48 Fun Facts About Payroll

Which pay schedule do US employers use most often?

Biweekly: 43% of US private businesses paid that way in a February 2023 federal survey, ahead of weekly at 27%. Paydays 14 days apart mean two months each year bring a third paycheck.

Which pay schedule gives a worker exactly 24 paychecks a year?

Semi-monthly: two fixed paydays a month, such as the 1st and the 15th, make 24. A salary split 24 ways rather than 26 gives slightly bigger checks than a biweekly plan pays.

What is the term for an employee's total earnings before any taxes or deductions are taken out?

Gross pay: for hourly workers it counts overtime as well as regular hours. Mortgage lenders weigh your monthly debts against this figure, not against what actually reaches your bank account.

FICA takes Social Security and Medicare taxes out of US paychecks; what does its 'I' stand for?

Insurance: it is the Federal Insurance Contributions Act. The president behind the tax said paying in gave workers 'a legal, moral, and political right' to collect their pensions.

What rate of Social Security tax comes out of a US employee's wages?

6.2%: the employer pays a matching 6.2%, but most economists say workers bear nearly all of both halves, because the employer's share comes out of wages that would otherwise be paid.

The employee's Medicare portion of FICA is 1.45% of wages, applied up to what limit?

Every dollar, no cap: Congress removed Medicare's wage ceiling after 1993, and employers now withhold an extra 0.9% on pay above $200,000, so Medicare's rate rises on high pay while Social Security's falls to zero.

By what date each year must US employers get Form W-2 to their employees?

January 31: since 2017 the government's copies are due the same day, moved up from as late as March so the IRS can match wages against returns before it pays out refunds.

Which IRS form does a new employee fill out to tell the employer how much tax to withhold?

W-4: the form was redesigned for 2020 to drop 'allowances', which were tied to personal exemptions that the 2017 tax law suspended. Its title is now simply Employee's Withholding Certificate.

For seven decades, paying a contractor $600 in a year meant a US business filed which form?

Form 1099: the $600 trigger was set in 1954 and never adjusted, though prices have risen more than tenfold since. A 2025 law finally raised it to $2,000 for payments from 2026.

US law sets what minimum pay for hours beyond 40 a week?

Time and a half: the 1938 law began with a 44-hour week and cut it to 40 by 1940. Making long hours costly was meant to push employers to hire more workers instead.

Which 1938 law set the first federal minimum wage, 25 cents an hour?

Fair Labor Standards Act: it left out farm and service workers, and Southern Democrats, keen to keep their region's lower wages, fought it hardest.

What has the US federal minimum wage been since 2009?

$7.25: no raise has followed the one that took effect in July 2009. By mid-2026, 30 states had set higher floors of their own, several of them at $15 or more.

Whose US federal cash wage floor is just $2.13 an hour?

Tipped workers: the $2.13 cash wage was half the minimum wage when it was set in 1991, and a 1996 law froze it there. If tips fall short, the employer must make up the difference.

Modern income tax withholding from US paychecks was introduced to fund what?

World War II: a 1943 law made employers take the tax out of each paycheck as wages were earned. Milton Friedman helped design the system at the Treasury and later wished it could be abolished.

Which president signed the Social Security Act into law?

Franklin D. Roosevelt: Frances Perkins had made his backing for old-age pensions a condition of becoming his Labor Secretary in 1933, and she went on to direct the drafting of the law.

With few branches in 1936, Social Security took its first number applications through which network?

Post offices: some 45,000 of them took the forms and 1,074 typed the cards. John Sweeney, announced as holder of the first record, died at 61 without ever collecting a benefit.

Ida May Fuller paid $24.75 in Social Security tax, retired and lived to 100; roughly how much did she collect?

$23,000: her first monthly check, $22.54 in January 1940, nearly repaid everything she had paid in. She drew benefits for 35 years, $22,888.92 in all.

Which amendment to the US Constitution, ratified in 1913, lets Congress tax incomes?

The Sixteenth: conservatives in Congress proposed it in 1909 hoping to kill the income tax for good, sure that three-fourths of the states would never ratify. State after state did.

The office that became the IRS was created in 1862 to collect an income tax funding what?

The Civil War: Lincoln signed the 1862 law that created both the tax and its collector. The income tax was gone by 1872, but the office outlived it and was on hand when the tax returned for good in 1913.

Which retirement plan was born from a provision of the Revenue Act of 1978?

401(k): the provision ran little more than a page. Benefits consultant Ted Benna, among the first to build a plan on it, added an employer match and never meant it to replace pensions.

Which payroll giant did accountant Henry Taub start in 1949 as a small bureau in Paterson, New Jersey?

ADP: despite the name Automatic Payrolls, its early payrolls were done manually; the Automatic Data Processing name came later. Early salesman Frank Lautenberg went on to become a US senator.

Which low-payroll baseball team's 2002 season is the subject of 'Moneyball'?

Oakland Athletics: on about $40 million, under a third of the New York Yankees' payroll, they won 103 games that year and at one point took 20 in a row.

Paychex was founded in 1971 by Tom Golisano with how much starting capital?

$3,000: plus his credit cards. His employer, a payroll processor for big companies, was not interested in his idea of serving small firms, so he left and did it himself.

Which country has taken income tax straight from wages under 'Pay As You Earn' since 1944?

United Kingdom: Pay As You Earn replaced tax bills collected once or twice a year. The chancellor who pioneered it, Kingsley Wood, died suddenly on the very day he was due to announce it to Parliament.

The word 'salary' derives from the Latin salarium, which is itself derived from the word for what?

Salt: the Latin sal sits inside salarium, but how it came to mean pay is unknown. The popular story that Roman soldiers were paid in it has no ancient evidence behind it.

Willard Bundy's 1888 time clock became an early product line of which future computing giant?

IBM: the Bundy brothers' company was folded into one of the firms that became International Business Machines. IBM kept selling time clocks until 1958, when it sold that division to Simplex.

In payroll fraud, what name is given to a made-up or departed worker whose wages someone else quietly collects?

Ghost employee: armies get them too. In 2014 an investigation found 50,000 'ghost soldiers' on the Iraqi military's payroll, their salaries thought to be pocketed by officers.

Which debt can take half a US paycheck, double the usual garnishment cap?

Child support: orders can claim 50% of a worker's pay, or 60% from someone with no other family to support. The same 1968 law bars an employer from firing a worker over a single garnishment.

What does the 'roll' in the word 'payroll' refer to?

A list of names: records were once kept on rolled-up parchment, so 'roll' came to mean a register, as in 'roll call'. A payroll is, literally, the list of people to be paid.

The 2020 Paycheck Protection Program was created by which piece of legislation?

The CARES Act: its loans were forgiven if the money kept staff on the payroll, and nearly all were. A 2022 study estimated that only a quarter to a third of it reached workers who would otherwise have lost their jobs.

Which president signed the 1963 Equal Pay Act, barring lower pay for women?

John F. Kennedy: he called it a significant step, yet for its first nine years the law exempted executive and professional jobs, leaving white-collar women uncovered until 1972.

Which two anarchists were executed in 1927 for murders committed during a shoe-factory payroll robbery in Massachusetts?

Sacco and Vanzetti: a paymaster and his guard were shot carrying the factory's wages. The trial drew protests worldwide, and in 1977 Massachusetts's governor proclaimed that the two men had been unfairly tried.

Which island long raised more of its government revenue from payroll tax than from any other source?

Bermuda: with no personal income tax, the island long leaned on a levy on wages. A corporate income tax on big multinationals, begun in 2025, was forecast by 2026 to bring in about as much.

Which 1955 hit is sung by a miner forever in debt to a company store?

Sixteen Tons: its miner owes so much at his employer's shop that more work only deepens the debt. Tennessee Ernie Ford's recording went out as a B-side, yet sold a million copies in 24 days.

What were the private tokens that coal and lumber companies paid workers, spendable only in company-run stores, called?

Scrip: it came as paper coupons or metal tokens, and turning it into real money generally meant selling it at a discount, so part of a worker's wages ended up in a middleman's pocket.

Being paid a fixed rate for each unit produced, regardless of time taken, is called what?

Piece work: the pay still has to add up. Under US law, however the work is counted, each worker must end up with at least the equivalent of the minimum hourly wage.

Which mill owner coined the 1817 slogan 'Eight hours' labour, eight hours' recreation, eight hours' rest'?

Robert Owen: he had already cut the working day at his own cotton mills at New Lanark in Scotland. In 1856 stonemasons in Melbourne downed tools under the same slogan and won an eight-hour day.

In which 1983 film does Richard Pryor play a programmer who skims the leftover half-cents from every paycheck on his company's payroll?

Superman III: the fractions of a cent shaved from his colleagues' pay add up to a cheque for more than $85,000. The 1999 comedy 'Office Space' borrowed the scheme and named this film as its inspiration.

Which carmaker closed its factories on Saturdays in 1926, giving workers an early five-day, 40-hour week?

Ford: from 1926 its factories shut all day Saturday as well as Sunday. Henry Ford reasoned that workers with more free time would spend more, not least on cars and car trips.

What is the document listing wages, taxes and deductions with a payment most commonly called in the US?

Pay stub: no federal law requires US employers to hand one over. Federal rules only make them keep pay records, and whether workers must get a copy is left to each state.

Which outlaw stole a coal company's payroll at Castle Gate, Utah, in 1897?

Butch Cassidy: he and Elzy Lay held up the men carrying it in broad daylight and rode off with the money. Years later, under an alias in Bolivia, he took an honest job at a tin mine, where his duties included guarding the payroll.

Which type of deduction is a wage garnishment?

Post-tax: the law measures a garnishment against 'disposable earnings', the pay left once taxes and other legally required amounts are withheld, so it never reduces the income a worker is taxed on.

Which US workers pay double the usual Social Security tax?

The self-employed: with no employer to split it with, they pay both halves, 15.3% once Medicare is added, under a 1954 law known as SECA. In return they may deduct the employer-equivalent half when working out their income tax.

Which religious group won the right in 1965 to opt out of Social Security?

The Amish: caring for their own elderly is a religious duty, so they refused to pay in. After the IRS seized three of farmer Valentine Byler's plough horses in 1961, the public outcry pushed Congress to act.

What did the Supreme Court unanimously rule in 2014 about severance pay?

It is taxable wages under FICA: a bankrupt retailer, Quality Stores, had sought a refund for itself and about 1,850 laid-off workers. Three lower courts sided with it before the justices reversed them 8-0.

Which country's federal government handed its payroll tax over to the states in 1971?

Australia: the tax began in 1941 as a flat 2.5% federal levy to fund child endowment. Once it was theirs, the states soon raised the rate, and rates and thresholds now differ from state to state.

In which country do employers pay a 31.42% social security charge on top of each worker's salary?

Sweden: as of 2026 the full rate is 31.42%, charged on top of a worker's salary rather than taken out of it, so the pay packet is untouched. For staff aged 67 or over, employers pay only about 10%.

Alongside Nunavut, which part of Canada makes employees themselves pay a 2% payroll tax?

Northwest Territories: other Canadian payroll taxes fall on employers, but since 1993 this one has come out of the pay of everyone who works there, wherever they live. Nunavut split away in 1999 and levies the same tax.