Workforce & Finance Glossary for Employers
It's easy to get lost in the business lingo of HR, payroll, finance, and IT. Let our Workforce & Finance Glossary light the way! Browse by category, alphabetically, or use the search bar.
We regularly update our glossary to keep up with the fast-changing world of work. Bookmark it for quick reference — whether you’re a workforce specialist or building your own business.
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1099 Employee
Another name for an independent contractor who uses IRS Form 1099 to report their income.
401(k) True-Up
An extra employer contribution to an employee’s retirement plan to fulfill annual matching requirements.
9-Box Model
A grid-based framework used to compare employees’ work performance and potential.
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Absenteeism
When an employee is habitually absent from work without prior approval.
Accounting Cycle
A structured process for recording and reporting transactions and financial information.
Accounts Payable (AP)
The process of managing a company’s supplier and vendor debts and payments.
Accrued Payroll
The total income and benefits employees have earned but not yet received.
Affordable Coverage (ACA)
A standard for measuring the affordability of employer healthcare coverage under the ACA.
Amortization
The process of spreading an intangible asset’s cost across its useful lifespan.
Applicable Large Employer (ALE)
A term used in the Affordable Care Act for employers with 50+ full-time or full-time equivalent employees.
Arrears
An amount of money that’s intentionally or accidentally paid after it’s owed.
Audit Trail
A precise, traceable record of an organization’s financial activity and transactions.
Automated Clearing House (ACH)
A nationwide electronic network for transferring funds between individuals and organizations.
Automated Invoice Processing Software
An accounts payable solution that improves efficiency by streamlining invoice workflows.
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Beneficial Ownership Information (BOI)
Required information that identifies everyone who owns or controls an organization.
Blanket Purchase Order (BPO)
A long-term procurement agreement that consolidates repeat purchases with one vendor.
Business Expenses
The costs a company incurs to grow, support daily operations, or generate revenue.
Business Intelligence
Data converted into actionable insights that support strategic planning and decision making.
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Cafeteria Plan
A type of benefits arrangement that allows workers to choose from several pre-tax benefits.
Career Lattice
An agile career development path allowing vertical, horizontal, and diagonal movement.
Career Path Ratio
An HR metric used to assess employee growth and movement within an organization.
Certified Payroll
A payroll report submitted by government-funded contractors to prove employees receive fair pay.
Co-Employment
A contractual agreement between two employers to share responsibilities for an employee.
Constructive Receipt
The concept that income is taxable, even if the taxpayer hasn't yet physically received it.
Contribution Margin Ratio
A metric showing how much sales revenue is available to cover fixed costs and contribute to profits.
Corporate Card
Company-issued credit cards that employees use for approved business expenses.
Corporate Card Reconciliation
A process that matches and aligns business credit card transactions with internal records.
Cost Per Hire
The average amount a company spends to attract and hire a new employee.
Cost-of-Living Adjustment (COLA)
A financial mechanism designed to help income keep pace with rising costs of goods and services.
Credit Reduction State
A state that’s lost access to the full federal unemployment tax credit due to unpaid federal loans.
Cross-Border Payments
Financial transactions between entities or parties located in different countries.
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Days Payable Outstanding (DPO)
The average number of days a business takes to pay suppliers for goods and services received.
Deferred Compensation
An arrangement in which an employee’s earnings are withheld and paid out at a future date.
Dependent Care Assistance Plan (DCAP)
A benefit allowing workers to set aside income for dependent care costs, such as daycare.
Diversity, Equity, and Inclusion (DEI)
A framework to enhance employee representation and support across a broad spectrum of demographics.
Document Management
The organization and control of documents to ensure secure storage and easy access.
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Earned Wage Access
A financial service that allows employees to access earned wages before their next scheduled payday.
Electronic Document Management System (EDMS)
Software that organizes, stores, and retrieves digital documents for efficient access.
Electronic Federal Tax Payment System (EFTPS)
A service for making and scheduling federal tax payments to the IRS online or by phone.
Employee Assistance Program (EAP)
A counseling service offered by employers to help employees with personal or work-related problems.
Employee Database
A digital system that securely stores, organizes, and manages workforce information.
Employee Lifecycle
An employee's entire time spent within an organization from initial hiring to final exit.
Employee Net Promoter Score (eNPS)
A measurement of employee satisfaction based on their likelihood to recommend their employer.
Employee Records
Comprehensive files that track and organize key information throughout the employee lifecycle.
Employee Resource Groups (ERGs)
Organized groups of employees with a common identity, interest, or background.
Employer Identification Number (EIN)
A unique nine-digit number assigned to businesses by the IRS for use in tax filings or other documents.
Employer Mandate (ACA)
An ACA provision requiring large employers to provide a minimum level of affordable health coverage.
Employer of Record (EOR)
A third party that takes legal responsibility for a company’s employment tasks.
Enterprise Resource Planning (ERP)
Software that unifies core business functions to streamline operations and centralize data.
Excess Wages
The amount of an employee’s annual income that exceeds the taxable wage base.
Exempt Employee
A worker not entitled to overtime and minimum wage protections under the Fair Labor Standards Act.
Exempt Wages
Portions of an employee’s income that aren’t taxable for a variety of reasons.
Exit Interview
Structured conversation with departing employees to gain feedback on their experience.
Expense Report
A document employees use to report business expenses for reimbursement and financial tracking.
Experience Rating System
A ranking system representing how likely an employer is to generate insurance claims.
Extended Illness Bank (EIB)
A benefit that provides additional paid leave due to an extended illness or severe injury.
eBilling
The digital sending and receiving of invoices and payments between vendors and customers.
eProcurement
A digital approach to automating and managing the procurement lifecycle.
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Federal Holiday
A type of holiday designated under federal law, during which most federal services shut down.
Federal Income Tax (FIT)
Required payments to the U.S. government based on taxable income earned in a single year.
Federal Income Tax Withholding (FITW)
An amount deducted from each paycheck to prepay federal income taxes.
Federal Insurance Contributions Act (FICA)
Federal payroll taxes used to fund Social Security and Medicare programs.
Federal Unemployment Tax Act (FUTA)
The U.S. law that created federal payroll taxes for funding unemployment programs.
Flexible Spending Account (FSA)
A pre-tax, “use-it-or-lose-it” savings account for covering qualified expenses.
Floating Holiday
A paid day off employees can take any day of the year, at their own discretion
Foreign Subsidiary
A legally separate company controlled by a parent organization in another country.
Franchisee
An individual or entity that operates and sells products under a parent company's name.
Franchisor
A business that grants others the rights to sell products or services in its name.
Fringe Benefits
Supplementary compensation that employees receive on top of their normal wages.
Full-Time Equivalent (FTE)
A labor metric representing the total hours of all part-time staff in relation to a full-time employee's hours.
Furlough
Temporary unpaid leave often required due to economic issues, lack of work, or other operational needs.
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General Ledger
A bookkeeping system that records all a business’s financial transactions.
Gig Economy
An economic model where consumers hire contractors or freelancers for short-term projects.
Global Employment Organization (GEO)
A service provider that hires and manages international workers on behalf of a client.
Gross Pay
The total sum of money an employee earns before taxes and withholdings are applied.
Gross-Up
A process for calculating how much gross amount is needed to guarantee a specified net amount.
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Health Reimbursement Arrangement (HRA)
A benefits plan that uses employer contributions to reimburse eligible healthcare expenses.
Health Savings Account (HSA)
A savings account that allows employees to use pre-tax income to cover qualified medical expenses.
Human Capital Management (HCM)
A comprehensive HR strategy focused on managing and developing employees as key assets.
Human Resource Information System (HRIS)
A digital platform that automates various HR functions, including payroll, benefits, and training.
Human Resource Management System (HRMS)
A suite of software applications that automate and manage talent management functions.
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Identity and Access Management (IAM)
A cybersecurity framework for verifying user identities and controlling access to sensitive data.
Imputed Income
The total value of non-cash compensation given to employees by an employer.
Indirect Procurement
Purchasing goods and services that support internal operations rather than production.
Individual Coverage Health Reimbursement Arrangement (ICHRA)
An employer-funded benefit for reimbursing health insurance costs and medical expenses.
Invoice Processing
The accounting workflow for receiving, verifying, and paying supplier invoices.
Invoice-to-Pay
A structured workflow that handles vendor invoices from receipt through final payment.
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Marginal Revenue
The added income a business makes from selling one extra unit of a product or service.
Maverick Spend
Non-compliant purchasing that violates an organization’s procurement policy or procedures.
Minimum Essential Coverage (MEC)
The ACA requirement for how many full-time employees must be offered a health plan’s benefits.
Minimum Value (ACA)
An ACA requirement that employer-sponsored plans cover at least 60% of the costs of their benefits.
Month-End Close
A monthly accounting process for finalizing an organization’s financial records for that period.
Multi-Factor Authentication (MFA)
A cybersecurity process designed to reduce the risk of unauthorized account or network access.
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Net Pay
The remaining amount of pay an employee receives after taxes and deductions.
Non-Exempt Employee
An employee entitled to overtime and minimum wage protections under the Fair Labor Standards Act.
Notes Payable
A written promissory note confirming a company’s debt to a lender and outlining specific loan terms.
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Off-Cycle Payroll
A process in which employees are paid outside the normal payroll schedule.
Old-Age, Survivors, and Disability Insurance (OASDI)
The formal or official name for what's commonly known as Social Security taxes.
Onboarding
The structured process of integrating new hires into an organization's systems, roles, and culture.
Open Enrollment
An annual period during which employees can update their health insurance and benefits enrollments.
OpenID Connect (OIDC) Authentication
A single sign-on protocol that verifies and shares a user’s identity with sites and applications.
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PTO Payout
A payment to an employee for their accrued, unused paid time off (PTO), typically upon leaving the company.
Paid Time Off (PTO)
Time away from work during which employees are still paid their normal wages.
Pay Compression
When employees receive the same pay despite having different levels of experience, skills, or qualifications.
Pay Equity
The idea that employees doing the same work should receive the same pay, regardless of demographics.
Pay Period
The timeframe employers use to calculate wages and issue timely, accurate paychecks.
Pay Stub
A summary of an employee’s gross pay, deductions, and take-home wages for a given pay period.
Payment Facilitator (PayFac)
A service provider that streamlines financial onboarding and digital transactions.
Payment Terms
Agreed-upon conditions for when and how a buyer must pay a seller for goods and services.
Payroll Ledger
A tool used to record and track an organization's employee and contractor payment data.
Payroll Register
A comprehensive record of each employee’s payroll and wage data for a given pay period.
Per Diem
A daily allowance paid to employees to cover the cost of travel-related expenses for work.
Positive Pay
A fraud detection tool that matches employer-issued paychecks against a list of authorized checks.
Premium Only Plan (POP)
A benefit plan that allows employees to pay their health insurance premiums with pre-tax income.
Presenteeism
When an employee comes to work no matter the cost, even when it’s unsuitable.
Prevailing Wage
A standardized rate for wages and benefits government contractors or foreign laborers must pay workers.
Privileged Access Management (PAM)
A cybersecurity practice that defends critical systems and sensitive data via restricted user access.
Pro Forma Invoice
A preliminary document estimating transaction costs and clarifying terms before delivery.
Procure-to-Pay (P2P)
A procurement process for requesting, purchasing, receiving, and paying for goods or services.
Procurement
The process of acquiring goods and services to support business operations and growth.
Professional Employer Organization (PEO)
A third-party organization that partners with businesses to streamline HR and payroll tasks.
Provisional Credit
A temporary deposit for maintaining access to funds while a disputed charge is investigated.
Provisional Credit
A worker classification with a combination of employee and contractor tax withholdings.
Provisional Credit
A metric measuring a company’s ability to make interest payments based on gross earnings.
Proximity Bias
When managers prioritize employees who work physically near them versus hybrid or remote workers.
Purchase Order
A buyer-issued document requesting goods or services based on defined terms and pricing.
Purchase Requisition
An internal request form used to start the procurement process of buying goods or services.
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Qualified Deferred Compensation Plan
An employer-sponsored retirement plan that meets all federal law requirements for deferred taxation.
Qualified Small Employer Health Reimbursement Arrangement (QSEHRA)
A benefits plan for small employers that uses contributions to reimburse eligible healthcare expenses.
Qualifying Life Event (QLE)
A life change that allows an employee to enroll in or modify benefits outside open enrollment.
Quiet Quitting
When employees limit their efforts to the tasks in their job descriptions instead of exceeding expectations.
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Reciprocal Agreement
An arrangement where workers who live and work in different states only pay taxes to the state they live in.
Reduction in Force (RIF)
The permanent termination of employees from a company, typically as a cost-saving measure.
Regretted Attrition
The loss of high-performing, highly valued employees due to avoidable factors.
Remote Job
A role that performs work outside a physical office, usually via digital collaboration tools.
Retro Pay
Compensation added to an employee's paycheck to make up for a shortfall in a previous period.
Reverse Factoring
A financial agreement in which buyers partner with a third party to pay supplier invoices faster.
Rightsizing
Changing an org’s size, structure, and composition to improve efficiency and profitability.
Role-Based Access Control (RBAC)
A cybersecurity framework that grants permissions based on job function instead of user identity.
Rule of 40
A benchmark for gauging a Software as a Service (SaaS) company’s financial health.
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SMART Goals
A framework for setting precise, actionable objectives to drive tangible results.
STAR Method
A structured method of answering interview questions about a candidate’s probable behavior.
SWIFT Payment
International money transfers coordinated via secure SWIFT messages between banks.
Safe Harbor (ACA)
Methods for demonstrating a health care plan’s affordability under the Affordable Care Act.
Salary Band
A framework establishing the maximum and minimum pay a group of similar roles can earn.
Secondment
Temporary reassignment of an employee to a different role or organization.
Shift Differential
The extra amount added to an employee’s wages for working outside normal business hours.
Single Sign-On (SSO)
A type of identity authentication allowing access to multiple sites with a single set of credentials.
Sinking Fund
A savings strategy that sets money aside over time to cover a known future expense or debt.
Skip-Level Meeting
One-on-one meetings between employees and senior leaders for fostering transparency and trust.
Sole Proprietorship
A business owned and run by one person who is personally responsible for all debts and obligations.
Source-to-Pay (S2P)
A holistic procurement approach managing everything from initial sourcing to invoice payment.
Special Enrollment Period (SEP)
A window outside Open Enrollment to enroll in, change, or renew medical insurance coverage.
State Disability Insurance (SDI)
A government-run program that gives short-term disability benefits to employees.
State Income Tax (SIT)
Required payments to a state government based on taxable income earned in a single year.
State Unemployment Insurance (SUI)
A state-based payroll tax that funds unemployment efforts for those without a job.
State Unemployment Tax Act (SUTA)
A state-based payroll tax that funds unemployment efforts for those without a job.
Statement of Operations
A financial document assessing a company’s financial performance over a specific period.
Stay Interview
A conversation exploring why an employee stayed with an employer instead of looking for a new job.
Summary Plan Description (SPD)
A plan document outlining participant and beneficiary rights, benefits, and responsibilities.
Supplemental Income
Additional income or compensation employees receive in addition to their normal wages.
Supplier Relationship Management (SRM)
A strategic approach to managing supplier partnerships for greater value and reduced risks.
System and Organization Controls (SOC)
An independent audit that verifies a service provider’s data security controls and integrity.
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Talent Philosophy
A set of principles an organization adopts to guide its approach to talent management and recruiting.
Taxpayer Identification Number (TIN)
A numerical identifier the IRS uses to track tax obligations and certain financial activities.
Time to Fill
The average time it takes to fill an open position from the date it was posted.
Time to Hire
The period between a successful candidate applying for a job and a formal acceptance.
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W-2 Employee
A worker who earns wages from an employer that withholds and reports taxes to the IRS via Form W-2.
Wage Base Limit
The maximum amount of taxable income on which an employee must pay taxes in a given year.
Wage Garnishment
When an employee’s gross pay is deducted and sent to a creditor to pay off that employee’s debt.
Work From Home (WFH)
A work setup that allows employees to perform their jobs from their homes.
Work Visa
A legal authorization allowing a person to live and work in a host country.
Working Capital Management
The process of balancing short-term assets and liabilities to maintain liquidity.
Workweek
A period of seven consecutive 24-hour periods that define the hours an employee is expected to work.