Work, Time Tracking and Payroll Terms and Definitions Dictionary
Work, time tracking, and payroll terms are the shared language of paying people correctly, from overtime and exempt status to accruals, FICA, and net pay. This dictionary defines 198 terms in plain English, with expanded explanations of the payroll and labor terms that carry legal or financial weight and links to the U.S. Department of Labor and IRS for the official federal rules. Search any term below or jump to a letter.
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Key Payroll Terms at a Glance
These are the terms that cause the most payroll mistakes. Each links to its full definition below.
| Term | Short Definition | Why It Matters |
|---|---|---|
| Gross Pay | Total earnings before deductions | Starting point for every paycheck |
| Net Pay | Take-home pay after deductions | What the employee actually receives |
| Overtime | 1.5 times the regular rate over 40 hours in a workweek (federal) | The most common wage and hour error |
| Workweek | A fixed, recurring 168-hour period | Overtime is calculated per workweek |
| Exempt | Not covered by FLSA overtime, based on salary and duties | Misclassification creates back pay liability |
| FICA | Social Security and Medicare payroll tax | Withheld from employees and matched by employers |
| PTO | Banked paid leave, granted or accrued | Balances must be tracked accurately |
| Rounding | Adjusting punches to set intervals | Must not consistently shortchange employees |
Gross Pay to Net Pay: How the Terms Connect
Most payroll terms fit into one sequence. Time tracking records hours on a timesheet. Hours in each workweek determine regular and overtime pay for nonexempt employees. Regular pay plus overtime, bonuses, and differentials equals gross pay. Taxes such as FICA and income tax withholding, plus benefit premiums and any garnishments, are subtracted to reach net pay, which is paid by direct deposit or check at the end of the pay period. The employer then pays its own share of taxes, including FICA and FUTA.
Federal rules set the floor. States and cities often add their own minimum wage, overtime, break, and leave rules, so confirm what applies to your locations through the Department of Labor state resources.
A
Absence
Absence refers to any period when an employee is not present at work during their scheduled time. This can include planned absences such as vacation or sick leave, as well as unplanned absences like illness or emergencies. Tracking absence helps businesses manage staffing, maintain productivity, and ensure compliance with labor policies.
Absence Tracking
Absence tracking is the process of monitoring and recording when employees are not working. This includes tracking vacation days, sick leave, personal time, and unexcused absences. Effective absence tracking helps organizations plan coverage, manage workloads, and identify patterns such as excessive absenteeism.
Accidental Death & Dismemberment (AD&D)
AD&D insurance is a type of coverage that provides financial benefits to employees or their beneficiaries if they suffer severe injury or death due to an accident. It is often included as part of an employee benefits package and supplements standard life insurance.
Accruals
Accruals are the gradual build-up of paid leave, such as PTO, vacation, or sick time, as an employee works. A common setup is a set number of hours earned per hour worked or per pay period, often with a cap on how much can be carried over. Accrual balances should appear on the pay stub or in the time tracking system so employees and managers can see what is available.
Activity Report
An activity report is a detailed summary of tasks, work performed, or time spent during a specific period. These reports are commonly used to track productivity, monitor progress, and provide visibility into employee or project performance.
Actual Cost of Work Performed (ACWP)
ACWP is a project management metric that measures the actual cost incurred for completed work. It is used in earned value management to compare planned costs versus actual spending and helps organizations control budgets.
Adjusted Gross Income (AGI)
AGI is an individual’s total gross income minus allowable deductions such as retirement contributions or student loan interest. It is used to determine taxable income and eligibility for certain tax credits.
Admin
An admin is a user with elevated permissions within a system. Admins can manage users, configure settings, approve time entries, and oversee system activity.
Android Time Tracking App
A mobile application designed for Android devices that allows employees to track work hours, log time, and manage tasks from their phones or tablets.
Annualized Salary
Annualized salary represents the total income an employee would earn over a full year, based on their current rate of pay. This is useful for comparing compensation across employees or roles.
Approval
Approval is the process of reviewing and authorizing actions such as time entries, expense reports, or leave requests. It ensures accuracy and accountability.
Approval Workflow
An approval workflow is a structured process that defines how requests are reviewed and approved within an organization. It often includes multiple steps and stakeholders.
Attendance Tracking
Attendance tracking monitors when employees are present, late, or absent. It helps organizations manage scheduling, enforce policies, and maintain accurate records.
Automated Clearing House (ACH)
ACH is the U.S. electronic network that moves money between bank accounts in batches. Payroll direct deposit runs on ACH, which is why payroll usually has to be submitted one to two business days before payday.
Automatic Time Tracking
Automatic time tracking uses software to record work activity without manual input, often by tracking computer usage, applications, or activity patterns.
B
Back Pay
Back pay is wages owed for work already performed that were not paid correctly, such as missed overtime, an underpaid rate, or a payroll error. Under federal law, the Wage and Hour Division can supervise payment of back wages when the FLSA was not followed.
Base Pay
Base pay is the standard rate of compensation an employee earns before bonuses, overtime, or additional incentives.
Benefit Accrual
Benefit accrual is the process by which employees earn benefits over time, such as PTO or retirement contributions.
Benefits
Benefits are non-wage compensation provided to employees, including health insurance, retirement plans, and paid leave.
Billable Time
Billable time is work that can be charged to a client under the engagement terms, such as client meetings, analysis, and deliverables. Billable hours divided by total hours worked gives the utilization rate, a core metric for consulting, legal, and agency businesses.
Billing Rates
Billing rates are the hourly or project-based rates charged to clients for services.
Biometric Identifiers
Biometric identifiers are unique physical characteristics, such as fingerprints or facial recognition, used for identity verification.
Biweekly Pay
Biweekly pay means employees are paid every two weeks, usually on the same weekday, which produces 26 paychecks in most years and 27 in an occasional year. Do not confuse it with semimonthly pay, which is twice a month on set dates for 24 paychecks.
Bonus
A bonus is additional compensation awarded for performance, company success, or specific achievements.
Bring Your Own Device (BYOD)
BYOD is a policy allowing employees to use personal devices for work purposes.
Browser Extension Time Tracking
A tool that tracks time directly within a web browser, often used for tracking time spent on tasks or websites.
Buddy Punching
Buddy punching happens when one employee clocks in or out for another, so the business pays for time that was not worked. PINs, photo capture, biometric clocks, and geofenced mobile clock-ins are common ways to prevent it.
Budget Tracking
Budget tracking involves monitoring actual expenses against planned budgets to control spending.
C
Calendar
A calendar is used to schedule work, track deadlines, and organize tasks or shifts.
Calendar Year
A calendar year runs from January 1 to December 31.
Check In / Check Out
Recording the start and end times of an employee’s work shift.
Child Support Withholding
A required payroll deduction for court-ordered child support payments.
Client Time Reports
Reports that show time spent on client work for billing or analysis.
Clock / Time Clock
A system used to record employee work hours.
Clocking In and Out
The act of starting and ending a work shift.
Cloud-Based Time Tracking Software
Online tools that store time data in the cloud, allowing access from anywhere.
Compa-Ratio
A measure comparing an employee’s salary to the market average.
Compensatory Time (Comp Time)
Comp time is paid time off given instead of overtime pay. Under the federal FLSA, comp time in place of overtime is generally limited to public sector employers. Private employers generally must pay overtime in cash to nonexempt employees. See the U.S. Department of Labor for the rules.
Conditional Calculation
Calculations triggered based on specific conditions or rules.
Critical Path
The sequence of tasks that determines the shortest time to complete a project.
Critical Path Method Scheduling
A project management technique used to identify critical tasks and timelines.
D
Date / Day
Units used to organize and track time.
Day Breaker
A defined cutoff time that separates workdays, often used in time tracking systems.
Daylight Saving Time (DST)
A seasonal adjustment of clocks to extend daylight hours.
Dependent
An individual financially supported by an employee.
Desktop Time Tracker
Software installed on a computer to track time worked.
Direct Deposit
Direct deposit sends net pay electronically into an employee's bank account through the ACH network instead of issuing a paper check. It is faster, cheaper, and easier to reconcile.
Disability Insurance
Insurance that provides income if an employee cannot work due to illness or injury.
Disposable Earnings
Disposable earnings are what remains of an employee's pay after legally required deductions, such as federal, state, and local taxes and Social Security. Federal limits on wage garnishment are calculated from disposable earnings, as explained by the Department of Labor.
Double Overtime / Double Time
Double time is pay at twice the regular rate. Federal law requires overtime at 1.5 times the regular rate for hours over 40 in a workweek, but it does not require double time. Double time comes from employer policy, union agreements, or some state laws, so check the rules that apply to you through the U.S. Department of Labor and your state labor office.
E
Early Start / Early Finish
Project scheduling terms indicating the earliest time tasks can begin or end.
Earned Income Credit (EIC)
A tax credit for low- to moderate-income workers.
Eisenhower Matrix
A productivity tool for prioritizing tasks based on urgency and importance.
Electronic Funds Transfer (EFT)
Digital transfer of money between accounts.
Employee
An individual hired to perform work for an employer.
Employee Leave
Authorized time away from work.
Employee Monitoring
Tracking employee activity or performance.
Employer
An organization or individual that hires employees.
Employer Identification Number (EIN)
An EIN is the nine-digit federal tax ID the IRS assigns to a business. It is used on payroll tax filings, W-2s, and business tax returns, and employers need one before running payroll. You can apply at IRS.gov.
Estimations
Projected time, cost, or resources required for tasks.
Exempt Employees
Exempt employees are not covered by the FLSA minimum wage and overtime requirements. To be exempt under the most common federal exemptions, an employee generally must be paid on a salary basis, earn at least the federal salary threshold, and perform qualifying executive, administrative, or professional duties. Job title alone never makes someone exempt. See the U.S. Department of Labor for the current tests.
Expense Reports / Expense Tracking
Recording and managing business-related expenses.
Exporting Tracked Time
Transferring time data to external systems such as payroll or billing.
F
Face Recognition Reader
A biometric device that uses facial features to identify and verify employees when clocking in or out. It helps prevent time fraud such as buddy punching and improves accuracy in time tracking systems.
Fair Labor Standards Act (FLSA)
The FLSA is the federal law that sets minimum wage, overtime pay, recordkeeping, and child labor standards for most U.S. employers. It requires overtime at 1.5 times the regular rate for nonexempt employees who work more than 40 hours in a workweek. States can set stricter rules. Details are on the U.S. Department of Labor site.
Family and Medical Leave Act (FMLA)
The FMLA is a federal law that gives eligible employees of covered employers up to 12 weeks of unpaid, job-protected leave in a 12-month period for qualifying family and medical reasons, with group health coverage continued. Eligibility and coverage rules are on the Department of Labor FMLA page.
Federal Insurance Contributions Act (FICA)
FICA is the federal payroll tax that funds Social Security and Medicare. The employer withholds the employee share from wages and pays a matching employer share: 6.2% each for Social Security up to an annual wage base, and 1.45% each for Medicare, with an additional Medicare tax withheld on high earners. See IRS Topic 751.
Federal Unemployment Tax Act (FUTA)
FUTA is a federal payroll tax paid only by employers, not withheld from employees, that funds unemployment programs. It applies to a limited amount of wages per employee, and most employers receive a credit for paying state unemployment tax. See IRS guidance on FUTA.
Fingerprint Reader
A biometric time tracking tool that verifies employee identity using fingerprint scans. It enhances security and prevents time theft.
Fiscal Year
A fiscal year is any 12-month accounting period a business uses for budgeting and reporting. It can match the calendar year or start in another month, such as July through June.
Fixed Fee
A pricing model where a set amount is charged for a project regardless of the time spent completing it.
Full-Time
An employment classification typically based on working a standard number of hours per week, often 35–40 hours depending on company policy.
Full-Time Equivalent (FTE)
FTE converts part-time hours into full-time units. If full time is 40 hours a week, two employees working 20 hours each equal 1.0 FTE. FTE is used for budgeting, staffing, and some benefit rules.
G
Garnishment
A garnishment is a court or agency order requiring an employer to withhold part of an employee's pay and send it to a creditor or agency, such as for child support, tax levies, or debts. Federal law limits how much can be garnished, and employers must follow the order exactly. See the Department of Labor garnishment page.
Geofencing
Geofencing sets a virtual boundary around a job site or office so a mobile time clock only allows clock-ins inside that area, or flags punches made outside it. It is common for field, construction, and multi-location teams.
Global Positioning System (GPS)
A satellite-based system used to track location. In workforce management, it helps verify employee location during work hours.
Gross Pay
Gross pay is total earnings before any deductions: regular wages or salary plus overtime, bonuses, commissions, and other taxable pay for the period. Gross pay minus taxes and deductions equals net pay.
H
Holiday Pay
Holiday pay is pay for a holiday, either as paid time off or as a premium for working on the holiday. Federal law does not require private employers to give paid holidays or holiday premiums for most employees, so holiday pay usually comes from company policy or a contract. See the Department of Labor holiday page.
Hour
A unit of time measurement commonly used in payroll and time tracking systems to calculate wages and work duration.
Hourly Billing
A pricing structure where clients are charged based on the number of hours worked.
Hourly Rate
The hourly rate is the amount an employee is paid for each hour worked. Overtime for nonexempt employees is based on the regular rate of pay, which can include some bonuses and differentials on top of the base hourly rate.
Human Resources (HR)
The department responsible for managing employee relations, hiring, payroll, benefits, compliance, and workplace policies.
I
Idle Time
Periods when an employee is not actively working during scheduled hours. This can be used to assess productivity or identify inefficiencies.
Individual Retirement Account (IRA)
A savings account that provides tax advantages for individuals saving for retirement.
Integrations
Connections between software systems that allow data to flow between tools such as payroll, project management, and time tracking platforms.
Invoice
A document issued to request payment for services or products provided.
iOS Time Tracking App
A mobile application designed for Apple devices that enables employees to track work hours and manage tasks on the go.
J
Job Costing
Job costing tracks labor, materials, and overhead against a specific job or project so you can compare actual cost to the price or budget. Accurate time entries tagged to jobs are the foundation of labor job costing.
K
Key Performance Indicators (KPIs)
Measurable values used to evaluate employee, team, or business performance against defined goals.
L
Labor Costs
Labor costs are the total cost of employing people: wages and salaries plus employer payroll taxes, benefits, workers' compensation, and paid leave. Labor cost as a percentage of revenue is a key budgeting metric.
Labor Law Compliance
Adhering to laws and regulations related to wages, working hours, employee rights, and workplace standards.
Labor Rate
The cost of labor per hour or per unit of work.
Leave Management
The process of tracking and managing employee time off, including vacation, sick leave, and other absences.
Locking Timesheets
Locking timesheets prevents edits after a pay period is approved, so payroll runs on final numbers and every later change goes through a documented correction.
Lunch Break
A lunch break is a meal period during a shift. Under federal law, bona fide meal periods, typically 30 minutes or more when the employee is fully relieved of duty, generally do not have to be paid, while short rest breaks usually count as hours worked. Federal law does not require meal breaks, but some states do. See the Department of Labor hours worked fact sheet.
M
Manager
An individual responsible for overseeing employees, managing performance, and ensuring tasks are completed.
Manual Time Tracking
The process of recording work hours manually, often using spreadsheets or written logs.
Master Schedule
A comprehensive schedule that outlines all tasks, shifts, or projects across an organization.
Medicaid
A government program that provides healthcare coverage to eligible low-income individuals.
Medicare
A federal health insurance program primarily for individuals aged 65 and older.
Minimum Wage
Minimum wage is the lowest hourly pay an employer can legally pay covered employees. There is a federal minimum under the FLSA, and many states and cities set higher rates. When more than one applies, the employee gets the higher rate. Check the Department of Labor minimum wage page.
Minute
A unit of time used in time tracking and payroll calculations.
Mobile App
A software application used on smartphones or tablets to manage work, track time, or communicate.
Monthly Billing
A billing cycle where clients are invoiced once per month.
Monthly Retainer
A fixed monthly fee paid for ongoing services.
Mobile Time Tracking
Tracking employee time using mobile devices, often with GPS or location verification.
N
Negative Total
A situation where recorded time or balances fall below zero, often due to adjustments or errors.
Net Pay
Net pay, or take-home pay, is what the employee actually receives after taxes, benefit premiums, retirement contributions, garnishments, and other deductions are subtracted from gross pay.
Nonbillable Hours
Nonbillable hours are work time that cannot be charged to a client, such as internal meetings, admin, training, and business development. Tracking them shows where capacity goes and whether utilization targets are realistic.
Nonexempt Employees
Nonexempt employees are covered by FLSA minimum wage and overtime rules. They must be paid at least minimum wage for all hours worked and overtime at 1.5 times their regular rate for hours over 40 in a workweek. Most hourly workers are nonexempt.
O
On-Call Time
On-call time is time an employee must be available to work if needed. Under federal law, whether it counts as paid hours depends on how restricted the employee is. Someone required to stay at the workplace is generally working, while someone free to use the time for their own purposes generally is not. See the U.S. Department of Labor for guidance.
Online Time Clock
A web-based system that allows employees to clock in and out remotely.
Overtime
Overtime is pay for hours beyond a legal or policy limit. Under the federal FLSA, nonexempt employees must receive at least 1.5 times their regular rate for hours worked over 40 in a single workweek. Some states add daily overtime or other rules. The U.S. Department of Labor explains the federal requirements.
P
Paid Time Off (PTO)
PTO is a bank of paid hours employees can use for vacation, illness, or personal needs. It can be granted up front or accrued each pay period. Federal law does not require paid vacation or PTO, but some states and cities require paid sick leave or payout rules.
Part-Time Employee
An employee who works fewer hours than a full-time employee.
Partial Pay
Compensation for a portion of a pay period or incomplete work.
Payroll
Payroll is the process of calculating and paying employee wages, withholding and depositing taxes, and keeping the required records. It covers time collection, gross-to-net calculation, payment, tax filings, and reporting.
Payroll Audit Report
A detailed review of payroll records to ensure accuracy and compliance.
Payroll Cycle
The payroll cycle is the full sequence that repeats each pay period: collect and approve time, calculate gross pay, apply deductions, pay employees, and remit taxes and reports.
Pay Period
A pay period is the recurring span of time for which employees are paid, such as weekly, biweekly, semimonthly, or monthly. Hours worked in the period are totaled and paid on the following payday.
Pay Stub
A pay stub is the statement that accompanies each paycheck showing gross pay, hours, each tax and deduction, net pay, and often year-to-date totals and leave balances.
Percentage Deductions
Deductions calculated as a percentage of an employee’s earnings.
Period of Initial Eligibility
The waiting period before an employee becomes eligible for benefits.
Permanent Resident
A non-citizen legally authorized to live and work in a country.
Pomodoro Timer
A productivity technique that uses timed intervals (usually 25 minutes) to improve focus.
Productivity Tracking
Monitoring employee output and efficiency.
Project-Based Rate
A fixed rate assigned to a project rather than hourly billing.
Project Budget
The total planned cost for a project.
Project Manager Time Reports
Reports showing how time is allocated across projects.
Project Tracking
Monitoring the progress and performance of projects.
Punch Clock
A system used to record employee work hours.
Q
Quarterly Payroll Reports
Reports filed every three months to summarize payroll activity and taxes.
R
Real-Time Time Tracking
Real-time time tracking records work as it happens with a running timer or live clock-in, rather than entering hours afterward. It is more accurate than reconstructing a week from memory.
Reasonable Basis
A legal standard used to justify business decisions, particularly in labor and tax contexts.
Recurring Tasks
Tasks that repeat on a regular schedule.
Remuneration
Total compensation paid to an employee, including wages and benefits.
Retroactive Pay
Retroactive pay, or retro pay, makes up the difference when an employee was paid at an old rate after a raise took effect, or when a rate error is corrected. It covers a past period at the new rate. It differs from back pay, which covers wages that were not paid at all.
Rounding of Time
Rounding adjusts punch times to set intervals, such as the nearest 5, 6, or 15 minutes. Federal rules allow rounding only if it averages out so employees are fully paid over time and does not consistently favor the employer. See the U.S. Department of Labor for recordkeeping guidance.
S
S-Curve
A project management graph that shows cumulative progress over time.
Salary
A salary is a fixed amount paid each pay period regardless of the exact hours worked. Being paid a salary does not by itself make an employee exempt from overtime. They must also meet the salary level and duties tests.
Schedule Risk
The likelihood that a project will not be completed on time.
Scheduling
The process of assigning work shifts or tasks.
Second
A unit of time measurement.
Self-Employment Tax
Self-employment tax is the Social Security and Medicare tax paid by people who work for themselves. It covers both the employee and employer shares because there is no separate employer. See IRS self-employment tax guidance.
Severance Pay
Compensation provided when employment ends.
Shift
A scheduled work period.
Shift Differential
A shift differential is extra pay for working less desirable shifts, such as nights, weekends, or holidays, paid as a flat amount or percentage per hour. Federal law does not require it, but when paid, it is generally included in the regular rate used to calculate overtime.
Shift Swapping
When employees exchange work shifts.
Sick Leave
Paid or unpaid time off due to illness.
Social Security Disability Insurance (SSDI)
A government program providing income to individuals unable to work due to disability.
Social Security Number (SSN)
A unique identification number used for tax and employment purposes.
Split Shift
A split shift divides one workday into two or more work periods separated by an unpaid break longer than a normal meal period, such as a restaurant worker covering lunch and dinner. Some states require extra pay for split shifts.
Spreadsheet
A tool used to organize, calculate, and analyze data.
T
Tardiness
Late arrival to work.
Task-Based Rate
Payment based on completing tasks rather than time worked.
Task List
A list of tasks to be completed.
Task Management
Organizing and prioritizing tasks.
Task Tracking
Monitoring the progress of tasks.
Taxable
Income subject to taxation.
Tax Bracket
A range of income taxed at a specific rate.
Team Member-Based Rate
Billing or cost rate assigned to specific team members.
Team Time Reports
Reports showing time worked by a team.
Time
A measurable period used to track work.
Time Clock
A system used to record employee hours.
Time Clock Calculator
A tool used to calculate hours worked.
Time Frame
A defined period for completing tasks.
Time Fraud
Intentional manipulation of time records.
Time Log
A record of time spent on tasks.
Time Management
The process of planning and controlling time use.
Time Management Skills
Abilities that improve productivity and efficiency.
Timesheet
A timesheet records the hours an employee worked in a period, usually by day, with start and end times, breaks, and often the project or task. Approved timesheets feed payroll and client billing. Federal law requires employers to keep accurate hours records for nonexempt employees.
Time Theft
Time theft is being paid for time not actually worked, such as buddy punching, padding timesheets, or extended unapproved breaks. Note the reverse also matters: an employer that fails to pay nonexempt employees for all hours worked, including off-the-clock work, can owe back wages.
Time Tracker
A tool used to record time.
Time Tracking
The process of monitoring work hours.
Time Tracking Tags
Labels used to categorize tracked time.
Time Zone
A geographic region with a standard time.
Timeboxing
Allocating fixed time periods to tasks.
Timecard
A record of employee work hours.
Timekeeping
The process of recording work time.
Timeline
A visual representation of tasks over time.
Timesheet Reminders
Notifications prompting employees to submit time.
Timesheet Template
A pre-designed format for recording time.
To-Do List
A list of tasks to complete.
Transaction Status
The current state of a payment or process.
Triple Overtime
Triple overtime is pay at three times the regular rate. It is not required by federal law and is rare. When it exists, it comes from employer policy or a union agreement, often for work on major holidays.
U
Unemployment
The state of not having a job.
Universal Time (UTC)
A global time standard.
Upper Management Time Reports
Reports summarizing time and performance for leadership.
V
Vacation Tracking
Monitoring employee vacation time.
Variable Schedule
A work schedule that changes over time.
W
Wage
Payment for labor.
Work Log
A record of work activities.
Work Schedule
Planned work hours.
Work Timer
A tool used to measure time spent working.
Workforce Management
Managing employees, schedules, and productivity.
Workweek
Under the FLSA, a workweek is a fixed and regularly recurring period of 168 hours, or seven consecutive 24-hour periods. It can start on any day and at any hour, but once set it stays fixed. Overtime is calculated per workweek, and hours cannot be averaged across two workweeks. See the U.S. Department of Labor.
Y
Year
A 12-month period.
Year-to-Date (YTD)
Year-to-date totals add up earnings, taxes, and deductions from the first day of the year through the current pay date. YTD figures appear on pay stubs and help track wage base limits and benefit caps.
Put These Terms to Work
These terms are more than definitions. They describe the systems that decide whether people are paid correctly and whether labor costs match your budget. When time tracking, scheduling, PTO, and payroll live in one place, the definitions turn into rules the software applies for you. Updoot connects time tracking, PTO, scheduling, and payroll prep for $5 per user per month.
Sources: U.S. Department of Labor, Fair Labor Standards Act; U.S. Department of Labor, FMLA; IRS Topic 751.
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Frequently Asked Questions About Time Tracking and Payroll Terms
What is time tracking in business?
Time tracking is recording when employees work and what they work on, so the business can pay people accurately, bill clients, and see where labor time goes.
What is the difference between gross pay and net pay?
Gross pay is total earnings before deductions. Net pay is what the employee takes home after taxes, benefit premiums, and other deductions are subtracted.
What is the difference between exempt and nonexempt employees?
Nonexempt employees are covered by federal minimum wage and overtime rules. Exempt employees are not, but only if they meet salary basis, salary level, and job duties tests. Job title alone does not make someone exempt.
How is overtime calculated under federal law?
Under the FLSA, nonexempt employees earn at least 1.5 times their regular rate for hours worked over 40 in a single workweek. Some states have additional overtime rules.
What is a workweek for payroll purposes?
A workweek is a fixed and regularly recurring period of 168 hours, or seven consecutive 24-hour periods. It can start on any day, but it must stay consistent.
What are the most important payroll terms to know?
Start with gross pay, net pay, overtime, workweek, pay period, exempt and nonexempt status, FICA, and PTO accruals. They cover most everyday payroll decisions.