Payroll Glossary - D
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De Minimis: Anything that is too insignificant to merit legal scrutiny, such as a fringe benefit that is provided occasionally and is too small to justify accounting for or recording it. This does not apply to cash or cash equivalents except in very specific instances such as supper money.
Debit: An accounting entry that increases assets and expenses and decreases liabilities and revenues.
Debit Card: A plastic card with information on a magnetic strip by which a customer may withdraw funds on deposit in the customer's account using an automated teller machine or merchant’s “Point of Sale” system. To learn more about Payroll Debit Card
Deduction: An amount subtracted from an employee's gross pay to reach net pay, or an amount allowed to taxpayers as an offset against income.
Deemed Substantiation: Safe-harbor rules under which IRS requirements regarding the substantiation of amounts spent on employee business expenses are considered to have been met (e.g., per diem allowances).
Deferred Compensation: In general, the postponement of a wage payment to a future date. Usually describes a portion of wages set aside by an employer for an employee and put into a retirement plan on a pretax basis.
Defined Benefit Plan: A retirement plan that uses a formula (generally based on an employee's salary and length of service) to calculate an employee's retirement benefits and is not funded by employee contributions to the plan.
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.
Dependent Care Assistance Program: An employer plan providing dependent care services or reimbursement for such services.
Dependent Group-Term Life Insurance: Term life insurance that gives an employee death benefits should the employee's spouse or other dependents die.
Direct Deposit: The electronic transfer of an employee's net pay directly into financial institution accounts designated by the employee, thus avoiding the need for a paycheck.
Disaster Recovery: A plan for keeping the payroll function operational after a shutdown of the system is caused by a natural or man-made disaster.
Discrimination: In the context of employee benefits, favorable treatment of highly compensated employees under an employer's plan.
Dismissal Pay: Amounts paid to employees who are terminated from employment, also known as payments in lieu of notice, termination pay, or severance pay.
Disposable Earnings: That part of an employee's earnings remaining after deductions required by law (e.g., taxes). It is used to determine the amount of an employee's pay that is subject to a garnishment, attachment, or child support withholding order.
Double-Entry Accounting: The recording of equal debits and credits for every financial transaction.
