Glossary term
Form 1099-NEC
Form 1099-NEC reports non-employee compensation — payments of $600 or more made during the year to independent contractors, freelancers, attorneys, and other non-employees for services performed for your business.
Glossary
Paystub, payroll & 1099 glossary.
Plain-English definitions of the terms that show up most often when reviewing a paystub, filing a 1099, or comparing W-2 and contractor classifications. Each entry has a short answer up top and a longer explanation below for when you need the context.
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Glossary term
Form 1099-MISC
Form 1099-MISC reports miscellaneous income payments — rents of $600+, royalties of $10+, fishing boat proceeds, medical and health care payments, attorney gross proceeds, crop insurance, prizes and awards, and other miscellaneous compensation that doesn't fit on 1099-NEC.
Glossary term
Box 7 on a 1099
Historically Box 7 of Form 1099-MISC was "Non-employee compensation." Starting with the 2020 tax year, that reporting moved to its own form (1099-NEC), and Box 7 on the current 1099-MISC now reports payer-made direct sales of $5,000+ for resale.
Glossary term
YTD on a paystub
YTD stands for "year-to-date" — the running total of earnings, deductions, taxes, and net pay accumulated from January 1 through the current paycheck's pay-period end. It lets you compare one pay period against the broader year-long pattern.
Glossary term
W-2 vs 1099
A W-2 is the year-end wage and tax statement an employer issues to an EMPLOYEE — wages paid, federal/state/FICA withheld. A 1099 (most commonly 1099-NEC) is the year-end form a business issues to a NON-EMPLOYEE — independent contractors, freelancers, attorneys for services performed.
Glossary term
FICA on a paystub
FICA stands for the Federal Insurance Contributions Act — the federal law that funds Social Security and Medicare. On a paystub, FICA usually refers to the Social Security portion (6.2%) and Medicare portion (1.45%) withheld from your paycheck.
Glossary term
Gross pay
Gross pay is the full amount you earned before any taxes, deductions, or withholdings are removed. It's the top-line earnings figure on a paystub — calculated from your hourly rate × hours worked (for hourly employees) or your salary divided across pay periods (for salaried employees), plus any overtime, commissions, bonuses, or other additions.
Glossary term
Net pay
Net pay is the actual amount you receive on payday — the final number after all taxes, deductions, and withholdings have been subtracted from your gross pay. It's the figure that lands in your bank account via direct deposit, or the amount written on your paper check.
Glossary term
Form W-4
Form W-4 is the IRS form you fill out when starting a new job (or when your tax situation changes) to tell your employer how much federal income tax to withhold from each paycheck. It accounts for filing status, dependents, multiple jobs, and any additional voluntary withholding.
Glossary term
Form W-9
Form W-9 is the IRS form a business asks an independent contractor (or any payee who'll receive a 1099) to fill out so it has the contractor's correct legal name, business structure, and TIN (taxpayer identification number) for year-end 1099 reporting.
Glossary term
Direct deposit
Direct deposit is the electronic transfer of pay directly into an employee's bank account on payday, eliminating paper checks. The employer initiates an ACH (Automated Clearing House) transaction; funds usually land in the employee's account on the scheduled pay date without any manual deposit step.
Glossary term
Payroll
Payroll is the end-to-end process of paying employees: calculating gross pay, withholding the right taxes and deductions, issuing payments (direct deposit or check), filing payroll-tax returns (federal 941, state equivalents), and recordkeeping. It's also the term for the actual list of paid workers and their compensation totals.