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Financial Terms | |
Contribution |
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Definition of ContributionContributionAlso the difference between the selling price and variable costs, which can be expressed either per
Related Terms:Contribution marginThe difference between variable revenue and variable cost. contribution marginAn intermediate measure of profit equal to sales revenue contribution marginthe difference between selling price and Contribution marginThe margin that results when variable production costs are subtracted contribution margin ratiothe proportion of each revenue dollar remaining after variable costs have been covered; Contribution PrincipleThis is the principle which specifies the factors that must be taken into account when calculating dividends. At Canada Life, the key factors are: interest earnings, mortality, and operating expense. Contribution RateThe percentage tax charged by a state to an employer to ![]() Defined contribution planA pension plan in which the sponsor is responsible only for making specified Defined Contribution PlanA qualified retirement plan under which the employer Equity contribution agreementAn agreement to contribute equity to a project under certain specified Federal Insurance Contributions Act of 1935 (FICA)A federal Act authorizing the government to collect Social Security and Medicare payroll taxes. product contribution marginthe difference between selling price and variable cost of goods sold Self-Employment Contributions Act (SECA)A federal Act requiring self-employed business owners to pay the same total tax rates for Social Security and Throughput contributionSales revenue less the cost of materials. total contribution marginsee contribution margin Benefit Ratio MethodThe proportion of unemployment benefits paid to a company’s Benefit Wage Ratio MethodThe proportion of total taxable wages for laid off breakeven pointThe annual sales volume level at which total contribution Country selectionA type of active international management that measures the contribution to performance Defined benefit planA pension plan in which the sponsor agrees to make specified dollar payments to degree of operating leveragea factor that indicates how a percentage change in sales, from the existing or current earned incomeEarned income is generally an individual's salary or wages from employment. It also includes some taxable benefits. Earned income also includes business income if the individual is self-employed. Earned income is used as the basis for calculating RRSP maximum contribution limits. Employee Stock Ownership Plan (ESOP)A fund containing company stock and owned by employees, paid for by ongoing contributions by the employer. FICAThe acronym for the Federal Insurance contributions Act, also used to describe Financial AssistanceEconomic assistance provided by unrelated third parties, typically government agencies. They may take the form of loans, loan guarantees, subsidies, tax allowances, contributions, or cost-sharing arrangements. IRA/Keogh accountsSpecial accounts where you can save and invest, and the taxes are deferred until money Labour oncostThe non-salary or wage costs that follow from the payment of salaries or wages, e.g. National Leverage ratiosMeasures of the relative contribution of stockholders and creditors, and of the firm's ability Money purchase planA defined benefit contribution plan in which the participant contributes some part and Official unrequited transfersInclude a variety of subsidies, military aid, voluntary cancellation of debt, Owners' equityThe total of all capital contributions and retained earnings on a business’s Payroll StabilizationThis calculation is used by states to determine the unemployment Planned amortization class CMO1) One class of CMO that carries the most stable cash flows and the Private unrequited transfersRefers to resident immigrant workers' remittances to their country of origin as profitThe general term profit is not precisely defined; it may refer to net profit moduleThis concept refers to a separate source of revenue and Profit Sharing PlanA retirement plan generally funded by a percentage of company Qualified Retirement PlanA retirement plan designed to observe all of the requirements Registered Pension PlanCommonly referred to as an RPP this is a tax sheltered employee group plan approved by Federal and Provincial governments allowing employees to have deductions made directly from their wages by their employer with a resulting reduction of income taxes at source. These plans are easy to implement but difficult to dissolve should the group have a change of heart. Employer contributions are usually a percentage of the employee's salary, typically from 3% to 5%, with a maximum of the lessor of 20% or $3,500 per annum. The employee has the same right of contribution. Vesting is generally set at 2 years, which means that the employee has right of ownership of both his/her and his/her employers contributions to the plan after 2 years. It also means that all contributions are locked in after 2 years and cannot be cashed in for use by the employee in a low income year. Should the employee change jobs, these funds can only be transferred to the RPP of a new employer or the funds can be transferred to an individual RRSP (or any number of RRSPs) but in either scenario, the funds are locked in and cannot be accessed until at least age 60. The only choices available to access locked in RPP funds after age 60 are the conversion to a Life Income Fund or a Unisex Annuity. Registered Retirement Savings Plan (Canada)Commonly referred to as an RRSP, this is a tax sheltered and tax deferred savings plan recognized by the Federal and Provincial tax authorities, whereby deposits are fully tax deductable in the year of deposit and fully taxable in the year of receipt. The ability to defer taxes on RRSP earnings allows one to save much faster than is ordinarily possible. The new rules which apply to RRSP's are that the holder of such a plan must convert it into income by the end of the year in which the holder turns age 69. The choices for conversion are to simply cash it in an pay full tax in the year of receipt, convert it to a RRIF and take a varying stream of income, paying tax on the amount received annually until the income is exhausted, or converting it into an annuity with guaranteed payments for a chosen number of years, again paying tax each year on moneys received. Reserve RatioThis calculation is used by states to determine the unemployment contribution rate to charge employers. The ongoing balance of a firm’s unclaimed Seed Financing/CapitalGenerally, refers to the first contribution of capital toward the financing requirements of a start-up business. spousal RRSP (Canada)The RRSP rules allow you to contribute to an RRSP for your spouse and claim the deduction yourself. Your total contribution (to your own and your spouse's plan) is still subject to your normal contribution limits, minus any personal pension adjustment and any past service pension adjustment, plus any unused contribution room from prior years and any pension adjustment reversal. Generally, the advantage is that your spouse will ultimately be the one who reports the income for tax purposes when the funds are withdrawn on retirement or otherwise (certain restrictions apply). If your spouse will have a lower income than you when the funds are withdrawn, significantly lower taxes may be payable on the withdrawn amount. Target Benefit PlanA defined benefit plan under which the employer makes Tax-deferred retirement plansEmployer-sponsored and other plans that allow contributions and earnings to Unemployment InsuranceA program in which workers and firms pay contributions and workers collect benefits if they become unemployed. variable cost ratiothe proportion of each revenue dollar Related to : financial, finance, business, accounting, payroll, inventory, investment, money, inventory control, stock trading, financial advisor, tax advisor, credit. |