Payroll Calendar Year

Per federal, state & local compliance requirements all payroll reporting is on a calendar year basis, January 1, 20XX though December 31, 20XX.

Employee Classifications

Exempt Employee: Classification of an employee whose job title and description makes them exempt from provisions of the Fair Labor Standards Act. Employees in this classification receives a set gross pay regardless on hours worked. 

Non-Exempt Employees: Classification of an employee whose job title and description are covered by the provisions of the Fair Labor Standards Act (FLSA). Staff members under this this classification received pay based on the number of hours worked in the worked week.

Gross and Net Pay

Gross Pay: The total amount of payment made to an employee every pay period prior to any taxes and/ or pre–tax or post–tax deductions.

Net Pay: The total amount of payment after any applicable deductions including Federal, State, Social Security and Medicare B taxes and pre–tax or post tax deductions

Earnings: Record of total gross wages/salary paid to employees for a set period 

Employee Taxes

All tax withholdings from payroll payments are done accordance with State and Federal tax laws.   

FICA (OASDI): Mandatory Federal Insurance Contributions

Medicare Tax: The hospital insurance part of FICA; Additional Medicare Tax: Any gross income above 200k

Federal Withholding: Based on the Federal W-4 elections. The “Employee’s Withholding Allowance Certificate” that determines federal tax withholdings.

State Taxes: Each state has their own withholding form. State forms differ but all determines the state tax withholdings for employees .

Other Deductions

Garnishment: Money is legally withheld from employees’ paycheck and sent to another party. It refers to a legal process that instructs a third party to deduct payments directly from a debtor’s wage or bank account.  In Workday this is called "Withholding Orders". 

Workday Terms

On Demand: The Workday/Payroll System’s term for any check processed and printed outside the realm of normal scheduled payroll processing cycles

Pay Components: The Workday/Payroll System’s term for any earning, deduction, or tax codes

Wage Payment: The Workday/Payroll System’s term for employees “Direct Deposit”

Withholding Orders: The Workday/Payroll System’s term for employees “Garnishment Deductions”