Payroll includes all forms of compensation, such as salaries, wages, commissions, dismissal pay, bonuses, vacation allowances, sick- leave pay, and employee contributions to qualified pension plans paid during the year to all employees. For corporations, payroll includes amounts paid to officers and executives; for unincorporated businesses, it does not include profit or other compensation of proprietors or partners. Payroll is reported before deductions for social security, income tax, insurance, union dues, etc. This definition of payroll is the same as that used by the Internal Revenue Service (IRS) on Form 941 as taxable Medicare Wages and Tips (even if not subject to income or FICA tax).
Includes tip and gratuities received by employees from patrons and reported to employers. Excludes payrolls of departments or concessions operated by other companies at the establishments.
Also included are tips and gratuities received by employees from patrons and reported to employees and the spread of stock options that is taxable to employees as income. If an employee works at more than on location, the payroll is included in the one locations where they spend most of their time. Also included are salaries of members of professional service organizations or associations which operate under state professional corporation statutes and file a corporate federal income tax return. Excluded are payrolls of departments or concessions operated by other companies at the establishment; payments to or withdrawals by proprietors or partners of an unincorporated company; and annuities or supplemental unemployment compensation benefits, even if income tax was withheld.
Payroll does not include commissions paid to independent (nonemployee) agents, such as insurance or real estate agents.
Also excluded are payments to members of Armed Forces and pensioners carried on the active payrolls of manufacturing establishments.
Payroll of leased employees, that is, those whose payroll is filed with the IRS by an employee leasing company, is counted together with the payroll of the industry where work is performed and also in the payroll for NAICS 561330, Employee Leasing Services.
Also included are payments received on a ton, car, or yard basis; excluded are payments to members of Armed Forces and pensioners carried on the active payroll of mining establishments. Also excluded are royalty payments to unions and costs of smithing, explosives, fuses, electric cap lamps, and mine supplies used in production, development, and exploration work but charged to employees and deducted from their wages.
Payroll of leased employees is counted together with the payroll of the industry where work is performed and also in the payroll for NAICS 561330, Employee Leasing Services.