Payroll Glossary

Wage and Tax Statement

Form W-2 is used to report wages and payments made to employees and payroll taxes withheld from employees' pay during the calendar year. Although the IRS issues the form, submission is to the SSA.

Wage Assignment

This is a voluntary transfer of wages to secure a loan from a creditor or to pay off a debt.

Wage Attachment

This is an involuntary transfer of wages to satisfy a debt.

Wage Base

The wage base is the wage limit beyond which an employee's wages are not taxed.

Wage Order

A wage order is a written directive ordinarily issued by a labor commission or board establishing the wages and hours of employees in a particular occupation.

Wage-Bracket Withholding Method

This is a procedure for determining the amount of income tax to be withheld from wages directly from tables supplied by the IRS or state departments of revenue.

White Collar Employees

In the context of the Federal Wage-Hour Law, these are executive, administrative, professional, or outside sales employees who are exempt from the law's minimum wage, overtime pay, and certain recordkeeping requirements.

Withholding Allowance

A withholding allowance reduces the amount of wages subject to federal income tax withholding based on exemptions and deductions claimed on federal income tax Form 1040.

Withholding Certificate for Pension or Annuity Payments

Income from annuity, pension, profit-sharing, stock bonus, and some other deferred compensation plans is taxed under regulation by a method and at a rate determined by the nature of the payment (periodic or nonperiodic, eligible for rollover or not). Form W-4P, Withholding Certificate for Pension or Annuity Payments, is used by recipients to have additional income tax withheld above that required by regulation or to claim exemption from withholding.

Work-Sharing Plan

A work-sharing plan reduces an employee's hours on the job so that work can be shared with other employees. Employees working reduced hours receive partial unemployment benefits.