Glossary of Payroll Terms

Garnishment

An involuntary transfer of wages to a creditor or other agency assigned to collect a debt.

Gross Income

The compensation for services, including fees, commissions, fringe benefits, and similar items.

Gross Pay

The total amount received from the employer before any deductions are made.

Gross-Up

An IRS-allowed algebraic formula for determining the total taxable gross pay when the employer pays the employee's share of tax. Gross-up is also used when the net pay amount is known but the gross pay amount is not.

Gross Wages

The total amount of regular wages and the fair market value of benefits provided to an employee by the employer.

Gross-to-Net (GTN)

The gross-to-net process calculates net pay by subtracting reductions and deductions from each employees' gross pay. Gross-to-net elements indicate which reductions and deductions should be taken.

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