Human Resources

Time card calculators can be a great tool to help small business owners manage their employees’ hours. Our calculator will allow you to manually enter when your employees clock in and out each day, in addition to the total amount of breaks taken, to calculate the total hours they worked in a given week. It will also allow you to determine the breakdown between regular and overtime hours. How to Use Our Time Card Calculator To calculate your employees’ work time using our time card calculator, follow these steps: Enter the time that your employee clocked in for each day (Select Hour, Minute, AM/PM). Enter the time that your employee clocked out for each day (Select Hour, Minute, AM/PM). Enter the total hours and minutes that your employee took breaks for each day. Once the information is entered, click “Calculate.” Our calculator will provide you with the total hours worked in addition to the breakdown between regular hours and overtime hours. We provide you that breakdown using two different overtime methods so that you can choose which is applicable to you based on your state overtime laws. What Our Time Card Calculator Is Not Useful For Our time card calculator won’t be helpful for some of the more complicated calculations that are required when doing payroll. A few of those include: Calculating insurance deductions (medical, dental, and vision) Calculating garnishments Calculating taxes (FICA, state and federal income taxes, and unemployment taxes) When to Use an Alternative Time Calculator If you have a large number of employees or issues with lateness or time fraud, such as buddy punching, using a time card calculator or time sheet to record hours might not be a long-term solution for your business. Here are other options that we think may be a better fit: Time Tracking Software: There are a ton of free and affordable software available that allow your employees to record their time. Using a timekeeping software negates the need for manual calculations, and many of them can integrate directly with your payroll software. With in-depth features such as biometric screening and GPS-enabled clock-ins, time tracking software can provide you with a valuable layer of protection. Payroll Software: Many payroll software have built-in timekeeping systems that allow your employee to track their time, view their paystubs, update their tax elections, and more all in the same portal. This can be a huge time saver if you have a complicated pay structure (commissions, bonuses, and tips) or if you have a large number of employees. Using payroll software can be a great tool to streamline your payroll process so that you can focus on running your small business. Bottom Line Time card calculators are a really valuable asset for small business owners and can make managing your people’s time much simpler. Our calculator gives you the ability to manually enter the time your employees work, and any breaks throughout the day, to calculate the total hours worked that they’ll need to be paid for. Calculating the total hours worked, in addition to the breakdown of regular and overtime hours, can be a huge help when running your payroll.

Benefits are an important part of an employee’s paycheck—and vital to remaining in compliance with the law. QuickBooks Payroll monitors compliance issues in all 50 states and can help you secure health benefits and workers’ compensation. Also, if you’re working with an outside broker, you can still integrate your benefits into the payroll. We’ll cover how to set up benefits with QuickBooks Payroll Online plus how to choose which benefits you want to offer. This tutorial is based on QuickBooks Online Elite Payroll, the most premium plan. Some features may not be available on other plans, but instructions for common features should be the same. QuickBooks Payroll offers complete payroll, including tax filing and payments, plus health insurance. Advanced plans offer time tracking, workers’ comp, HR assistance, and more. Visit QuickBooks Payroll to find the best plan for you. Choosing Health Insurance Benefits in QuickBooks Payroll You can select the health insurance benefits you want to offer employees directly within the QuickBooks Payroll system. There are a variety of national insurance providers to choose from, and they all have multiple plan options to fit your employees’ needs. We’ll also show you how to set up fringe benefits with QuickBooks, in the event that you want to make contributions to cover some of the cost of your employees’ benefits. To get started, follow the steps below: From the QuickBooks dashboard, click Payroll on the side menu. Go to the Benefits Tab. Click Find My Plan. QuickBooks then uses your employee data to select the best plans for you. 4. Narrow your choices. QuickBooks provides you with a list of plans. You may have hundreds to choose from, so use the filters at the top to narrow down your choices. Be sure to consider the types of employees you have, especially if you have a large number of a single demographic (high schoolers vs seniors vs new parents). Some plans are a better fit for certain groups. 5. Compare the best plans. Click on the plans that interest you to do a side-by-side comparison. You can also print the comparisons if it’s easier for you. 6. Click on Start Application for the plan you want. The process takes 15–20 minutes. 7. Add vision and dental insurance if desired. The software populates complementary plans. 8.  Select the coverage start date. 9. Choose how contributions are determined by deciding whether you want to split payments by a flat dollar amount or percentage of the total premium. The software will display the amount your employee will pay—and your company, if you want to set up fringe benefits. 10. Choose whether or not to include part-time employees or domestic partners under coverage. By law, you’re required to offer health insurance coverage to eligible employees once you reach the equivalent of 50 full-time employees (FTE). However, you don’t have to offer coverage to part-time employees unless you choose to. 11. Set waiting periods for new employees. This is a good idea for businesses with high turnover such as restaurants, or for businesses with a probationary period for new hires. 12. Add employee information. Employees will then get an invitation to apply for insurance. Once everyone has filled out their forms, the full application can be sent to the insurance company. 13. Upload documents. Different insurance companies require different documents. The application includes links for getting the files. You may also need to submit the most recent payroll journal. You can get this from the Reports section of QuickBooks. Choosing Retirement or 401(k) Benefits in QuickBooks Payroll Retirement plans are another benefit QuickBooks offers its customers. It partners with Guideline to provide several 401(k) packages. 1. From QuickBooks, click Payroll on the side menu. 2. Go to the Benefits Tab 3. Click Find My Plan in the 401(k) plans box. QuickBooks takes you to the Guideline website. You have three plans to choose from. There’s also a cost estimator on the webpage. 4. Click on the plan you are interested in and begin the application process. It will ask you who does payroll. Click QuickBooks. An agent will contact you to finish the application. If you decide to select a different provider or type of insurance plan, you’ll need to get it on your own and add it manually to payroll. We’ll cover that later. Setting Up Other Paid Benefits Other paid benefits, such as pet insurance, child care, or mileage need to be manually added. The process is the same regardless of the QuickBooks Payroll plan you have. Benefits Needing Employee Contributions If it’s a benefit the employee pays part of, such as child care or other insurance, enter it under Add Deductions. 1. Click on Payroll in the side menu. Then select Employee. 2. Scroll to Does {employee} have any deductions. 3. Click on Add a new deduction. Already established deductions are listed. If you do not find the one you are looking for, click New Deduction/contribution. 4. Select from the dropdown the new deduction. If it’s not listed, click Other deductions and add it. 5. And remember, you have a dropdown menu of choices. If the option you’re looking for is not there, click on Other after tax deductions and create a name for it. 6. Some standard benefits have several fields to fill out, such as the amount deducted per paycheck in terms of dollar amount or percentage of the paycheck. In the case of a flat dollar amount, you may need to do the calculations yourself. 7. Indicate if the benefit is taxable. If not, then select pre-tax. The money will be removed from tax calculations. If you are not sure, consult the plan administrator or QuickBooks for guidance. Note: If you integrate your insurances into QuickBooks Payroll, some of these fields may automatically populate for you. Additional Pay If the benefit you provide involves additional pay, like bonuses or commissions, housing, or per diem, you can find these in Add Pay Types. Note: Group Term Life Insurance is included under Additional Pay Types. 1. Click on Payroll in the side menu. Then select Employee. 2. Go to Add Pay Types. 3. Scroll to Common Pay Types. 4. Click on pay type if listed or create your own. You can add additional pay options, if the one you're looking for isn't showing. 5. Click Save. COVID-19 Benefits If you provide sick leave for employees who contracted COVID-19, you can opt to pay employees for it and apply a credit to your payroll tax bill. To apply this in QuickBooks Payroll, go to the Families First Coronavirus Response Act tab in Add Pay Types. The CARES act, which provided benefits that helped employers retain employees during the pandemic, is also listed under Add Pay Types. Setting Up Time Off Benefits in QuickBooks Payroll Paid time off (PTO) and unpaid time off are important considerations. The federal government doesn’t have any strict regulations regarding PTO. However, your state might; it can also make you a more desirable employer. With QuickBooks Payroll, PTO is easy to set up for tracking, and employees can use their portal to request when they need to use it. Follow these four steps to set up your company’s PTO benefits: 1. Click on Payroll in the side menu. Then select Employee. 2. Go to Add Pay types. 3. A popup window appears; scroll to Time Off Pay Policies and click on Add New Policy. 4. Fill in the rules for accrual, hours earned, and maximum hours allowed. Click Save. Please note: Once you’ve added a policy, it’s available on the dropdown menu for you to add to other employees’ profiles. Setting Up Benefits in QuickBooks Desktop Payroll QuickBooks Desktop has different menus from the online version, but the steps are similar. It offers two ways to set up benefits: EZ Setup, which provides a wizard to lead you through the process, and Custom Setup, which has more steps but gives you more options. The help center on the website has step-by-step instructions—more, in fact, than it does for the online version. Bottom Line Employee benefits are important not only for legal compliance but also for attracting and keeping great workers. QuickBooks Payroll offers health and other benefits and can help you administer and track benefits beyond what it offers. This tutorial offers the basics for choosing and setting up benefits in QuickBooks Payroll. For more information, sign up for a free trial of QuickBooks Payroll and explore for yourself.

Shift differential is non-mandatory premium pay companies offer to eligible employees who work certain shifts (i.e., those outside their normal schedule or considered less desirable such as overnight or holidays). Although there are no federal or state laws that require shift differential pay, some businesses offer this premium pay to employees in various situations as an added benefit for working under certain conditions. A shift differential policy clearly spells out the details surrounding who is eligible, how much pay will be added, and any exceptions. Download our free shift differential policy template and customize it to meet your specific needs. How Shift Differential Works Because shift differential isn’t required by law, employers have flexibility within their policies. You may choose to offer employees a flat dollar amount per hour or a percentage, depending on their classification. No matter what, your policy should clearly outline eligibility requirements. Through detailed time-keeping records, you can calculate the total pay due to an employee eligible for shift differential pay. Determining Eligibility In most cases, only hourly employees are eligible for shift differential. However, some companies want to offer this benefit to salaried employees as well. Companies are free to offer shift differentials to all or just certain classes of employees. Be aware of employee classification as it relates to shift differentials. Your business may have two different classes of employees: exempt and nonexempt. Under the Fair Labor Standards Act (FLSA), exempt employees are not subject to overtime laws and, therefore, not eligible for overtime pay. Nonexempt employees are, however. While all your employees can be eligible for shift differential, only nonexempt employees will be eligible for both overtime pay and shift differential. This requires a unique calculation to first determine shift differential pay and then overtime pay. We discuss this further in our calculating shift differential pay section below. Salaried Employees If you expect your salaried employees to regularly work odd or undesirable hours, you can add shift differentials to every paycheck (or as a quarterly or annual bonus), in the form of a flat rate or percentage. A percentage of the employee’s salary/hourly rate will be more difficult to calculate, whereas a flat supplement on every paycheck will make payroll easier on you. You may also choose to offer premium pay based on the hours the salaried employee works, although this is more complicated and requires detailed timekeeping records, something salaried employees aren’t always ready to do. For example, if you need an employee who makes $15 per hour to work security overnight at an apartment complex, you may offer them an additional $3 per hour in shift differential pay for hours worked between 8 p.m. and 8 a.m. Hourly Employees Calculating shift differentials for hourly employees is not as difficult as it may seem. Because hourly employees already record their hours in your time keeping system, you will know exactly how much shift differential pay they’re entitled to. Where it can become confusing is in calculating overtime. In addition to the FLSA’s strict rules, some states even go further, mandating additional overtime pay in certain situations. Under the FLSA, overtime pay is calculated at one and a half times the employee’s regular hourly rate. So, if an employee is paid $10 per hour, they must receive an additional $5 per overtime hour worked ($15 per hour overtime pay). Eligible Work Hours Your policy should specify the hours that are eligible for premium pay. Many companies designate overnight hours as eligible for shift differential pay (8 p.m. until 8 a.m.). List all hours that your business is open and tag them as either eligible or ineligible in your policy to avoid confusion. Calculating Shift Differential Pay To calculate total pay due for an employee entitled to shift differential pay, you need to determine their base rate for regular hours, overtime hours, and shift differential hours. Determine Regular Hours - Number of hours worked x hourly rate Determine Overtime Hours - Number of overtime hours worked x hourly rate x 1.5 Determine Shift Differential Hours - Number of shift differential hours worked x adjusted hourly rate (including premium pay) Determine Shift Differential Overtime Hours - Number of shift differential hours worked x adjusted hourly rate (including premium pay) x 1.5 Calculate Total Due - Regular Hours + Overtime Hours + Shift Differential Hours EXAMPLE: An employee worked 50 hours last week. They make a regular rate of $10 per hour and five of their 50 hours were eligible for shift differential at $2 per hour. Here’s how to calculate what you owe the employee: Forty hours of regular pay (40 x $10 = $400). Five hours of overtime pay (5 x $15 = $75). Five hours of shift differential pay, calculated at $10 + $2. The shift differential hours were subject to overtime pay as well (1.5 x $12 = $18).The total rate for those five hours (5 x $18 = $90). Add it all together ($400 + $75 + $90 = $565). For these 50 hours worked, you would owe the employee $565. Because the employee worked overtime during a period where they were entitled to shift differential pay, they are getting time and a half for the shift differential period. This creates even more incentive for the employee to help you cover those less desirable hours. Types of Shift Differential There are several common types of differential pay to understand: Pros & Cons of Paying Shift Differential Shift differential pay has historically been a significant benefit to offer that helps set your business apart from the competition. By providing premium pay, you can attract and retain top talent in your industry, reducing your hiring and retention costs. You’re probably thinking that all of this is great but, ultimately, it’s going to cost your company more money. Initially, it will. Higher salaries mean more outgoing payroll and taxes, cutting into your margins. But don’t look at this increased cost in a vacuum. You can save money in other areas—such as hiring, employee retention, and employee engagement, just to name a few. Industries That Commonly Offer Shift Differentials Any company may choose to offer shift differentials, but they are not common in every industry. Businesses that operate during normal business hours rarely need to offer shift differential pay. This type of premium pay is commonly offered in four industries: restaurants and retail, manufacturing, customer service, and healthcare. If your company operates in one of these industries, you would be wise to consider what your competitors offer. Even if none of your competitors offer shift differential pay, offering it to your employees might be a way to set yourself apart from your competition and make yourself a best-in-class employer. Restaurants and Retail: Many restaurants and retail establishments are open late, some 24 hours a day. To keep the shop running smoothly overnight or into the late evening hours, many businesses offer shift differential pay to employees working late and overnight hours. Manufacturing: Factories rarely close; they are usually open 24/7 and most holidays, even on Christmas. Factory workers can make extra money at a company that offers shift differentials for working second and third shifts and/or holidays. Customer Service: Companies that operate in the customer service industry need to have a full staff during peak hours. For many businesses, peak hours can be early evenings and weekends. By offering shift differential pay to employees who work later hours and weekends, customer service companies can ensure a full staff and happy customers. Healthcare: Healthcare is another 24/7 industry. While your family doctor’s office probably won’t offer shift differential pay, many hospitals do to incentivize doctors, nurses, and administration staff to work nights and weekends. Other examples include healthcare professionals working in natural disaster areas and war zones. These salaried employees may be offered shift differentials to help these areas of the country and world get the medical attention that’s needed. Bottom Line When your company operates beyond the traditional 9 to 5, you may look for ways to incentivize employees to work outside those hours. Shift differential policies are a great way for you to recognize your employees who work less desirable hours and attract high-quality employees. It also helps set yourself apart from your competition. With no laws requiring shift differential, you have a lot of flexibility. The key is creating a clear, comprehensive policy. You Might Also Like … Learn about scheduling employees’ work shifts Check out tips on employee management

Employers must fill out IRS Form W-2 and supply them to employees, the IRS, and some state tax agencies no later than Jan. 31 of the year following the previous tax year. Employees use it to report payroll taxes paid, and the IRS uses it to determine how much is owed in taxes, if any, or if employees are due a refund. We’ll cover the basics of how to fill out a W-2 Form in this article, as well as when and how to submit it. Download 2022 W-2 Form You should submit this downloaded copy of the form to your employees so that they can file with their state, city, or local tax agency. You cannot use this to file with the federal government. You must order forms or file online. Instructions for Boxes A–E a: Enter the employee’s Social Security number. You may truncate this on employee Copies B, C, and 2, but you must use the full SSN on Copy A. There are six copies of the W-2, that are each required to be submitted to a different recipient. We break this down in more detail later. b: Input your business Employer Identification Number (EIN). c: Indicate your business name, address, and ZIP code. Use the same information as on your Forms 941, 941-SS, 943, 944, CT-1, or Schedule H (Form 1040 or 1040-SR). Do not use commas or periods in return addresses. If you are an agent handling taxes for another business and have an approved Form 2678, Employer/Payer Appointment of Agent, you enter your information instead of the employer’s. d: Enter your control numbers for payroll purposes if you use them. Otherwise, leave this field blank. e and f: Enter the employee’s name as shown on their Social Security card (which should be on their W-4). If their name will not fit, use full last name and first and middle initials. When entering their address, do not use commas or periods. Instructions for Boxes 1–9 1: Enter the total wages earned for the year, including tips, taxable benefits, employer contributions to long-term care benefits, and more. See the IRS Form W-2 instructions for an exhaustive list. Do not include elective deferrals, such as contributions to a 401(k). Information on those deferrals can be found on pages 16–17 of the instructions. 2: Enter the total federal income taxes withheld for the year, including the 20% excise tax withheld on excess parachute payments, if applicable. 3: Before filling this out, separate Social Security tips and allocated tips. Then, enter the total wages paid before payroll deductions that are subject to employee Social Security tax, excluding Social Security and allocated tips. Do include signing bonuses, employee and employer contributions to health savings accounts, and other income as listed in the instructions. The total of boxes 3 and 7 cannot exceed $142,800. The number in this box can be more than the number in box 1, as you don’t take any deductions out here. 4: Enter the total employee Social Security tax withheld. For 2022, it should not exceed $9,114. 5: Enter the total wages and tips subject to Medicare taxes. This is the total of boxes 3 and 7 and has no upper limit. 6: Enter the total amount of Medicare tax withheld. If your employee made over $200,000 and paid additional Medicare, include it in this number. Do not include your share. 7: Enter the tips your employee reported, even if you did not collect Social Security tax for them. The total of boxes 3 and 7 cannot exceed $142,800. 8: If you operate a restaurant, show tips allocated to employees. This amount should not be included in boxes 1, 3, 5, or 7. 9: This box no longer applies. Leave it blank. Instructions for Boxes 10–20 10: Enter any deductions your employee gets for child care, including the fair market value of a daycare facility sponsored by you. 11: If your employee received payments from a nonqualified plan (such as a retirement plan) or a nongovernmental section 457(b) plan, enter that amount here. If they get more than one, enter the total here. Do not include any deferred amounts reported in boxes 3 or 5. 12a through d: Enter the following codes as applicable. You can enter them in order, but do not need to skip a box if a code does not apply. The codes are on page 30 of the IRS Form W-2 instructions. Code A: Uncollected Social Security or RRTA tax on tips Code B: Uncollected Medicare tax on tips Code C: Taxable cost of group-term life insurance over $50,000 Codes D through H, S, Y, AA, BB, and EE: Elective deferrals and ROTH contributions 13: Check the boxes that apply. See page 22 of the IRS Form W-2 instructions for details. Statutory employee: Their earnings are subject to Social Security and Medicare taxes but not federal income tax. Retirement plan: If the employee was an active participant in a pension, annuity plan, SIMPLE retirement, or other qualified retirement plans. Third-party sick pay: Check if you are a third-party sick pay payer filling out the form for an insured employee or if you are reporting sick pay payments made by a third party. 14: Use this section for other information you want to leave your employee, such as a company car’s lease, disability insurance taxes withheld, union dues, and educational assistance payment. See page 22 of the IRS Form W-2 instructions for a complete list. 15 through 20: Enter information about state or local taxes. Use the 2-letter state abbreviations and the employer state ID number. If reporting more than one state, separate them with the broken line. Need to learn more about W-2 forms, like how they work, who should fill them out, and when to submit them? Choose the information you need to know below: Bottom Line The IRS Form W-2 is not only important for you and the federal government but also for your employees. They need it to fill out their personal income taxes and get them filed on time. As an employer, you need to fill out and file the W-2s by Jan. 31st of each year. Payroll software can help with ensuring your information is accurate. If you’re in the market for affordable payroll software, consider . You can set your payroll to run automatically, and the system will prepare and send your employees’ W-2 forms before the Jan. 31 deadline. Sign up for its free 30-day trial to see if it works for you.

Doing payroll in Maryland requires knowing local laws, such as the $11.75 state minimum wage, and keeping track of state and local income tax withholding schedules. Maryland has more nuances than the average state—for instance, there are 23 counties that charge local jurisdictions. It also has its own state laws that affect payroll, from employee calculation to paid time off, some of which are stricter than federal law. The best way to manage your payroll, from pay runs to maintaining documents and employee files, is to use payroll software like . It makes it easy to stay compliant with payroll laws, pay employees on time in a variety of ways, and keep documents in an easy-to-access file system. Learn more about QuickBooks Payroll and see if it’s right for you. Step-by-Step Instructions for Doing Payroll in Maryland Step 1: Set up your business as an employer. Get your company’s Federal Employer Identification Number (FEIN). If your company is brand-new, you may need to apply for a FEIN. This is a simple process that can be completed online via the Electronic Federal Tax Payment System (EFTPS). Meanwhile, if you work for a company that already has one, keep the FEIN handy. The FEIN is required to pay federal taxes. Step 2: Register with Maryland. Register with the state within 20 days of doing business by sending a Combined Registration Application to the Maryland Department of Labor. Alternatively, you may fill out the application online. You will also need to apply for a BEACON account for paying State Unemployment Tax Act (SUTA) taxes. Step 3: Create your payroll process. You may have inherited a payroll process if you work for an established business. However, if your company is new, you may need to establish your own. Decide how often you’ll be paying employees, when you’ll pay them, and how you’ll track and calculate hourly employees’ work time. You can opt to do payroll yourself by hand, set up an Excel payroll template, or sign up for a payroll service to help you handle your Maryland payroll. Step 4: Have employees fill out relevant forms. New employees should submit certain documentation, including payroll forms, during onboarding. All employees must complete I-9 verification no later than their third day on the job. Every employee must also have a completed W-4 on file. For Maryland, you’ll also need the Form MW507. If you choose to pay your employees using direct deposit, make sure to collect direct deposit information, as well. Step 5: Collect, review, and approve time sheets. This step is one you’ll repeat as you do payroll each period. Keeping track of employees’ hours is essential for ensuring accurate payroll. Whether you use paper time sheets or time and attendance software, ensure that you review time sheets for accuracy and discuss any errors or issues with employees right away. Having employees sign their time sheets is a good idea, whether they do so electronically or by pen on paper. Step 6: Calculate employee pay and taxes. Using a standard process and payroll software to calculate pay reduces errors. There are many ways to calculate payroll, and it’s up to you to decide which is best for you. You can use payroll software or even Excel. Step 7: File payroll taxes with the federal and Maryland state government. Follow the IRS instructions for federal taxes, including unemployment. Maryland Income Taxes: File and pay these online via bFile Maryland. You can also bulk upload W-2s. Ensure that you withhold by the following schedule: SUTA: Pay your SUTA by automated clearing house (ACH) or credit card via BEACON. State unemployment insurance (UI) tax reports and payments are due by the following dates: If the due date for a report or tax payment falls Saturday or Sunday, reports and payments are due the following business day. Step 8. Document and store your payroll records. In Maryland, it’s best to retain your payroll documents for at least three years. For complete information, read our article on what payroll documents to keep or check out Maryland’s recordkeeping requirements. Step 9: Complete year-end payroll reports. At the end of the year, you will need to first complete all W-2 forms for your employees and 1099 forms for your independent contractors. These forms must be provided to employees and contractors no later than Jan. 31 of the following year. Maryland Payroll Laws, Taxes & Regulations Naturally, you need to begin by following federal law for income taxes, Social Security, Medicare, and Federal Unemployment Tax Act (FUTA) taxes. Social Security and Medicare are called Federal Insurance Contributions Act (FICA) taxes and are withheld from each employee’s paycheck at respective rates of 6.2% and 1.45%; you’ll also pay a matching amount out of your bank account. Maryland Taxes Maryland has state and local taxes, making it more complicated to manage. You’ll need to know where each employee resides so you’re aware of which tax agencies you’re responsible for paying. State Income Taxes Maryland has a graduated income tax rate of a flat amount plus a percentage over a specific income. You can find the tax tables on the Maryland Taxes website to help you determine how much you should withhold. You need to withhold taxes for all employees except the following: Those making less than $5,000 annually Domestic workers in a private home, college club, fraternity, or sorority Clergy Nonresident maritime workers Certain other nonresidents Single and student employees with total income less than specific amounts, such as $234.62 weekly or $12,200 annually. See the chart on Page 9 of the Maryland Withholding Guide for a full list. Military spouses claiming exemption under the Military Spouse Residency Relief Act. (Be sure they fill out a Form MW507M.) Local Income Taxes In addition, Maryland’s 23 counties and Baltimore City also levy local income taxes, which range between 2.25% and 3.2%. There are taxes for nonresidents as well. The latest rates by county are below: Maryland Resident Employees Who Work in Delaware If you have offices in Delaware, your employees who are Maryland residents are taxed at different rates. Find the rates table on Page 10 of the Maryland Withholding Guide. Unemployment Insurance (UI) Maryland charges SUTA taxes, which are based on a taxable wage base of $8,500. The standard rate for new employers is 2.3% (which has not changed from 2021). Rates range from 2.0% to 10.5% for experienced employers and are noted in Rate Table C. Employers in the construction industry headquartered in another state have a 5.4% rate. An employer’s UI benefit ratio is computed by dividing their experience rate by the amount of taxable wages paid to employees in the prior three fiscal years ending June 30. The experience rate is the dollar amount of UI benefits paid to former employees. The following employee types are exempt from UI coverage in certain conditions, which you can find in the Maryland Employer’s Quick Reference Guide: Taxicab drivers Owner-operated tractor drivers in certain E & F classifications Maritime employment Election workers Church employees and clergy Railroad employment Newspaper delivery Insurance and real estate sales Messenger service Direct sellers Foreign employment Work-relief and work-training Family members Hospital patients Student nurses or interns Yacht salespersons who work for a licensed trader on solely a commission basis Services of aliens who are students, scholars, trainees, teachers, etc., who enter the US solely to pursue a full course of study at certain vocational and other non-academic institutions Recreational sports officials Home workers Casual labor, such as yardwork Workers’ Compensation Insurance Employers who have one or more employees, full- or part-time, must provide workers’ compensation insurance. You can purchase it from a licensed insurance company or the Chesapeake Employers’ Insurance Company, which is Maryland’s state-operated fund. Minimum Wage Laws in Maryland The Maryland minimum wage applies to workers 18 and older. Employees under 18 must earn at least 85% of the minimum wage. Maryland is gradually increasing its minimum wage to $15. These are the current published rates: The minimum wage in Maryland is scheduled to reach $13.25 on Jan. 1, 2023 and then $14.00 on Jan. 1, 2024. The following exemptions apply: Immediate family Certain agricultural employees Executive, administrative, and professional employees Outside salesmen Commissioned employees Employees who are trainees in a public school special education program Non-administrative camp employees Restaurants and bars earning less than $400,000 gross annually Drive-in theaters Food canning establishments If an employee earns more than $30 per month in tips, they must be paid the state minimum wage. Tips can count for all but $3.63 per hour. Maryland Overtime Regulations Employees in Maryland must be paid 1.5 times their hourly rate if they work over 40 hours in a workweek, which mirrors federal overtime rules. The following exemptions apply: Cab drivers Agricultural workers (60 hours allowed) Bowling establishments (48 hours allowed) On-premise care (other than hospitals) for sick, aged, or disabled (48 hours allowed) Auto sales and repair establishments Nonprofit concert promoters, theaters, or music festivals Seasonal amusement and recreational establishments Different Ways To Pay Employees You can pay employees by cash, check, or direct deposit. However, you cannot require an employee to use direct deposit. This means you’ll need to offer at least two payment options if direct deposit is one payment method you plan to use. Maryland Pay Stub Laws Maryland requires that you provide employees with a pay stub each pay period with the following information: Gross earnings Deductions How wages are earned (salary, hourly, or commission) Net wages Overtime Piece rates Net pay You can learn more from the Pay Stub Transparency Act of 2016. Minimum Pay Frequency Employees who are not in executive, professional, or administrative roles must be paid every two weeks or twice a month. They must be paid on time; if a payday falls on a non-workday like a weekend or a holiday, they must be paid on the preceding workday, not after. Paycheck Deduction Rules You can deduct money from an employee's pay for the following: Taxes Court-ordered deductions such as child support garnishments Something of value an employee received such as an advance or loan Something the employee had expressly agreed to such as health benefits or to recompense for damages or theft caused by the employee Uniforms with the company logo Final Paycheck Laws Final paychecks must be paid on or before the employee’s regular payday. You do not need to allow an employee to work two weeks before termination or pay them for the time they were not allowed to work. Unused PTO may or may not be paid out, depending on written company policy. Unused sick leave does not need to be paid out unless written in company policy. Maryland HR Laws That Affect Payroll Maryland has some state-specific HR laws—some of which affect payroll: Maryland New Hire Reporting You must report new hires through the Maryland New Hires Reporting portal within 20 days of their hire or rehire date. If you cannot access the portal, you can fill out the New Hires Form and mail it in. Lunch and Other Break Time Requirements The only break laws in Maryland apply to minors and retail workers. Breaks for retail workers: Retail workers must receive lunch and short breaks. This applies to stores or franchises employing over 150 people working each day in the last 20 or more calendar weeks. If an employee earns more than half their earnings from commissions and they earn more than 1.5 times the minimum wage for each hour worked, they are exempt from this rule. Qualifying employees receive the following entitlements: *For employees working less than six consecutive hours, the 15-minute break requirement may be waived by written agreement between the employer and employee. **An employee who is entitled to a 30-minute break is not entitled to the 15-minute break as well. The additional consecutive hours begin following the employee's previous break. For example, if an employee works a 10-hour shift and is given a 30-minute break at hour 5, the employee would be entitled to a 15-minute break at hour 9. Breaks for Minors: Minors under 18 must receive a 30-minute break for every five hours worked. Paid Time Off Maryland does not require paid time off, vacation, or sick leave. Follow federal standards. The exception is for retail workers, who can request a religious day of rest each week, as long as they do so in writing. Paid Sick Leave In addition to the Federal Family and Medical Leave Act, Maryland employees follow two additional laws: The Maryland Flexible Leave Act authorizes employees of employees with 15 or more workers to use “leave with pay” for illnesses in their immediate family. The Maryland Earned Sick and Safe Leave Act mandates that employers earn sick leave at the rate of one hour for every 30 hours, with a maximum of 40 in a year and an accumulation of 64 hours at any time. This leave can be used for caring for one’s own mental or physical health, preventative medical care, care of a family member, maternity/paternity leave, or handling issues due to domestic violence not perpetrated by the employee. Parental Leave Eligible employees are allowed six weeks total of unpaid parental leave in a 12-month period for the birth, adoption, or fostering of a child. Day Off for Deployments If you employ more than 50 people, any employee who has worked for you at least 12 months with 1,250 hours worked in that time, is allowed a day of leave to send off or welcome a military member who is deploying on or returning from active duty outside the US. This applies only to immediate family members. It does not have to be paid leave, but you cannot require them to use accrued leave, sick, or vacation leave. Hiring Minors Minors under 18 are required to have a work permit to work in Maryland. If under 14, minors cannot get work permits. Also, minors cannot work hazardous jobs as defined by federal law. Student learners have other rules. Learn more on the DOL website or download the Minor Fact Sheet. Minors aged 14 and 15 may not work: During school hours More than three hours a day or 18 hours a week when school is in session More than eight hours a day or 40 hours a week when school is not in session Work between 7 p.m. and 7 a.m. (between 9 p.m. and 7 a.m. from June 1 to Labor Day) For minors 16 and 17, they must: Not work more than 12 hours of combined school and work in a day Have eight consecutive non-work/non-school hours every 24 hours Payroll Forms Maryland has several state-specific forms that may be applicable to your business. The state W-4 form is one all employers need; the others will depend on the type of organization you have and the type of employees. Maryland State W-4 Form MW507: Maryland’s state income tax withholding form. If not filled out, then you use the deductions listed in the federal W-4. Other Maryland State Payroll and Tax Forms MW507M: For military spouses requesting a waiver from tax withholdings MW508: Annual Employer Withholding Reconciliation Form MW508CR: For nonprofits claiming income tax credits Maryland State Directory of New Hires Form: For use if you cannot report your new hire online Federal Payroll Forms W-4 Form: To help employers calculate taxes to withhold from employee paychecks W-2 Form: Reporting total annual wages earned (one per employee) W-3 Form: Reports total wages and taxes for all employees Form 940: Reports and calculate unemployment taxes due to the IRS Form 941: Filing quarterly income and FICA taxes withheld from paychecks Form 944: Reporting annual income and FICA taxes withheld from paychecks 1099 Forms: Providing non-employee pay information that helps the IRS collect taxes on contract work Maryland Payroll Tax Resources and Sources Maryland Department of Labor: Information on labor laws and UI, plus access to forms Maryland Employment Standards Service Page: Links to notices you’re required to post for employees, plus information on minimum wage, guidelines, and questions. (Much is written for employees rather than employers.) Maryland Comptroller: Information on business taxes and where you can register your business Employer’s Quick Reference Guide for Unemployment Insurance: Who pays, how much to pay, how to pay, and other important information about SUTA Maryland Withholding Guide: Maryland employer withholding forms, plus all relevant tax tables for employers Maryland Workers’ Compensation Commission: Information about workers' compensation, mostly from an employee POV Bottom Line Maryland not only has state income tax but local income taxes as well. It charges unemployment taxes of up to 10.5%. The state’s rules on vacation and breaks are different from most, and the minimum wage is different in Montgomery County. Be sure you understand the laws affecting payroll not only for the state but also for your local area.

Ohio is one of the easiest states for employers because it has so few rules on payroll, time off, and breaks. However, its income taxes are more complex because it includes school district income taxes. Below, we cover the basics of doing payroll in Ohio. Payroll software that handles tax filing can make things easier and ensure you stay compliant. We recommend . It pays employees by check or direct deposit and tracks payroll and tax laws for all 50 states. Learn more about QuickBooks Payroll and see if it’s right for you. Running Payroll in Ohio: Step-by-Step Instructions Step 1: Set up your business as an employer. For the federal level, you need your employer identification number (EIN) and an account in the Electronic Federal Tax Payment System (EFTPS). Step 2: Register with the state of Ohio. You need to register with the Ohio Business Gateway online, at which time you’ll also set up your account for filing and paying withholdings. Alternatively, you can fill out a paper form, but it takes weeks to process. You must also register with the Department of Job and Family Services and the Employer Resource Information Center (ERIC) to pay State Unemployment Tax Act (SUTA) taxes. Step 3: Create your payroll process. If you work for an established business, you may have inherited a payroll process. But if your company is brand-new, you may need to start your payroll process, which means deciding how often you’ll be paying employees, when you’ll pay them, how you’ll track and calculate hourly employees’ work time, etc. Overall, you can opt to do payroll yourself by hand, set up an Excel payroll template, or sign up for a payroll service to help you handle your Ohio payroll. Step 4: Collect employee payroll forms. This is easiest to do during onboarding. Forms include W-4, I-9, and direct deposit information. For Ohio, you need the IT 4 (employee withholding exemption certificate). Step 5: Collect, review, and approve time sheets. You may use a paper time sheet or sign up for free or low-cost time and attendance software. Step 6: Calculate employee pay and taxes. You will be able to simplify your life and reduce mistakes if you use a standard process and payroll software to calculate pay. There are many ways to calculate payroll, and it’s up to you to decide which is best for you. You can use payroll software or even Excel. Keep in mind, manually calculating Ohio payroll taxes could lead to problems. Calculations are complex, so errors are easy to make. Step 7: File payroll taxes with the federal and Ohio state governments. Follow the IRS instructions for federal taxes, including unemployment. Ohio income taxes: Withholdings are filed with the Ohio IT 501. You need to pay online through the Ohio Business Gateway or using electronic funds transfer through the Ohio Treasurer of State. You only need to file for the quarters in which you withheld taxes. How often you must file depends on the combined amount of income and school district taxes withheld in a 12-month period ending June 30. SUTA: For any quarter that you don’t have employees and paid no SUTA, you can file by phone at 1-866-44-UC-TAX. Otherwise, you can file online using The SOURCE, Ohio’s Unemployment Insurance Tax System. Payments are due by the following dates: If the due date for a report or tax payment falls Saturday or Sunday, reports and payments are considered on time if they are received on or before the following business day. Step 8. Document and store your payroll records. As with most business records, you want to keep copies. If you ever need to refer to a pay stub, you want to know where to find it and that you have it. The compliance of your business depends on maintaining records for all employees, including those who have left. Ohio, for instance, requires you to keep records on employees for at least four years. Learn more in our article on retaining payroll records. Step 9. Do year-end payroll tax reports. Send the federal Forms W-2 (for employees) and 1099 (for contractors). You also need to submit the IT3 Transmittal of Wage and Tax Statements, and, of course, any reconciliation of taxes, like the IT 942. Ohio Payroll Laws, Taxes & Regulations As with any state, you should follow the federal law for income taxes, Social Security, Medicare, and Federal Unemployment Tax Act (FUTA) taxes. Please note: You’ll need to withhold 6.2% of each employee’s earnings for Social Security and 1.45% for Medicare; you’ll also pay a matching amount. Income taxes vary and are paid by the employee. Ohio Taxes Ohio taxes are a little more complex than in many states. In addition to the state income tax, there are school district taxes you must calculate withholdings for and reciprocity agreements that affect workers that live in neighboring states. State Income Taxes Ohio charges income tax rates from 0% to 4.79%, with charges starting with income of over $22,151. The Ohio IT 4 determines the number of exemptions. Ohio has several withholding tables depending on whether you want to hold by percentage, weekly, biweekly, etc. You can find these on the Ohio Department of Taxation website. Ohio conforms to federal law concerning compensation and qualifying employees. The following employee types are exempt: Those exempt under federal law such as certain agricultural and domestic workers Individuals earning less than $300 in a calendar quarter Newspaper or shopping news delivery persons who are under 18 Civilian spouses of military members who have the same state of residency, which is not Ohio Ohio has a complex schedule for when withholdings are due. There are also fines for failure to file of $50 or 5% per month, and 10% of the delinquent payment per month for failure to pay. Withholdings withheld but not remitted incur a penalty of 50% of the delinquent payment plus double the interest charged. Reciprocity Agreements Ohio has reciprocity laws with Indiana, Kentucky, Michigan, Pennsylvania, and West Virginia. If you have employees who live there but work in Ohio, they will pay income taxes for their own state. Local Income Taxes Some local school districts have income taxes. If an employee lives in such an area, you must withhold the income taxes for that school district as well. You can find the school district tax rates on the Ohio Department of Taxation website. You can find the 2022 rates on this document, but they change from year to year. Unemployment Insurance Ohio charges SUTA based on a taxable wage base of $9,000. It defines wages as “all money, the value of meals and lodging, or other goods and services provided to an employee as payment for personal services." SUTA rates run from 0.3% to 9.3% for experienced employers. New employers are charged 2.7% unless they are in construction, which is 5.5% (down from 2021’s rate of 5.8%). The state sends you your contribution rates for the following calendar year by Dec. 1. You must pay SUTA in the following circumstances: You employed one or more people in Ohio on any one day within each of the 20 or more calendar weeks of any calendar year Your annual gross wage payroll equals or exceeds $1,500 in a quarter You employed agricultural workers and paid $20,000 or more in cash during any quarter of the current or previous calendar year You are a nonprofit organization exempt from income tax under federal law but employ more than four people at any one day within each of the 20 or more calendar weeks of any calendar year You employed domestic workers and paid $1,000 or more in cash for domestic services in any quarter of the current or preceding calendar year Ultimately, if you have an employer-employee relationship with a person, you need to pay SUTA on them. Workers’ Compensation Insurance You must have workers’ compensation insurance if you have at least one employee. Ohio provides workers’ compensation insurance through the Bureau of Workers’ Compensation. There are multiple plans depending on the type of business and who you are covering, from mine operators to emergency service volunteers. Rates are set by an industrywide classification and the employer’s work experience. It costs $120 to apply, after which, your employees are covered. You may also elect to self-insure. Minimum Wage Laws in Ohio If your company grosses over $342,000 a year, you need to pay Ohio’s minimum wage, $9.30 per hour. If it grosses less than that, you may pay employees at the federal minimum wage, $7.25 per hour. In Ohio, tipped employees must be paid $4.65 per hour plus tips to at least the minimum wage. In addition, employees under 20 can be paid a training wage of $4.65 per hour for the first 90 days of employment, and full-time high school or college students may be paid 85% of the minimum wage for up to 20 hours of work per week at certain employers, such as work-study. The following exemptions apply: Babysitters Certain agricultural employees Outside salesperson Family members Certain employees of motor carrier companies Baseball players in minor leagues under certain conditions Camp employees under certain conditions Ohio Overtime Regulations Overtime rules apply to employers grossing over $150,000 in a year. You need to pay employees at least time-and-a-half overtime pay if they work more than 40 hours in a workweek—and that’s per federal and state law. The following exceptions apply: Agricultural workers Executive, administrative, and professional employees who earn over $107,432 Some developmentally disabled persons, where full wages might impact their ability to be hired Babysitters or live-in companions to a sick, convalescing, or elderly person Camp employees under certain conditions Family members Newspaper delivery persons Outside salespersons Certain motor vehicle operators Different Ways To Pay Employees Ohio does not have any laws concerning the way you pay employees. Keep in mind, however, that 7.1 million people in the US don’t have a bank account, which means direct deposit does not work for them. In these cases, checks or pay cards are good options. Some payroll systems even provide special accounts, like Gusto’s Gusto Wallet. Explore the options in our article on paying employees. Pay Stub Laws Ohio does not have any pay stub laws, but you must keep payroll records for each employee for four years and include: Name, address, and occupation Rate of pay Amount paid each pay period Hours worked each day and workweek If your software does not create pay stubs, you can download one of our free pay stub templates. Minimum Pay Frequency You must pay wages at least twice a month. You can pay on a set schedule, like the first and 15th, on an every-two-weeks schedule, or even weekly or daily. So, for example, all hours worked from the first to the 15th of the month are paid on the first of the following month. All hours worked from the 16th to the end of the month would be paid by the 15th of the following month. There may be some exceptions according to the standard of the trade or profession, but Section 4113.5 of the Ohio State Code does not specify specific exemptions. Paycheck Deduction Rules Ohio does not have any deduction rules, except that deductions cannot take an employee below minimum wage. However, it’s good practice when hiring employees to inform them what deductions you take and note them in the employee handbook. Final Paycheck Laws If an employee is fired or leaves, you need to pay them the final paycheck on the next scheduled payday or within 15 days, whichever is earlier. You cannot withhold the paycheck for any reason, but Ohio makes no rules on whether you need to compensate for untaken paid time off (PTO). Be sure that’s spelled out in your company policy. Ohio HR Laws That Affect Payroll Ohio HR laws are limited, except when it comes to minors. When hiring minors, you need to be concerned with breaks, as well as what jobs and hours they work. Ohio New Hire Reporting You must report new hires to the Ohio Department of Job and Family Services within 20 days of hire. Do this through the New Hire Reporting Center online. Lunch & Other Break Time Requirements Ohio does not have any laws concerning breaks or meal periods for adult employees, nor are there federal mandates for meal breaks. Be sure to outline any company policies in your handbook and share them with employees when hiring. Minors need a 30-minute rest period every five hours. You must keep careful records of start, stop, and rest period times. These records need to be kept for two years. Paid Time Off Ohio has no laws concerning holiday, vacation, or sick time. Federal law does not require you to give paid time off for vacations, but the Family Medical Leave Act requires you to provide up to 12 weeks’ unpaid sick leave for personal illness or caring for a sick member of the employee’s immediate family. Learn more from the Department of Labor sick leave breakdown. Hiring Minors The Ohio child labor laws cover minors under 18. Minors 14-17 require a work permit, and employers should require all minors to have employment certificates. Minors 16 and 17 who are required to attend school cannot work before 7 a.m. on a school day or 6 a.m. otherwise. They cannot work after 11 p.m. on a night preceding a school day. Minors under 16 cannot work during school hours except where permitted by Ohio Revised Code Chapter 4109. They cannot work between 7 a.m. and 7 p.m. except between June 1 and Sept. 1 or when they have a school break of more than five days. In those cases, they may work until 9 p.m. They cannot work more than three hours a day during a school day and 18 hours a week in a school week. However, when school is not in session, they can work eight hours a day and 40 hours a week. Minors are not permitted to work in the following areas: Manufacturing, mining, or processing Work in freezers or meat coolers or in meat preparation except for wrapping and packaging meat for sale Transportation, loading of trucks Warehouse or storage work except clerical Construction or repair Boiler or engine rooms Outside window washing that requires ladders or scaffolding Cooking or baking under certain conditions Vehicle repair that involves pits, racks, or lifting apparatuses Door-to-door sales except under specific conditions The list is more general for those aged 16 and 17 but mostly includes prohibitions against power-driven machinery, from circular saws to bakery machines. Also prohibited are jobs including chemical manufacturing, explosives, and logging. Payroll Forms For the most part, Ohio requires you to file payroll and withholding forms electronically through the Ohio Business Gateway. You’ll pay electronically as well. While you can find these forms online, you need an exemption from the state if you want to file by mail. Ohio State IT 4 Form Ohio’s withholding exemption form is the IT 4. It must be filled out within 10 days of hiring an employee or if the number of exemptions changes. Employees also need to fill out a new one if they change school districts. Other Ohio State Payroll & Tax Forms IT 1 Application for Registration as an Ohio Withholding Agent: While the paper copy exists, it can take up to six weeks to process. It’s best to go to the Ohio Business Gateway and apply there. At the same time, you’ll set up your account to file and pay electronically. IT 501 Employer's Payment of Ohio Tax Withheld: For filing and paying quarterly taxes. Unless you filed for an exemption, you must file this electronically according to the schedule outlined in step 7 above. IT 941 and 942 Income Tax Withheld: These must be filed electronically. Use the IT 942 if you are required to remit quarterly or monthly, and the IT 942 if you must pay partial-weekly. SD 501 Employer’s Payment of School District Income Tax Withheld: Must be filed electronically with your withholdings if you file quarterly or monthly. If you file partial-weekly, then the 942 covers school district withholdings. WT 8655 Withholding Tax Payroll Service Company Authorization and Release: To allow a payroll service to file and pay your tax withholdings. Federal Payroll Forms W-4 Form: To help employers calculate taxes to withhold from employee paychecks W-2 Form: Reporting total annual wages earned (one per employee) W-3 Form: Reports total wages and taxes for all employees Form 940: Reports and calculate unemployment taxes due to the IRS Form 941: Filing quarterly income and FICA taxes withheld from paychecks Form 944: Reporting annual income and FICA taxes withheld from paychecks 1099 Forms: Providing non-employee pay information that helps the IRS collect taxes on contract work Ohio Payroll Tax Resources & Sources Ohio Minimum Wage Poster: Information you can download and post for employees Ohio Department of Taxation Website: Links for forms, tax tables, FAQs, and more concerning income and school district taxes Ohio Bureau of Workers’ Compensation: For learning more about workers’ comp and getting a policy. Ohio Laws & Administrative Rules: Searchable database of the laws, with the exact wordings Ohio Labor Law FAQs: Quick answers to employee questions about wages and pay Ohio Department of Job and Family Services: For information about SUTA, new hires, and more Ohio State Minor Labor Laws: Employer flier on labor laws for people under 18 Bottom Line Ohio does not have rules mandating breaks, time off, or pay deductions. It has a more general definition of employer/employee than other states. In many cases, you can follow federal law. However, income taxes must be paid according to a schedule that’s different from many states, and Ohio requires you to withhold school district taxes. Be sure you understand your obligations so that you don’t incur fines.

Employers are liable for paying their own employment taxes (Social Security, Medicare, and unemployment) in addition to withholding and paying payroll taxes for their employees. All three QuickBooks Payroll plans (Core, Premium, and Elite) make it easy to calculate and pay these taxes. In this tutorial, we discuss how to set up payroll tax in QuickBooks Payroll, followed by how to connect your bank account to easily pay taxes. If you haven’t set your employees up within the system yet, you should do that first. Head over to our QuickBooks Payroll Setup guide for step-by-step instructions. And if you don’t yet have a Payroll account, you can sign up for a free 30-day trial to get started. Once you’re done, come back to this article to get those taxes set up. If you’d prefer to watch a video, here’s a brief run-down of how to set up your QuickBooks payroll taxes: Otherwise, here are the nine steps you’ll want to follow to set up payroll tax payments in QuickBooks. How To Edit or View Payroll Taxes & Forms Now that you know how to set up payroll tax payments, there may be times when you need to make changes to your tax setup or you may just want to look at tax forms that you have previously filed. Click on the Gear icon in the upper right-hand corner of the home page and select “Payroll Settings.” The Payroll Settings will display as indicated below. Let’s discuss in detail what info you can find here. General tax info: Make changes to your company name, filing name, and filing address. Federal tax info: Make changes related to your FEIN, state account number, tax forms you are required to file, and your payment (deposit) schedule. Scroll down and you’ll see other information you can view or edit. Email notifications: If you want tax payment reminders and notifications emailed to you, leave this on the default “Send to You” setting. If not, you can turn it off. Shared data: You can opt to allow employees to import their W-2 tax information into TurboTax, or not. This is a benefit to employees who file their taxes since they won’t have to enter the information themselves. There are also sections for you to change bank account information, direct deposit funding time, paycheck printing options, and designated payroll general ledger accounts. Bottom Line Now that you know how easy it is to set up and make your payroll tax payments using QuickBooks Payroll, you’re ready to run your first payroll! If you haven’t set up your employees, then head over to our QuickBooks payroll guide for step-by-step instructions. You can also head on to the next step in our QuickBooks tutorials, which is How To Add Historical Data to QuickBooks. If you haven’t yet started a Payroll account, you can sign up for a free 30-day trial. You can start paying employees using direct deposit shortly after. And the system will withhold, file, and pay all payroll taxes accordingly. You May Also Like Learn how to process payroll in eight easy steps Find out how to choose the right payroll solution for your small business

It is mandatory for employers to have up-to-date payroll forms regardless of how many employees they have. To maintain good standing with the Internal Revenue Service (IRS), you need the regulated payroll tax forms like W-4 for new hires and W-2 for wage and tax statements. Other less structured forms can also be useful in helping you organize your company’s processes—for instance, direct deposit authorizations. Payroll Tax Forms for Employers Here’s a more in-depth read and look at the payroll forms you may need to operate your business: W-4 Form: Withholding Allowance Certificate Download Form W-4 All employers need updated copies of Form W-4 to distribute to new hires; employees should prioritize completing the form before or on their first day of work. You’ll need the information to determine how much to withhold for taxes from employee paychecks each pay period. The document provides space for employees to enter their personal information: name, address, marital status, and several dependents. Maintaining records of each completed W-4 Form simplifies W-2 Form preparation. W-2 Form: Wage and Tax Statement Download Form W-2 The W-2 Form is essential for all employers; you’ll use it to report the total wages paid to employees throughout the calendar year. Also, you’ll include the total payroll taxes withheld (Social Security, Medicare, and income taxes) and other benefits. You’ll give each employee a copy of their own form no later than Jan. 31 after the year for which you’re reporting. You’ll also be responsible for sending copies of the forms to the Social Security Administration (SSA) and your state, city, or local tax department. Be sure to check that you have six versions of each W-2 Form you distribute (one for each of the following: for your records, for the employee’s records, for the employee to submit with their federal tax return, for the employee to file with their city, state, and/or local tax return, for you to submit to the SSA, and for you to submit to the city, local, and/or state tax department. W-3 Form: Transmittal of Wage & Tax Statements Download W-3 Form The W-3 Form is a summary of all W-2 Forms you are distributing for the year on one document; you’ll submit it to the IRS with copies of each W-2 Form. You’ll report the total salary and wage payments you made to all employees in addition to the total taxes and other benefit information. To check that all of the numbers you report on the W-3 flow, compare the totals to the information reflected on the other payroll forms. For example, add all individual salary and wage totals reported on the W-2 Forms, and the sum should equal the total wage amount reflecting on your W-3 Form. Form 940: Federal Unemployment Tax Reporting Download Form 940 You should submit Form 940 when you pay your federal unemployment tax bill throughout the year. If you paid federal unemployment taxes (FUTA) during the year (most employers are required to), you’ll need to submit Form 940 by Jan. 31 of the following year. It helps you calculate and report the total FUTA taxes for which you’re liable, net of any payments made during the year. The IRS requires you to report and pay the tax quarterly if you’ll owe more than $500 for the year; if you pay your FUTA taxes each quarter and are up-to-date by year-end, you can wait until Feb. 10 of the following year (at the latest) to file. Generally, you’re subject to the tax if your business: Paid or will pay over $1,500 to its employees in a calendar quarter Employed one or more employees for at least 20 weeks of the year Be mindful that you will likely also owe a state unemployment tax and subsequently need to report the total due on a specific payroll form for your state. Check your state tax agency’s website to be sure. Form 941: Quarterly Federal Tax Return Download Form 941 Submit this form with your quarterly federal income tax payments. If you withhold income tax, Social Security, and Medicare (FICA) payments from your employees’ paychecks, you should submit Form 941 (or Form 944 if the payments are small). You’ll report the total amounts withheld. It will also help you verify and pay the amount of FICA taxes for which your business is responsible (the total matches what you should withhold from employee checks, ultimately around 15.3% of wages paid). The deadlines are at the end of the following months: January (for October through December), April (for January through March), July (for April through June), and October (for July through September). Form 944: Employer’s Annual Federal Tax Return Download Form 944 Submit this form with your annual federal income tax payments; this is usually for really small companies. Tax Form 944 fulfills the same purpose as Form 941 but is used less frequently. Only small businesses with an annual tax liability of less than $1,000 are eligible to file this form; it’s a report of the total income and FICA taxes withheld and payable (employees’ and employer’s share) throughout the year and is for employers who are eligible to make one payment annually (versus four quarterly payments). Form 8027: Annual Information Return of Tip Income Download Form 8027 Form 8027 shows how reasonable your employees’ reported tip amounts are; you may be responsible for distributing more money if the total doesn’t meet IRS guidelines. Not all employers will use Form 8027—only large companies with workers who routinely receive tips (restaurants, bars, and companies in the hospitality industry). For purposes of this form, the IRS defines “large companies” as companies that have more than 10 employees working on a typical business day. The main purpose of this form is to report the total tip income received within the establishment and to calculate allocated tip amounts (a component of some restaurant payroll processes) that employers are responsible for paying tipped employees. Allocated tips are additional amounts some employers are required to pay out if their total reported tips appear to be too low according to the size of the business. Form 8027 helps to calculate any additional amounts due. The deadline to file a paper copy of the form is Feb. 28 and March 31 if you file electronically. Schedule H (Form 1040) Download Schedule H (Form 1040) Schedule H (Form 1040) helps ensure your household employees pay the appropriate amount of payroll taxes. You use Schedule H if you are paying cash wages to household employees such as nannies, caregivers, or babysitters. You’ll need to report the total wages paid along with taxes due (FICA, FUTA; the form has clear directions to help you calculate the amounts owed, so you don’t have to research it on your own.) Form WH-347: Certified Payroll Download Form WH-347 This is a federal form contractors can use to meet their certified payroll reporting requirements; however, some states are stricter and have their own forms. Be sure to check yours. The Certified Payroll Form is a document for employers who work on federal projects. To ensure the agency funding the project continues to pay, you have to fill it out with details about every worker involved in the project, like name, hours worked, project name, wages earned, benefits paid, and so on. It’s important to submit an updated copy to the agency weekly. Other Payroll-related Forms for Employers Employer and employee tax forms are the most pressing payroll documents for many companies. However, there are others (some specifically payroll and some not) of which employers should be aware. For instance, HR and payroll go hand in hand, meaning you can’t or shouldn’t process payroll without filing some key HR forms. Also, completing the proper contractor forms can save your company time and money. Employer Contractor Forms There’s a significant difference between employees and contractors in the sense that contractors have much more autonomy because employers cannot legally control how they perform their work. There’s also a difference in how you should report the money you pay them. W-2, W-3, and W-4 Forms are not applicable to contractors. W-9 and 1099 Forms are more appropriate. Here’s a list of forms you need when paying contractors: W-9 Form: The W-9 is the W-4 for contractors. You should distribute a copy to each contractor you hire before they begin working. It will collect information like the employee’s name and Social Security number). You’ll use it to report to the IRS how much you paid out during the year (on Form 1099). 1099-NEC Form: Similar to a W-2 (except it’s only for contractors that were paid at least $600 and doesn’t list any taxes paid), this form should report the total income paid to contractors. You should submit one to each contractor and send a copy to the IRS. 1096 Form: It is a summary of all 1099 forms you distribute. It should reflect the grand total paid to all contractors and tie directly to each 1099 you’re distributing. Non-tax Payroll Forms There are numerous non-tax-related payroll forms you can use to help manage your internal processes better. Since these are not regulated, you can create them on your own or download a free online payroll template. Here are three of the most common non-tax payroll forms you should consider using: Direct Deposit Authorization Form: Issued to employees wanting to receive their paychecks electronically vs by paper check; the form shows you have permission to pay them via direct deposit and usually includes space for a routing and account number. Time Sheet: A document employees can use to record the hours they work each period; you can use it to verify work time before issuing paychecks. Pay Stub: A document you can issue with each paycheck that shows a breakdown of total earnings and deductions.. Some states require you to issue them (and dictate what information to include), and others don’t. In addition to payroll forms, many employers require HR forms for new employees, including Form I-9 (used to verify work eligibility), Employer Identification Number (EIN) Form (used to request a state-issued number for reporting and paying taxes), and so on. These aren’t payroll forms per se (although often confused as such) but are required before processing any paychecks. Why Payroll Forms Are Important Payroll forms help employers record, summarize, and report paycheck and payroll tax information. It’s best to integrate them into your company processes so they’re completed at the right time. You can face penalties for not submitting the proper documents to the appropriate agencies by their deadlines. Most employer payroll tax reports are filed quarterly while others are submitted annually. For your in-house forms, you can set your deadlines according to how you need to use the information (e.g., you can have employees submit timesheets weekly or biweekly, depending on your pay cycle). Many forms are tax-related, subject to IRS regulations, and only reflect employee information (not contractors’); other forms are more flexible, and you can produce them in-house (direct deposit, time sheets, and so on). Forms like 1099s help organize payments made to contractors, although they’re usually considered vendor payments rather than payroll. One of the first steps to learning how to do payroll successfully is to gather (and in some cases, create) the payroll forms that apply to your business. Payroll software services can also provide some guidance and resources. Bottom Line Payroll forms are a necessity for your business. As a small business owner, it is best to start downloading the IRS forms applicable to your business. There are other less-urgent forms you can customize for internal use, but you can integrate those into your processes later. Other articles you may be interested in … Form W9 vs 1099 Form W2 vs W4 1099 Contractors vs W2 Employees