Payroll & EOR Glossary
Plain-English definitions for the 83 terms global payroll and EOR buyers actually run into. Built for People Ops, Finance, and Talent leaders who need a precise answer, not a textbook. Search by term, filter by region or topic, or browse A to Z.
Plain-English definitions for the 83 terms global payroll and EOR buyers actually run into. Built for People Ops, Finance, and Talent leaders who need a precise answer, not a textbook. Search by term, filter by region or topic, or browse A to Z.
83 terms shown
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A 6
A1 Certificate in EU Global Mobility
EU portable document under Regulation 883/2004 Articles 12 and 13 that proves a posted or multi-state worker remains insured under their home-country social-security scheme, blocking double contributions in...
ABC Test in US Contractor Classification
Three-prong statutory contractor classification test used in California, Massachusetts, New Jersey, Illinois, Connecticut, and Indiana that places the burden of proof on the engager for all three prongs...
Agent of Record (AOR) in Contractor Management
Third-party administrator that hires or pays a buyer's independent contractors on the buyer's behalf, collecting W-9 documentation, routing payments, holding engagement records, and filing 1099-NEC at year-end.
Annual Leave Accrual in Global Payroll
The running accumulation of an employee's paid time off entitlement, calculated per pay period or month, recognised as a balance-sheet liability until the worker takes the leave or...
At-Will Employment in US Hiring and Separations
US default employment doctrine under which either party can terminate the employment relationship at any time and for any lawful reason, without notice or cause, subject to federal...
What Is Auto Enrolment? UK Workplace Pension Guide
UK statutory requirement for employers to enrol eligible workers (aged 22 to State Pension age, earning over £10,000 annually) into a qualifying workplace pension scheme, with minimum employer...
C 8
Common Law Test in US Worker Classification
US federal classification test under IRS rules that distinguishes employees from independent contractors based on behavioral control, financial control, and the relationship of the parties.
Contractor Management in Global Hiring
Umbrella category of software and services covering independent contractor engagement, classification, contracting, invoicing, payment processing, statutory tax filings, and audit-defence support.
Contractor of Record (CoR) in Global Hiring
Third-party intermediary that engages independent contractors on a buyer's behalf, handling contracting, invoicing, payment processing, statutory filings (1099 in the US, IR35 SDS in the UK), and absorbing...
Contractor vs Employee Classification in Global Payroll
The legal and tax test that decides whether a worker is an independent contractor with no employer obligations or an employee who triggers employer taxes, statutory benefits, and...
Cross-Border Payments in Global Payroll
Financial transactions that move funds between parties in different countries through correspondent banking, SWIFT, SEPA, or non-bank payment institution rails, subject to overlapping regulatory frameworks covering anti-money laundering...
What is a Certificate of Coverage? US Social Security
Official document issued by an employee's home-country social-security authority that proves they remain covered there during a foreign assignment, exempting the employer and employee from paying social-security contributions...
What Is CIS? UK Construction Industry Scheme
HMRC tax-deduction regime under which UK construction contractors deduct tax from payments to subcontractors at 20% for verified subcontractors or 30% for unverified ones, then remit the deductions...
What is Cross-Border Data Transfer? GDPR Chapter V
The movement of personal data, including payroll, HR, tax, and banking information, from one country to another.
E 10
Economic Reality Test in US Worker Classification
US federal Department of Labor classification test under the Fair Labor Standards Act that determines worker status by economic dependence rather than employer control.
Employer Contributions in Global Payroll
Mandatory payments the legal employer must make to government authorities on behalf of each worker, covering social security, healthcare, pension, unemployment insurance, and statutory benefit schemes.
Employer of Record vs PEO in Global Payroll
Two distinct workforce-management models.
Employment Cost Modelling in Global Headcount Planning
Budgeting framework that projects total cost of employment across gross salary, statutory employer contributions, supplemental benefits, EOR or payroll provider fees, and termination provisions.
End-of-Service Gratuity in GCC Payroll
Mandatory lump-sum termination payment owed to private-sector employees across the GCC, accruing from day one against basic salary and sitting on the employer balance sheet as a multi-year...
EOR Compliance Scope and Responsibility Split
Scope of host-country compliance work an employer of record performs as the legal employer in each target jurisdiction.
EOR Deposit in Global Hiring Contracts
Refundable security funding the buyer wires to the employer of record at contract start to cover potential outstanding liabilities including termination pay, accrued leave, end-of-service gratuity, and statutory...
EOR vs Staffing Agency: Legal Employer Differences
Two distinct routes for engaging workers without setting up a local legal entity.
EU Platform Work Directive in Practice
EU Directive 2024/2831 setting employment-status presumption rules and algorithmic-management transparency requirements for digital labour platforms operating in the European Union.
What is Employer Cost Ratio? 12%-50% Country Spread
Multiplier that converts gross salary into fully burdened employment cost.
F 3
Fixed-Term Contract in Global Payroll
A fixed-term contract is an employment agreement that ends on a defined date or completed task.
FX Spread in Cross-Border Payroll
Markup an EOR, global payroll provider, or bank applies above the interbank mid-market exchange rate when converting one currency into another for cross-border payroll.
What is Fully Burdened Employment Cost? The Real Math
Total amount an employer pays to keep one employee on staff, including gross salary, employer-side social security and payroll taxes, mandatory benefits, statutory leave loadings, voluntary benefits, and...
G 6
Global HR Across HRIS, Payroll, and EOR Layers
Function that runs people policy, talent operations, compensation, benefits coordination, employee relations, and compliance across multiple countries.
Global Mobility in Cross-Border Payroll
Legal, tax, and operational discipline governing when, where, and how employees can work across borders without creating permanent-establishment, payroll-tax, employment-law, or immigration exposure for their employer.
Global Payroll: Function, Product, and Architecture
Function of paying employees in more than one country through entities the employer owns, in compliance with each country's statutory rules, and producing a single reporting layer Finance...
Global Workforce Management Across Classification, Routing, and Country Compliance
Umbrella discipline covering worker classification, country-by-country employment compliance, multi-country payroll, statutory and supplemental benefits, and the routing of hires through direct employment, EOR or PEO arrangements, or contractor...
Gross-to-Net Payroll in Global Payroll
Gross-to-net payroll is the calculation chain that converts an employee's gross salary into take-home net pay after statutory deductions, voluntary deductions, benefit-in-kind adjustments, and country-specific payroll rules.
What is Gross-Up? Net-Pay Guarantee Mechanics
Payroll calculation that inflates a gross payment so the net delivered to the employee, after host-country tax and contributions, equals a guaranteed figure.
I 6
INAIL in Italian Payroll and Workplace Injury Insurance
Istituto Nazionale Assicurazione Infortuni sul Lavoro.
Indefinite Contract in Global Payroll
Employment contract with no specified end date that vests the full statutory employment protection of the country where the worker performs the work.
INPS in Italian Payroll Compliance
Italian national social security institute that collects mandatory employer and employee contributions through monthly UniEmens filings and F24 payments, administers pensions, sickness, maternity, unemployment, and family allowances, and...
International Benefits Administration Across ERISA, TPR, and IORP II
Operational layer that runs enrolment, contribution remittance, regulatory filings, and fiduciary oversight for employee benefit plans across multiple countries.
International PEO in Global Hiring
Marketing terminology for an employer-of-record service operating in non-US jurisdictions.
What Is IR35? Off-Payroll Working Rules Explained
UK off-payroll working rules requiring medium and large hirers to determine whether contractors working through Personal Service Companies are deemed employees for tax.
L 2
Legal Entity for Direct Payroll Employment
Formal corporate structure registered under a host country's company law, with separate legal personality distinct from its owners.
Local Entity in Global Hiring Decisions
Direct legal employer structure where the buyer establishes its own subsidiary, branch, or representative office in a host country.
M 3
Misclassification Audit in Global Payroll
Formal investigation by a tax or labour authority into whether workers engaged as independent contractors are factually employees, triggering retroactive employment-tax assessments, social-security contributions, civil penalties, and in...
Multi-Country Payroll in Global Hiring
Operational function of paying employees across multiple jurisdictions through the employer's owned entities, with a single reporting layer Finance can close the books against.
Multi-Currency Payroll in Global Operations
Payroll operation that processes employee salaries across two or more currencies and bank rails, funded from a single base currency.
N 3
Net-to-Gross Payroll and the Guaranteed-Net Cost
Iterative calculation that solves for the gross salary an employer must pay to deliver a contractually guaranteed net amount after income tax and social-security deductions.
Notice Period in Global Employment
Contractual or statutory window between the termination announcement and the employment end date, varying sharply by country, tenure, and termination cause.
What Is NIC? UK National Insurance Contributions Guide
UK statutory social-security contribution levied on employee wages and employer payroll, collected via PAYE alongside income tax.
O 2
Owned-Entity EOR Architecture in Global Hiring
Employer of record architecture where the provider holds its own legal subsidiary in each host country, acting as direct legal employer of the worker.
What is Off-Cycle Payroll? Where Provider Fees Hide
A payment run processed outside the regular scheduled payroll cycle to deliver wages, bonuses, corrections, terminations, or other one-off payments between scheduled runs.
P 13
Partner-Entity EOR Architecture in Global Hiring
Employer of record architecture where the provider routes through an in-country payroll partner who acts as the legal employer.
Payment in Lieu of Notice (PILON) in Global Payroll
UK and Irish payroll term for notice pay made when employment ends without the employee working their full notice period.
Payroll Funding in Global Payroll Operations
Cash-flow mechanic of moving employer funds to cover net pay, employer contributions, and statutory remittances each pay cycle.
Payroll Funding Window in Global Payroll
Number of days an employer of record or global payroll provider requires the client to wire payroll funds in advance of the employee pay date, locking working capital...
Payroll Outsourcing Service Tiers
Umbrella service category covering the spectrum from single-country payroll bureau ($5-$20 per worker per month) through managed payroll, multi-country payroll, and full Employer of Record ($199-$750).
Payroll Reconciliation in Global Payroll
Variance-tracking process that matches the payroll engine's gross-to-net calculation against bank disbursement records, HRIS employee data, and general-ledger postings.
PEO (Professional Employer Organisation) in US Payroll
US co-employment provider that formally shares the employer role with the client company, filing payroll taxes under its own FEIN, carrying workers' compensation on a master policy, administering...
Permanent Establishment in Global Payroll Tax
Taxable presence under OECD Model Tax Convention Article 5 created when a foreign enterprise has a fixed place of business at its disposal in another country, or when...
Posted Worker Directive in EU Global Mobility
EU framework (Directive 96/71/EC plus 2018/957/EU revision and 2014/67/EU enforcement) requiring posted employees to receive host-country minimum employment terms (pay, working time, leave, health and safety) from day...
What is a Probation Period? Country-by-Country Rules
Agreed initial phase of employment during which either party can terminate the contract more easily, with shorter notice and (in most countries) fewer statutory protections.
What Is P11D? UK Benefits in Kind Reporting
UK annual HMRC return employers use to report taxable benefits-in-kind and expenses given to directors and employees.
What Is PAYE? UK Pay As You Earn Guide
UK system for collecting income tax and National Insurance contributions from employee wages at source.
What is Payroll Cut-Off? New-Hire Timing Rules
The calendar deadline by which all variable inputs (hours, expenses, joiners, leavers, bonuses, contract changes) must be finalised so payroll can process the run on time.
R 2
Redundancy Pay in UK and Global Payroll
UK statutory lump sum payable to qualifying employees made redundant after two years of continuous service.
What Is RTI? UK Real Time Information (PAYE) Explained
HMRC system requiring UK employers to submit a Full Payment Submission (FPS) on or before each payday, reporting employee pay, income tax, and National Insurance deductions electronically through...
S 9
Scheinselbständigkeit in German Contractor Classification
German statutory finding under § 7 SGB IV that a person engaged as a contractor is in fact an employee, triggering retroactive social-security liability of up to 30...
Secondment in Cross-Border Employment
Temporary assignment of an employee from one entity (home) to another (host), retaining the original employment relationship while the employee performs work in a different country or business...
Severance Pay in Global Employment
Statutory or contractual payment owed to an employee on termination, calculated from tenure, last salary, and the reason for termination.
Shadow Payroll in Global Mobility
Compliance mechanism that calculates and remits host-country tax and social-security obligations for an internationally mobile worker without delivering additional net pay.
Single Touch Payroll (STP) in Australian Payroll
Single Touch Payroll (STP) is the Australian Taxation Office regime requiring employers to report payroll data (gross wages, PAYG withholding, superannuation accrued, allowances, deductions) to the ATO every...
Statutory Benefits in Global Payroll
Legally mandated employment benefits set by labour law, employment codes, or social-security legislation in each jurisdiction.
Statutory Holiday in Global Payroll
Paid leave entitlement set by national law that an employer must grant in addition to public holidays.
Supplemental Benefits in Global Payroll
Employment benefits that sit above the statutory floor and are designed by the employer through policy or contract.
What Is Salary Sacrifice? UK Tax Efficiency Guide
UK arrangement where an employee agrees to give up part of their cash salary in exchange for a non-cash benefit, typically pension contributions, electric vehicles, or registered childcare.
T 2
Total Cost of Employment in Global Payroll
Total cost of employment is the all-in annual cost an employer carries to keep one employee on payroll.
What is Tax Equalisation? Global Mobility Mechanism
Global-mobility policy mechanism by which an employer guarantees an assignee that their post-assignment tax burden will be no more and no less than the hypothetical tax they would...
U 3
UAE WPS in Global Payroll
Mandatory electronic payroll-routing system in the United Arab Emirates that delivers private-sector worker wages through Central Bank-licensed agents under MOHRE supervision, with a standardised Salary Information File submitted...
UK Payroll Glossary: Plain-English Definitions for SME Employers
You’re halfway through a payroll task and you’ve hit an abbreviation you don’t recognise.
URSSAF in French Payroll Compliance
French social-security collection agency that gathers employer and employee contributions, runs the DSN monthly return pipeline, audits non-resident employers, and enforces the travail dissimulé concealment-of-work regime under the...
W 3
W-2 vs 1099 in US Payroll Classification
US worker-classification split between W-2 employee status (employer-paid FICA, FUTA, statutory benefits, tax withholding) and 1099 independent contractor status (self-employed, responsible for SECA self-employment tax).
Work Permit Sponsorship for Global Hires
Formal employer-led process by which a licensed sponsoring entity petitions a national immigration authority for a work permit or work visa for a foreign national, accepting compliance, reporting...
Worker Misclassification in Global Payroll
Legal gap between how an engager describes a working relationship in the contract and how courts or tax authorities characterise it under applicable status tests.
Z 1
What is a Zero-Hours Contract? UK Employer Risk
Employment or worker agreement under which the employer is not obliged to offer any minimum hours and the worker is generally not obliged to accept hours offered.
# 1
What is the 183-Day Tax Residency Rule? Mobility Triggers
Common shorthand for the tax-residency tests that make an individual liable for income tax in a country once they spend more than 183 days there within a defined...
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