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Payroll Glossary - E
Early Retirement Age: The earliest age at which social security retirement benefits can be received. Some company plans may provide for benefits at an different retirement age.
Earned Income Credit (EIC): A tax credit available to certain low-income employees. It may be taken with the employee's Federal Form 1040 (Individual Tax Return), or paid in advance by the employer during the year on each paycheck.
Educational Assistance Program: An employer only plan providing for payment or reimbursement of certain employee's educational expenses under specific circumstances.
EEOC: Equal Employment Opportunity Commission. This agency is responsible for administering the Civil Rights Act of 1964, the Age Discrimination in Employment Act of 1967, the Americans With Disabilities Act of 1990, and the Equal Pay Act of 1963 and others.
EFT: Electronic Funds Transfer.
EFTPS: Electronic Federal Tax Payment System.
EIC: Earned Income Credit.
EIN: Employer Identification Number.
Elective Deferral: The amount of pretax compensation an employee can choose to contribute to a qualified deferred compensation plan (e.g., a §401(k) plan), also known as pretax contributions.
Electronic Federal Tax Payment System (EFTPS): System that requires employers to make federal tax deposits electronically through the ACH system.
Employee: An individual who performs services for another individual or an organization in return for compensation. See also Common Law Employee, Covered Employees and Independent Contractor.
Employee Business Expenses: Amounts paid by an employee for travel, lodging, meals, etc., while on their employer's business. Reimbursements for these expenses may be excluded from taxable income if properly accounted for.
Employee Retirement Income Security Act of 1974 (ERISA): Federal law regulating how business pension and benefit plans operate.
Employee Self-Service: An application that gives an employee electronic access to personal data in the company files and allows the employee to review, print out, and/or update some portions of that data.
Employee Stock Purchase Plan (ESPP): An employer plan where all qualifing employees have an opportunity to buy some of the employer's capital stock possibly at a market discount, subject to strict limitations.
Employee's Withholding Allowance Certificate: The federal IRS Form W-4 or an equivalent state or local form where the employee states their withholding allowances. The form is used by the employer to calculate the amount of federal, state, and local income taxes to withhold from the employee's payroll.
Employer: An individual or organization that hires individuals to perform services in return for compensation, it also has the authority to control and direct the work of those individuals as part of the relationship.
Employer Identification Number (EIN): The employer's account number with the Internal Revenue Service, it consists of nine digits (00-0000000) See also IRS Form SS-4..
Employer's Supplemental Tax Guide: IRS Publication 15-A. This publication has detailed information for employers especially in the areas of employee status determinations and sick pay taxation and reporting.
Employer's Tax Guide to Fringe Benefits: Internal Revenue Service Pub 15-B. This pub has detailed information for employers on fringe benefits. as well as the valuation, taxation, and reporting requirements for taxable fringe benefits.
Employment Tax Efile System: The Internal Revenue Services's system for electronically filing Forms 941 and 940.
Employment Verification: The process of checking that a new employee will be authorized to work in the United States.
TRAC: Employer's Tip Peporting Alternative Commitment.
Enterprise Coverage: A test for deciding if an employer's entire operation is covered by the Fair Labor Standards Act (FLSA). Based on the employees conection with interstate commerce and the employer's annual volume of revenue.
EPA: See Equal Pay Act.
Equal Pay Act (EPA): A federal law requiring equal pay for men and women performing work requiring equal skill, effort, and responsibility under similar working conditions. It was made part of the FLSA in 1963.
ERISA: Employee Retirement Income Security Act of 1974.
Escheat: In the context of payroll, the turning over of uncollected wages to the state after a period of time under state law.
Exempt Employees: Employees who are exempt from overtime pay under FLSA.
Expatriate: For United States payroll purposes, a US citizen or resident alien who lives and works outside the United States.
Experience Rating: In the context of unemployment compensation, it is the employer's record of unemployment claims paaid. This record is used as part of the determination of the employer's unemployment tax rate (i.e., the higher the claim rate, the higher the tax rate).
Extended Benefits: Unemployment benefits paid past the syandard 20 or 26 weeks allowed by most states (must be authorized by federal legislation).
External Audit: An audit of an organization's financial statements by a independent CPA