Glossary
AI Finance Glossary
Plain-English definitions of AI, accounting, and SaaS-finance terms.
Categories
A
B
Base Salary
Fixed cash compensation paid to an employee on a regular schedule regardless of performance or company results.
Batch Processing
Grouping payment transactions for processing together at scheduled intervals rather than individually in real time.
Benefits Administration
The management of employee benefits programs including health insurance, retirement plans, PTO, and other compensation components.
C
COBRA
A federal law requiring employers with 20+ employees to offer continuation of group health insurance coverage to employees who lose coverage due to qualifying events.
COBRA Continuation
Federal law allowing employees to continue group health coverage after leaving employment by paying full premiums.
Cliff Vesting
A vesting provision where no equity vests until a minimum service period (the cliff) is completed, protecting against early departures.
E
Employer of Record
A third-party company that legally employs workers on behalf of another business, managing payroll, taxes, and compliance across jurisdictions.
Equity Compensation
Non-cash compensation in the form of company ownership interests, including stock options, RSUs, and restricted stock, used to attract and retain talent.
F
FLSA Compliance
Adherence to Fair Labor Standards Act requirements for minimum wage, overtime pay, and recordkeeping.
FMLA
Federal law providing eligible employees up to 12 weeks of unpaid, job-protected leave annually for qualifying family and medical reasons.
Flexible Spending Account
An employer-sponsored account allowing pre-tax contributions for qualified medical or dependent care expenses, with annual use-it-or-lose-it requirements.
H
P
Payroll Tax
Taxes levied on wages and salaries, split between employee withholding and employer contributions, funding social programs like Social Security and Medicare.
Per Diem
A fixed daily allowance provided to employees for meals and incidentals while traveling for business, simplifying expense management and IRS compliance.
Performance Bonus
Annual or periodic cash award tied to achieving individual or company performance targets.
Prevailing Wage
Minimum wage rate for construction and service workers on government-funded projects, set by the Department of Labor.
R
S
T
Tax Withholding
The process by which employers deduct income taxes from employees' paychecks and remit them directly to tax authorities on the employee's behalf.
Total Compensation
Complete value of all monetary and non-monetary benefits provided to an employee in exchange for their work.
U
V
Variable Pay
Performance-contingent compensation including bonuses and commissions that fluctuates based on results.
Vesting Schedule
The timeline over which an employee earns the right to exercise stock options or receive equity grants, typically over four years.
W
#
1099 Contractor
A self-employed independent contractor who provides services to a business without being classified as an employee.
401(k) Matching
An employer contribution to employees' 401(k) retirement accounts, typically matching a percentage of employee contributions up to a salary limit.