Payroll Glossary

Paid Time Off

This is payment received for time not worked due to holiday, illness, vacation, jury duty, bereavement, or the failure of the employer to provide sufficient work.

Payroll Expense

A payroll expense is an expense that may be recorded in the payroll expense journal by function or by type of pay.

Payroll Period

A payroll period is a period of service for which an employer pays wages to its employees.

Per Diem

This is a flat daily rate of reimbursement for meals, incidentals, and lodging expenses incurred by employees while traveling away from home overnight on business.


This is a worker who is paid per unit, or piece, produced.

Positive-Account Employer

This is an employer whose unemployment tax contributions are greater than the benefits charged to its account.


Posting refers to recording a transaction in a journal entry, or recording a journal entry in the general ledger.

Premium Pay

This is the portion of pay, over and above the regular hourly rate, paid for overtime hours worked. See also overtime premium.

Primary Insurance Amount

The PIA is the base from which Social Security benefits are derived. It is essentially the average of an individual's taxable earnings over his or her working lifetime.

Private Letter Ruling

A PLR is a reply by the IRS to a request from a taxpayer about the tax implications of a particular set of facts. PLRs may not be relied on by other taxpayers or cited as precedent, but are indicative of IRS thinking on the issues involved.


Profit occurs when income exceeds costs and expenses.

Public Sector Employee

Public sector employers are state or local governments or their political subdivisions, such as public utilities and public school districts.