Payroll costs include: employee salary, wages and commissions; payment of cash tips; payment of vacation; parental, family, medical or sick leave; allowance for dismissal or separation; payment required for group health benefits (including insurance premiums); or payment of state or local tax assessed on employee compensation; and for sole proprietors or independent contractors, income or compensation not in excess of $100,000 per employee.
Payroll costs exclude compensation of an individual person in excess of $100,000 (when annualized); compensation to an employee whose principal residence is outside of the U.S.