Your payroll cheat sheet

Payroll jargon can get a bit confusing thanks to the myriad of similar sounding terms. Below is a cheat sheet to help differentiate those terms.

Bookmark it.

Copy it.

Share it.

These are your payroll CliffsNotes (or Sparknotes, depending on which website you prefer).

Manual Check Vs. Live Check

  • Manual Check: A check is created and written by a client outside of regular payroll processing.
  • Live Check: Generally an employee’s paycheck, included in payroll packages sent to our clients (as opposed to direct deposit).

Deductions vs. Exemptions

  • Deductions: An amount subtracted from a paycheck (like taxes, garnishments, medical premiums).
  • Exemptions: A tax withholding allowance that is elected by an employee on Form W-4.

Pre-Tax vs. Non-Taxable

  • Pre-tax: Deductions from pay before taxes are calculated (like medical premiums).
  • Non-taxable: Additions to an employee’s pay (like expense account reimbursements).

Net Pay vs. Gross Pay

  • Net Pay: Amount paid after all deductions (including taxes) are subtracted.
  • Gross pay: Amount of pay prior to all deductions.

Semi-Monthly Pay Frequency vs. Semi Weekly Tax Depositor

  • Semi-Monthly Pay Frequency: How often employees are paid.
  • Semi-Weekly Tax Depositor: The term ‘semi-weekly’ can be misleading. An employer is required to make payroll tax deposits either monthly or ‘semi-weekly’ (after each and every payroll). The deposit date is based on the payroll check date.

Voided Check vs. Stop Payment

  • Voided Check: A check rendered null and void. A check may be physically altered to prevent cashing or depositing (like writing void on a check).
  • Stop Payment: A notification to the bank to prevent a specific check from being cashed. This usually requires a fee.

Semi-Monthly vs. Bi- Weekly Pay Cycles

  • Semi-Monthly Pay Cycle: Pay twice a month (like the 1st and the 15th). Usually involves 24 pay periods.
  • Bi- Weekly Pay Cycle: Pay every other week (like every other Friday). Usually involves 26 pay periods.

Date of Hire vs. Length of Service

  • Date of Hire: The employee’s first day working with the company.
  • Length of Service: Time worked by the employee with adjustment of significant leaves of absences.

Pay Period vs. Tax Period

  • Pay Period: The legally specified length of time used to calculate employee hours worked.
  • Tax Period: Period of time to determine an employer’s tax liability.


Have questions? Contact us! Fill out the form below and someone will get back to you shortly