Payroll Glossary - R

RDFI: Receiving Depository Financial Institution.

Reasonable Basis Test: A standard used to determine whether a worker can be treated as a independent contractor whether or not the common law test is met, based on prior court and administrative rulings, IRS audits, or longstanding practice in the industry.

Receiving Depository Financial Institution (RDFI): A financial institution that qualifies to receive direct deposit entries from an Automated Clearing House.

Reciprocity: In payroll, a relationship between states under which privileges granted by one are returned by the other (e.g., reciprocal enforcement of child support orders, reciprocal agreements not to tax non- residents working in a state).

Reconciliation: The process of ensuring that amounts withheld, deposited, paid, and reported by employers agree with each other and that if they do not, determining the reasons and making the necessary corrections.

Regular Rate of Pay: An hourly pay rate determined by dividing the total regular pay actually earned for the workweek by the total number of hours worked.

Regulations: The means by which government agencies administer and enforce laws (e.g., rules issued by the IRS to enforce the tax laws).

Rehabilitation Act of 1973: A federal law prohibiting discrimination against qualified disabled individuals by federal government contractors and grantees.

Reimbursement Financing: An unemployment insurance financing system that allows employers to pay back to the state unemployment trust fund any benefits paid to their former employees, rather than paying a tax based on their experience rating. This form of financing is most often used by nonprofit groups and public sector employers.

Reimbursement Fund: See .Flexible Spending Arrangement..

Related Corporations: A group of corporations meeting certain common ownership and concurrent employment requirements that may be treated as one employer for social security, Medicare, and FUTA purposes.

Relational Data Base (RDB): A file management system that organizes data into a series of tables, each containing a series of related data in columns and rows.

Reserve Ratio: In the context of unemployment compensation it is a type of experience rating system that bases an employer's unemployment tax rate on the ratio of taxes less benefits to taxable payroll.

Resident Alien: In the context of payroll, an individual who passes either the green card or 'substantial presence test for determining resident status in the United States Resident aliens are generally subject to federal income tax withholding and social security and Medicare taxes on the same basis as United States citizens.

Revenue Procedures (Rev. Proc.): Official statements from the IRS on how to carry out tax compliance.

Revenue Rulings (Rev. Rul.): Published decisions issued by the IRS that apply the tax laws to a particular set of facts. They can be used by taxpayers to determine their tax liability in similar factual situations.

Roth IRA: An individual retirement arrangement to which nondeductible contributions may be made (subject to certain AGI phase-outs), and the distributions of which are generally nontaxable.

RRTA: Railroad Retirement Tax Act.