A statutory employee is an independent contractor who is classified as an employee for tax purposes under IRS rules. Employers must withhold Social Security and Medicare taxes from their pay, but not income tax. This category typically includes certain salespeople, drivers, and insurance agents who work under specific conditions.
Statutory Sick Pay (SSP) is a benefit paid by employers to eligible employees who are unable to work due to illness. It provides a minimum level of income during short-term sickness, as set by government regulations. SSP helps employees manage financially while they recover, though some employers may offer additional sick pay benefits.
Single Sign-On (SSO) is an authentication system that allows users to log in once and access multiple applications without re-entering credentials. It enhances convenience by reducing password fatigue and improves security through centralized access management. Businesses often use SSO to streamline employee access to cloud tools and internal systems.
The SMART goals framework is a method used to create clear and achievable objectives. It ensures goals are Specific, Measurable, Achievable, Relevant, and Time-bound, making them easier to track and accomplish. Businesses and individuals use this framework to improve focus, accountability, and overall performance.
Settlement refers to the process of completing a financial transaction by transferring money or assets between parties. It ensures that buyers receive goods or securities and sellers receive payment as agreed. Settlements are common in banking, payroll, and securities trading, and timely execution is vital for financial accuracy and trust.
A Secure Payments System (SPS) is a framework that enables organizations to process financial transactions safely and efficiently. It uses encryption, authentication, and compliance protocols to protect sensitive data and prevent fraud. Businesses and governments rely on secure payment systems to ensure trust, accuracy, and confidentiality in money transfers.
Royalty payments are recurring fees made by one party (the licensee) to another (the rights holder) for the use of intellectual property. This can include patents, trademarks, copyrights, music, or brand names. They provide a way for creators and inventors to earn income while granting others legal rights to use their work.
A resident alien is a person who is not a U.S. citizen but qualifies as a resident for tax purposes under the green card test or the substantial presence test. They are generally taxed on worldwide income, similar to U.S. citizens. This status is important for determining tax obligations and eligibility for certain benefits.
Provisional credit is a temporary credit that a bank or financial institution provides to a customer’s account during a transaction dispute. It allows the customer to access funds while the bank investigates issues such as fraud or billing errors. If the dispute is resolved in the customer’s favor, the credit becomes permanent; otherwise, it may be reversed.
Provincial tax is an additional income tax levied by provinces and territories in Canada on top of the federal income tax. The rates and rules vary depending on the province, which means residents may pay different amounts based on where they live. These taxes fund local services such as healthcare, education, and infrastructure.
Pre-tax deductions are amounts withheld from an employee’s paycheck before income and payroll taxes are applied. Common examples include contributions to retirement plans, health insurance premiums, and commuter benefits. These deductions reduce taxable income, which can lower the employee’s overall tax liability while offering valuable benefits.
Permanent Establishment (PE) risk refers to the possibility that a business operating in a foreign country is considered to have a taxable presence there. This can happen if the company has a fixed office, employees, or agents regularly conducting business abroad. If triggered, it may lead to corporate tax liabilities, penalties, and compliance obligations in that jurisdiction.
Per diem is a fixed daily payment that employers provide to employees traveling for work to cover expenses such as food, lodging, and incidental costs. Instead of reimbursing actual receipts, companies use per diem rates to simplify accounting and control travel budgets. These rates may vary by location and are often guided by government or company policies.
A Professional Employer Organization (PEO) is a service provider that partners with businesses to handle HR functions like payroll, employee benefits, compliance, and tax filings. Through a co-employment model, the PEO shares employer responsibilities while the client company manages daily operations. This helps businesses save time, reduce risks, and focus on growth.
A payout refers to the release of funds by a company or organization to an individual or group. It can include salary payments to employees, dividends to shareholders, or benefits like insurance or retirement distributions. Payouts are essential for fulfilling financial obligations and maintaining trust with stakeholders.
Payment in advance is a financial arrangement in which the buyer pays the seller before goods are shipped or services are provided. This method reduces the seller’s risk of non-payment but increases the buyer’s risk if delivery is delayed or not fulfilled. It is often used in international trade or high-risk transactions.
Parental leave is the period of job-protected time off work given to parents after the birth or adoption of a child. It allows them to care for their newborn or newly adopted child without risking job loss. The length and pay during parental leave vary by country, employer policies, and local labor laws.
A parallel run is a process used when introducing a new system, such as payroll or software, by running it alongside the existing one. This allows businesses to compare outputs, identify errors, and ensure the new system works correctly before fully switching over. It minimizes risks during system migration or process changes.
An operating budget is a financial plan that estimates a company’s projected revenues and expenses for a specific time, usually a year. It covers day-to-day costs such as salaries, rent, utilities, and supplies. Businesses use operating budgets to monitor performance, control spending, and plan for profitability.
An open account is a payment arrangement in international or domestic trade where a seller ships goods before receiving payment. The buyer pays at an agreed future date, often 30–90 days later. While this method benefits buyers with flexible terms, it poses higher financial risk for sellers without upfront payment guarantees.