Plain English definitions of the terms that turn up on a pay stub, on a W-4 and in the calculators here.
62 terms
An extra 0.9% of Medicare tax on wages above a threshold set by filing status. Only the employee pays it, and your employer starts withholding once your pay with them passes the single filer threshold, whatever your actual status.
To scale a single paycheck up to a full year, usually by multiplying by the number of pay periods. Almost every withholding formula annualizes your pay, works out the tax on that yearly figure, then divides it back down.
Paid every two weeks, so 26 paychecks a year. It is not the same as semimonthly, which is 24, and the difference is what produces a three-paycheck month.
Pay on top of your normal wages, for performance or a one-off reason. For withholding it counts as supplemental wages, which is why more tax often comes out of it than you expect.
Also seen as Section 125, Cafe 125
An employer benefit plan that lets you pay for health cover and similar benefits out of pre-tax pay. It usually appears on a pay stub or W-2 under a name like Cafe 125.
A flat weekly or monthly charge some cities make on anyone working inside the city limits, withheld by the employer. It is a fixed amount rather than a percentage, so everyone pays the same whatever they earn.
Pay worked out from sales or results rather than from time. Paid separately from regular wages, it is withheld as supplemental wages.
The amount claimed in Step 3 of the federal W-4 for children and other dependents. It comes off the tax itself rather than off the wages the tax is worked out on.
Twice the normal hourly rate. Federal law does not require it: it comes from state law in a few situations, or from a contract or an employer policy.
The share of your whole income that actually goes in tax. Where rates rise in bands it is always lower than the marginal rate, because the earlier bands are charged at less.
Also seen as 401(k) contribution
The part of your pay you choose to put into a retirement plan such as a 401(k). A traditional deferral lowers the pay that income tax is worked out on, but not the pay that Social Security and Medicare come out of.
Also seen as non-exempt, exempt employee
Whether the overtime rules apply to you. A non-exempt employee must be paid overtime; an exempt one is not entitled to it, and being on a salary does not by itself make someone exempt.
Also seen as Fed MWT/EE
The pay stub label for the employee share of Medicare tax. EE means employee, and the matching employer line is ER.
Also seen as FIT
The tax withheld from your pay for the federal government, worked out from your wages, how often you are paid and what is on your W-4. It is the only tax on a paycheck that a form can move.
The two payroll taxes that fund Social Security and Medicare, taken as a fixed percentage of wages. No form changes them.
The box ticked in Step 1 of the W-4, such as single or married filing jointly, which decides the table your employer withholds from.
Also seen as FSA
An account for health or dependent care costs funded from pre-tax pay. Unlike a health savings account, the money generally has to be spent within the plan year.
A court or agency order telling your employer to withhold part of your pay to settle a debt. It comes out after tax, and how much can be taken is limited by law.
Everything you earned in the pay period before anything is taken out. Every other figure on a pay stub is worked out from it.
A filing status for someone unmarried who keeps up a home for a qualifying person. For withholding it usually sits between single and married filing jointly.
Also seen as HSA
An account paired with a high-deductible health plan. Contributions made through payroll escape income tax and, unusually among pre-tax benefits, Social Security and Medicare as well.
The value of a non-cash benefit that still counts as taxable pay, such as group term life insurance above the tax-free limit. It raises the wages your tax is figured on without raising the cash you take home.
A tax on wages charged by a city, county or school district rather than by the state. Most states have none, and a few leave a large part of the bill to the locality.
A flat annual charge some Pennsylvania municipalities make on people who work there, collected a little at a time through payroll.
The rate charged on your next dollar of income. It is the figure that matters when you weigh up a raise, and it is higher than the effective rate.
The federal health insurance program funded by a tax of 1.45% on all your wages, matched by your employer. There is no ceiling, so it never stops part way through the year.
The checkbox in Step 2 of the W-4 for a household with two incomes. Ticking it moves you to a higher withholding table, so that two jobs together are not under-withheld.
Also seen as take-home pay
What is left after every tax and deduction, and the only figure on a pay stub that reaches your account.
Tax withheld by a state for work done inside its borders by somebody who lives elsewhere. Where the work is done usually decides who taxes the wages, not where you sleep.
Old-Age, Survivors and Disability Insurance, the formal name for Social Security and the label many pay stubs use for the 6.2% employee share.
A local tax on wages earned in a city or county, common in Kentucky and parts of the Midwest. It is usually a flat percentage with nothing subtracted first.
Pay for hours beyond the weekly limit, at one and a half times the regular rate under federal law. The multiplier applies to the regular rate rather than to the base rate.
Also seen as PFML, paid leave premium
A state insurance scheme that pays part of your wages while you are off for a new child, your own health or a family member. Where it exists it is funded by a payroll premium, sometimes shared with the employer.
The stretch of time one paycheck covers. The number of pay periods in a year is what every withholding formula uses to move between a paycheck and an annual figure.
Also seen as payslip
The statement that comes with a paycheck, listing gross pay, each deduction and the running totals for the year.
The withholding calculation that annualizes your wages and applies a rate schedule. It is what payroll software uses, and what the calculators here follow.
Money taken out after tax has been worked out, such as a Roth contribution, a garnishment or union dues. It lowers your take-home pay without lowering your tax.
Money taken out before tax is worked out, such as health premiums or a traditional 401(k). It lowers the wages your tax is calculated on, so it costs you less than the amount deducted.
A salary adjusted for part of a pay period, used when somebody starts, leaves or changes hours part way through.
The rate at which paid time off builds up, usually a number of hours each pay period or for each hour worked.
Unused paid time off paid out as cash, usually when a job ends. It is wages, and is normally withheld as supplemental wages.
Also seen as reciprocal agreement
An agreement between two states that lets you pay income tax only where you live rather than where you work. It has to be claimed on a form given to your employer.
Also seen as regular rate
The hourly figure overtime is worked out from. It includes shift differentials and non-discretionary bonuses, so it is often higher than the rate on your offer letter.
A retirement contribution taken after tax. It does not lower this year's tax bill, and qualified withdrawals in retirement are not taxed.
A local income tax collected for a school district, used in Ohio and a few other states. The district you live in decides whether you owe it.
Paid twice a month, so 24 paychecks a year, usually on fixed dates. Each paycheck is larger than a biweekly one for the same salary.
Pay offered when a job ends. It counts as wages for tax and is usually withheld as supplemental wages.
Extra pay for working nights, weekends or other unsocial hours, either a percentage of the base rate or a set amount an hour.
Also seen as wage base, taxable maximum
The point in the year where Social Security tax stops being taken. Above it only Medicare continues, so a late-year paycheck can be larger than an earlier one.
The flat amount taken off income before tax is worked out, for anyone who does not itemize. Federal withholding builds it into the tables rather than showing it as a line on your stub.
Also seen as SDI
A state scheme paying part of your wages while illness or injury keeps you from working, funded by a payroll deduction in the few states that run one.
The tax a state takes from your wages. Nine states take nothing at all, and the rest run from a flat percentage to brackets reaching double digits.
Pay outside your normal wages, such as a bonus, commission, severance or PTO payout. Employers may withhold it at a flat rate instead of through the usual tables.
The part of your pay that a particular tax applies to, after whatever that tax lets you subtract. Each tax defines it differently, which is why the figures on a stub do not match each other.
A month in which a biweekly schedule produces three paychecks rather than two. It happens twice a year and is a quirk of the calendar, not extra pay.
Also seen as SUTA, FUTA
The scheme that pays benefits to people who lose a job. In almost every state it is charged to the employer, so it should not appear as a deduction on your stub.
The year-end statement your employer sends you and the IRS, showing what you were paid and what was withheld.
The form that tells your employer how much federal income tax to withhold. Since 2020 it asks about filing status, other jobs and dependents rather than about allowances.
A withholding calculation that reads the figure from a printed table of wage ranges. It can differ by a few cents from the percentage method, because it charges the middle of each band.
Money an employer takes from your pay and sends to a tax authority on your behalf. It is an estimate of what you will owe, which your return then settles.
Also seen as allowance
A fixed amount a state takes off your wages before working out state tax, claimed on that state's own form. Federal withholding dropped allowances in 2020, but many states kept them.
Also seen as YTD
The running total of pay, or of a deduction, since the start of the calendar year. It is what tells you when a capped tax such as Social Security will stop.
No term matches that. Try a shorter word, or the name as it appears on your pay stub.