Understanding the core terminology used in payroll helps ensure accuracy and compliance. Below are the most common terms you’ll encounter when setting up or managing payroll in Atto.
Core Roles
Employer (Company)
An individual or organization that hires people to perform work in exchange for compensation. Employers are responsible for payroll taxes, benefit administration, and compliance with labor laws.
Employee
Someone hired to perform work under the company’s direction. Employees receive wages with taxes withheld and may receive benefits. In the U.S., they receive a W-2 form for tax reporting.
Contractor (Independent Contractor)
A self-employed worker who provides services to a company but operates independently. Contractors do not receive company benefits, and taxes are not withheld. In the U.S., they receive a 1099 form for tax purposes.
Payroll-Related Terms
Benefits
Deductions for things like retirement plans or insurance. These can be pre-tax or post-tax, depending on how the benefit is structured.
Post-Tax Deductions
Deductions made after taxes are applied. These may include union dues, charitable contributions, or some insurance premiums.
Garnishments
Court-ordered deductions from an employee’s paycheck. These include child support, tax levies, or creditor payments — all taken after taxes.
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