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Payroll taxes are taxes imposed on employers or employees, and are usually calculated as a percentage of the salaries that employers pay their employees. By law, some payroll taxes are the responsibility of the employee and others fall on the employer, but almost all economists agree that the true economic incidence of a payroll tax is unaffected by this distinction, and falls largely or entirely on workers in the form of lower wages. Because payroll taxes fall exclusively on wages and not on returns to financial or physical investments, payroll taxes may contribute to underinvestment in human capital, such as higher education.
A payroll is a list of employees of a company who are entitled to receive compensation as well as other work benefits, as well as the amounts that each should obtain. Along with the amounts that each employee should receive for time worked or tasks performed, payroll can also refer to a company's records of payments that were previously made to employees, including salaries and wages, bonuses, and withheld taxes, or the company's department that deals with compensation. A company may handle all aspects of the payroll process in-house or can outsource aspects to a payroll processing company.
The Federal Insurance Contributions Act is a United States federal payroll tax payable by both employees and employers to fund Social Security and Medicare—federal programs that provide benefits for retirees, people with disabilities, and children of deceased workers.
A salary is a form of periodic payment from an employer to an employee, which may be specified in an employment contract. It is contrasted with piece wages, where each job, hour or other unit is paid separately, rather than on a periodic basis. Salary can also be considered as the cost of hiring and keeping human resources for corporate operations, and is hence referred to as personnel expense or salary expense. In accounting, salaries are recorded in payroll accounts.
Three key types of withholding tax are imposed at various levels in the United States:
A paycheck, also spelled paycheque, pay check or pay cheque, is traditionally a paper document issued by an employer to pay an employee for services rendered. In recent times, the physical paycheck has been increasingly replaced by electronic direct deposits to the employee's designated bank account or loaded onto a payroll card. Employees may still receive a pay slip to detail the calculations of the final payment amount.
The term sheltered workshop refers to an organization or environment that employs people with disabilities separately from others, usually with exemptions from labor standards, including but not limited to the absence of minimum wage requirements.
An hourly worker or hourly employee is an employee paid an hourly wage for their services, as opposed to a fixed salary. Hourly workers may often be found in service and manufacturing occupations, but are common across a variety of fields. Hourly employment is often associated but not synonymous with at-will employment.
The Paycheck Fairness Act is a proposed United States labor law that would add procedural protections to the Equal Pay Act of 1963 and the Fair Labor Standards Act as part of an effort to address the gender pay gap in the United States. A Census Bureau report published in 2008 stated that women's median annual earnings were 77.5% of men's earnings. Recently this has narrowed, as by 2018, this was estimated to have decreased to women earning 80-85% of men's earnings. One study suggests that when the data is controlled for certain variables, the residual gap is around 5-7%; the same study concludes that the residual is because "hours of work in many occupations are worth more when given at particular moments and when the hours are more continuous. That is, in many occupations, earnings have a nonlinear relationship with respect to hours."
Listia is a free online marketplace and mobile app for trading goods between individuals using a PTS system and/or money. The platform has a system known as PTS to facilitate the trades. Users earn PTS for giving away items they no longer need and can then use those PTS to get items that other users have listed. The marketplace uses an auction system where users bid on each other's items until the auction ends and the highest bidder wins. The user who listed the item then arranges for a pickup or ships the item directly to the winner.
UKG is an American multinational technology company with dual headquarters in Lowell, Massachusetts, and Weston, Florida. It provides workforce management and human resource management services.
Owler is an American Internet company headquartered in San Mateo, California. It crowdsources competitive insights by providing news alerts, company profiles, and polls and allows members to follow, track, and research companies in real time. The company was founded in 2011 and has over 3.5 million active users.
Gusto, Inc. is a company that provides payroll, benefits, and human resource management software for businesses based in the United States. Gusto handles payments to employees and contractors and also handles paperwork necessary to help client companies comply with tax, labor, and immigration laws.
Chime Financial, Inc. is a San Francisco–based financial technology company that partners with regional banks to provide certain fee-free mobile banking services. The company offers early access to paychecks, negative account balances without overdraft fees, high-yield savings accounts, peer-to-peer payments, and an interest-free secured credit card. Chime's mobile banking services do not rely on monthly service or overdraft fees or minimum balance requirements. Chime earns the majority of its revenue from the collection of interchange fees on debit card transactions.
The Paycheck Protection Program (PPP) is a $953-billion business loan program established by the United States federal government during the Trump administration in 2020 through the Coronavirus Aid, Relief, and Economic Security Act to help certain businesses, self-employed workers, sole proprietors, certain nonprofit organizations, and tribal businesses continue paying their workers.
Proposition 22 was a ballot initiative in California that became law after the November 2020 state election, passing with 59% of the vote and granting app-based transportation and delivery companies an exception to Assembly Bill 5 by classifying their drivers as "independent contractors", rather than "employees". The law exempts employers from providing the full suite of mandated employee benefits while instead giving drivers new protections:
Earned wage access (EWA), can be referred to as instant pay, earned income, early wage access, accrued wage access or on-demand pay. The official UK government term is Employer Salary Advance Scheme.
EarnIn is a financial services company that provides earned wage access services. Founded as Activehours in 2013, the app launched in May 2014. The company's business model, which is based on users paying voluntary "tips" to withdraw earned wages ahead of time, has been compared to payday lending services. It expanded its services in 2019 to include negotiating with doctors and hospitals to lower its users' medical bills. In 2020, EarnIn acquired and implemented a new savings feature, Tip Yourself.
PayActiv is a financial services company headquartered in Milpitas, California. PayActiv partners with companies to provide employees with financial services such as earned wage access.
Even is an American financial services company founded in 2015. The company is headquartered in Oakland, California and is known for providing payroll and accounting services including earned wage access.
References
- ↑ "Championing Diversity in FinTech: NYC Based DailyPay". 21 June 2020.
- ↑ Kauflin, Jeff. "VCs Bet $40 Million On Money App For Those Living Paycheck To Paycheck". Forbes. Retrieved 2021-05-10.
- ↑ "FinTech profile: DailyPay, the payroll game-changer | Venture Capital". www.fintechmagazine.com. Retrieved 2021-05-10.
- ↑ Harrison, Polly Jean (2021-01-12). "DailyPay: What The Recent CFPB Compliance Regulations Means for Earned Wage Access". The Fintech Times. Retrieved 2021-05-10.
- ↑ Sheng, Ellen (2020-03-30). "Companies offer cash-strapped employees daily pay cards and other flex-pay options as a lifeline". CNBC. Retrieved 2021-05-10.
- ↑ "Do paycheck advance apps improve financial health?". American Banker. 2019-03-11. Retrieved 2021-05-10.
- ↑ Bernard, Tara Siegel (2020-10-02). "Apps Will Get You Paid Early, for a Price". The New York Times. ISSN 0362-4331 . Retrieved 2021-05-10.
- ↑ "Funding Snapshot: DailyPay Raises $5M Series A to Provide Daily Payments to Workers". Wall Street Journal. 2016-09-07. ISSN 0099-9660 . Retrieved 2021-05-10.
- ↑ Noto, Anthony (September 9, 2016). "This week in N.Y.C. funding news: Cheddar, Away, DailyPay". www.bizjournals.com. Archived from the original on 2020-12-05. Retrieved 2021-05-10.
- ↑ "DailyPay Just Raised $9M To Provide Flexibility For When You Want to Get Paid". AlleyWatch. 2018-02-21. Archived from the original on 2021-05-10. Retrieved 2021-05-10.
- ↑ "Payroll Quietly Easing Into Trend of Quick-Pay Programs". news.bloombergtax.com. Retrieved 2021-05-10.
- ↑ Johnston, Katie (February 10, 2020). "Apps let workers access wages instantly, but at what cost?". BostonGlobe.com. Retrieved 2021-05-10.
- ↑ Mann, Sonya (2017-09-14). "This Startup Is an ATM for the Money You Haven't Been Paid Yet". Inc.com. Retrieved 2021-05-10.
- ↑ "World Changing Ideas Awards 2021: On The Rise (0–4 Years In Business) Finalists and Honorable Mentions". Fast Company. 2021-05-04. Retrieved 2021-05-10.