L - M - N - O - P - Q - R - S - T - U - V - W
Payroll Glossary - A
ABC Test: A set of parameters used by many states to determine the relationship of a worker to the organization for which services are performed. A worker meeting these parameters is considered an independent contractor under the state unemployment insurance law.
Accelerated Deposit Rule: Also known as the one-day rule, it requires employers that accumulate a payroll tax liability of $100,000 or more during a deposit period to deposit the withheld taxes on the next banking day after the day the liability was incurred.
Acceptance Agent: A institution, college, federal agency, or professional tax return preparer that operates under an agreement with the IRS to aid aliens in processing their requests for Individual Taxpayer Identification Numbers (ITIN).
Account: The delineation of assets, expenses, liabilities, and revenues in the G/L, to which debit and credit entries are posted to record changes of value in the account.
Accountable Plan: An employer's business expense reimbursement plan that satisfies all IRS requirements regarding substantiation, business connection, and return of excess amounts in a reasonable period of time.
Accounting Period: The period covered by an income statement (e.g., month, year).
Accrual: The recognition of assets, expenses, liabilities, or revenues before receipt.
AccuWage: A software program available from the Social Security Administration that can be used to test electronic wage reports (Form W-2 information) for proper formatting before submittal to the SSA.
ACH: Automated Clearing House.
Actual Deferral Percentage (ADP): The percentage of wages deferred by employees participating in a salary reduction plan (e.g., §401(k) plan). The Internal Revenue Service uses the ADP to determine whether the plan meets the agency's nondiscrimination requirements.
ADA: Americans with Disabilities Act of 1990.
AD&D: Accidental Death and Dismemberment Insurance.
ADEA: Age Discrimination in Employment Act of 1967.
Advance Earned Income Credit (AEIC): Payments of earned income credit during the year to employ- ees who expect to be eligible for the credit. Employers make the payments out of federal income, social security, and Medicare taxes withheld from the employees wages.
AEIC: Advance Earned Income Credit.
After-tax Deduction: A deduction from an employee's pay that does not reduce the employee's taxable wages. It is taken out after all applicable taxes and deductions have been withheld (e.g., union dues, garnishments, charitable contributions).
Alien: A citizen of a country other than the United States or one of its territories or possessions.
Annual Wage Reporting (AWR): The Social Security Administration's system to record wages reported annually by employers on IRS Form W-2.
APA: American Payroll Association.
ATM: Automated Teller Machine that dispenses cash from an account via a debit card.
Attachment: See Wage Attachment.
Authorization Agreement: In general, a written agreement authorizing the employer to withhold and then distribute some of an employee's net wages to a third party determined by an employee (i.e., direct deposit, union dues, savings bonds, voluntary bankruptcy payments, certain insurance premiums i.e. AFLAC)
Autogen: An IRS program under which the Service will automatically send employers Forms 8109, Federal Tax Deposit Coupons, without a request having to be made.
Automated Clearing House (ACH): A Federal Reserve Bank or private financial institution acting on behalf of an association operating a facility that serves as a clearinghouse for direct deposit transactions. Entries are received and transmitted by the ACH under the rules of the association.
AWR: Annual Wage Reporting