Glossary of Terms
ACCRUALS
Typically for vacation pay, the process of tracking an employee’s available time.
ACH
Automated Clearing House. Any Federal Reserve bank or private institution acting on behalf of a business that serves as a clearinghouse for electronic fund transfers. The ACH process is initiated by CPE, wherein payroll funds are drawn out of the client’s account, and transferred to CPE’s account. This process takes 48 hours.
BI WEEKLY
A pay period based on a set DAY of the week, occurring every two weeks. Example: pay day is every other Friday.
DIRECT DEPOSIT
The automatic transfer of payroll funds directly into an employee’s personal bank account.
GARNISHMENTS
An involuntary deduction of wages to a creditor or other agency assigned to collect a debt. Examples: child support, alimony, IRS collections, etc.. See Payroll Deductions.
GROSS WAGES
The total amount of regular wages, before tax and payroll deductions, provided to an employee from an employer.
INTERIM / MANUAL CHECKS
Paychecks needed in between a scheduled pay date. Example: an employee is terminated in the middle of a pay period
NET PAY
Also known as “take home pay”. The portion of the gross wages that remain after taxes and other deductions have been removed.
PAY DATE
The date or day of the month employees are paid
PAY PERIODS
The period of time on which an employee’s pay is based. Is either a weekly, bi-weekly, semi-monthly, or monthly pay period. There are usually several days between the end of the pay period, and the Pay Date. Example: pay period ends on Sunday, but pay date is following Friday.
PAYROLL DEDUCTIONS
Usually refers to benefits and insurance premiums, 401 (k) investments, or Cafeteria 125 deposits that are taken out of an employee’s paycheck. See Garnishments.
SEMI MONTHLY
A pay period based on a set date occurring twice a month. Example: pay date is the 5th and 20th of each month
TIME SHEETS
Either paper or electronic form on which the employee’s hours are recorded. This is sent to CPE via fax or internet, typically 4-5 business days before the pay date.