Annual Payroll Law and Legal Definition
Annual payroll is the payroll that 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 and reported on Internal Revenue Service (IRS) Form 941 as taxable Medicare Wages and tips (even if not subject to income or FICA tax). Commissions paid to independent (non-employee) agents, such as insurance agents shall be exempted from the annual payroll. Annual payrolls for corporations shall include amounts paid to officers and executives.
