Payroll Glossary

Fair Labor Standards Act

The FLSA is a federal wage-hour law enacted in 1938. The FLSA covers minimum wage, overtime, recordkeeping, employment of minors, and equal pay.

Fair Market Value

FMV is used to determine the value of noncash, employer-provided benefits for payroll tax purposes, or the value of facilities provided to employees in lieu of wages.

Family and Medical Leave Act

The FMLA requires employers with at least 50 employees to provide up to 12 weeks of unpaid leave to employees under certain health- or family-related circumstances.

Federal Insurance Contributions Act

FICA imposes employer and employee taxes to fund the federal government's old-age, survivors, and disability insurance (OASDI/Social Security) and health insurance (HI/Medicare) trust funds.

Federal Tax Deposit Coupon

Employers not required to use the EFTPS may make deposits using the traditional paper-coupon method using Form 8109, which is automatically sent to employers by the IRS.

Federal Unemployment Tax Act

FUTA requires employers to pay a certain percentage of their employees' wages (up to a maximum wage limit) as a payroll tax to help fund unemployment compensation benefits for separated employees.

Filing Status

This is the marital status of an employee and is reported for withholding purposes.

Financial Agent

A financial agent is an organization that verifies the accuracy of EFTPS enrollment information, enters it in its enrollment record database, and notifies employers of EFTPS procedures and receives EFTPS transactions.

Flat Rate Method

This is a method of withholding federal income tax on supplemental wages in which the supplemental payment and regular wages are treated separately. The employer withholds 28% of the supplemental wages.

Flexible Spending Account

An FSA is an arrangement established as part of a cafeteria plan under Section 125 of the Internal Revenue Code (IRC). The FSA allows employees to set aside pretax dollars to pay for qualifying expenses, such as deductibles on medical insurance or dependent care assistance.