytics

Using data and statistical analysis to understand and improve workforce performance.

Wage Administration

The process of managing employee wages, including setting wage levels, ensuring compliance with wage laws, and handling wage adjustments.

Y

Year-to-Date (YTD)

 The period starting from the beginning of the current year to the present day, often used in financial statements.

Year-End Processing

The tasks involved in finalizing payroll for the calendar year, including issuing W-2 forms and reporting taxes.

Year-End Reconciliation

Ensuring that all payroll records for the year are accurate and complete.

YTD Earnings

The total earnings of an employee from the beginning of the year to the present date..

Z

Zero Defects

A quality management approach that aims to reduce and eliminate defects in processes, including payroll.

Zero Day

Refers to a newly discovered vulnerability in software, including payroll systems, that hackers can exploit.