Payroll Services - Industry Lingo

To make the right business purchases, you have to know the language. Here's a guide to payroll lingo.

Automatic Check Signatures
This feature offered by payroll service providers prints a computer-generated signature on each check. It is particularly useful for larger businesses that have many checks to sign, or in cases where the check signer is frequently out of the office.

Certified Payroll Professional (C.P.P.)
This is a certification given by the American Payroll Association upon passing a standardized examination.

Direct Deposit
A popular option of payroll companies that allows payroll funds to be deposited directly into employee bank accounts.

EFTPS
The Electronic Federal Tax Payment System (EFTPS) was implemented in October 1996 in accordance with NAFTA (North American Free Trade Agreement) which stipulated that any business that pays more that $200,000 in taxes in any year from 1998 on must pay taxes electronically starting within two years from when they hit the $200,000-in-taxes mark.

FICA/FUTA
Taxes paid to the federal government that support Medicare, Social Security, and unemployment funds. While the costs of Medicare and Social Security are shared equally between the employee and the company, FUTA taxes are borne by the company alone.

Float
The interest income that is accrued between the time the payroll service transfers funds into its account and the time when payroll checks and taxes are actually paid. Firms with large payrolls should carefully consider the lost revenue due to float when choosing a provider.

Outsourcing
Enlisting a payroll service provider to process your payroll, as opposed to handling it internally.

Tax Filing
The most popular add-on service offered by payroll service providers. With this service, a provider agrees to file your company's payroll taxes.

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