Guide to Global Payroll Management - 2020 - 11-172

Guide to Global Payroll Management
U.S. Payroll Term
Defined contribution plan - A retirement plan
with benefits determined by the amount in an
employee's account at the time of retirement.
The account may be funded by contributions
from both the employer and the employee.
There is a maximum annual contribution
determined by the IRS.

Human resource information system (HRIS) A system that integrates the functions of the
human resources system and the payroll system
in one set of programs and one database.
Minimum wage - The lowest amount that an
employer can pay its employees per hour under
federal or state law. The federal minimum wage
is $7.25 per hour. Many states have minimum
wage rates greater than $7.25 per hour. .
Overtime - Hours worked in excess of
maximums set by federal or state law that must
be compensated at a premium rate of pay (e.g.,
under the Federal Wage-Hour Law, all hours
worked over 40 in a workweek must be paid at
no less than 1½ times the employee's regular
rate of pay).
401(k) plan - A cash or deferred arrangement
that allows employees to authorize their
employer or place pre-tax dollars in a retirement
plan that invests the money. The contributions,
including those matched by the employer, and
any earnings on them, are not subject to federal
income tax until they are withdrawn.

Supplemental unemployment benefits (SUB) Employer plans that provide supplements to state
unemployment compensation benefits.

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Canadian Payroll Term
Defined contribution plan - A type of
Registered Pension Plan (RPP), in which
the benefit paid at retirement is determined
by the amount in an employee's account.
The account is normally funded by
contributions from the employer and the
employee. Contributions are subject to an
annual maximum as determined by the
government. The employer reports a
Pension Adjustment (PA) on the T4 slip.
Human resource information system
(HRIS) - A system that integrates the
functions of the individual human resources
and the payroll systems into a single
database using one set of programs.
Minimum wage - The minimum amount an
employer can pay an employee for work
performed, as regulated by the
Labour/Employment Standards Acts for
each jurisdiction.
Overtime - Time worked beyond the
normal work day or workweek, as regulated
by the provincial Labour/ Employment
Standards Acts or union contract.
Normally, the overtime rate is 1.5 times the
employee's regular rate of pay.
Registered Retirement Savings Plan
(RRSP) - An individual retirement savings
plan that allows a person to save money for
retirement. The contributions and interest
earned are tax-exempt until the funds are
withdrawn. Employers form group RRSP
plans, which is a collection of individual
RRSP accounts allowing the employees to
contribute pre-tax amounts directly into their
individual plan. Contributions are subject to
an annual maximum as determined by the
government.
Supplemental unemployment benefits
(SUB) - An employer plan that provides
employees with a payment in addition to the
EI benefits payment (commonly known as
"top-up"). Permissible SUB benefits
include maternity, parental and
compassionate care leave benefits.

© The Canadian Payroll Association/L'Association canadienne de la paie 2020
Guide to Global Payroll Management - 2020

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