Leave of Absence
What is Leave of Absence? A leave of absence (LOA) is an officially approved period of time during which an employee is permitted to be away from their job to handle specific, significant life events. A leave of absence is usually extended and covers exceptional circumstances, such as welcoming a new child, recovering from a […]
Parent company
What is a Parent Company? A parent company is a business that owns a controlling interest in another company, allowing it to oversee operations, direct management, and make critical corporate decisions. A company becomes a parent company by either creating a new business from scratch (a subsidiary) or by purchasing a majority of the voting […]
Foreign subsidiary
What is a Foreign Subsidiary? A foreign subsidiary is a separate legal entity of a parent company that is registered and operates under the laws of a foreign country, but is entirely or mostly owned by the parent company located elsewhere. Because it is a distinct corporate entity, the foreign subsidiary handles its own local […]
Non-Compete Agreement
What is a Non-Compete Agreement? A non-compete agreement (or non-compete clause) is a formal legal contract where an employee agrees not to enter into direct competition with their employer during or after their employment ends. This means the worker cannot quit to work for a direct competitor or start a rival business within a specific […]
Employee Misclassification
What is Employee Misclassification? Employee misclassification is a serious regulatory compliance error that happens when a business labels a worker as an independent contractor (or freelancer) when they are actually functioning as a regular employee. By doing this, the business inadvertently skips out on paying mandatory payroll taxes, social security, and employment benefits that the […]
Contract employee
What is a contract employee? A contract employee is a worker hired to perform specific services for a pre-determined period or until a particular project is completed. Unlike permanent employees, their employment automatically ends when the contract term expires, and they are typically hired to fill short-term business needs, seasonal peaks, or specialized project gaps. […]
Base Salary
What is Base Salary? Base salary is the initial, guaranteed amount of money an employer agrees to pay an employee in exchange for their work. It is the core baseline of a paycheque before any additions like overtime, performance bonuses, commissions, or benefits, and before any subtractions, like taxes and healthcare deductions. Base Salary vs. […]
Permanent Establishment (PE)
What is Permanent Establishment (PE)? Permanent Establishment (PE) is a legal tax trigger that happens when a foreign country decides your business has done enough continuous work there to be treated as a local company for tax purposes. Once you trigger PE, you cannot just pay taxes in your home country anymore; you must pay […]
Annualized Salary
What is Annualized Salary? An annualized salary is the total estimated amount an employee would earn over a full 12-month calendar year, calculated using their short-term, partial, or hourly earnings. It takes an employee’s current pay rate (whether hourly, weekly, monthly, or project-based) and projects it across a standard full-year schedule, typically 2,080 working hours […]
Administrative services organization (ASO)
What is an Administrative Services Organization (ASO)? An Administrative Services Organization (ASO) is a service provider that handles the administrative side of human resources for a business but does not enter into a co-employment relationship. The ASO acts as a specialized third-party service provider, managing tasks such as payroll, benefits administration, and regulatory compliance on […]