Regardless of how many employees you have, payroll forms are a necessity. Most employers need the regulated payroll tax forms required to maintain good standing with the IRS, like W-4 forms for new hires. Other, less structured forms can also be useful in helping to better organize your company’s processes—for instance, direct deposit authorizations.
Payroll Tax Forms for Employers
Payroll Tax Forms
What is This Form Used For?
To help employers calculate taxes to withhold from employee paychecks
Reporting total annual wages earned (one per employee)
Reports total wages and taxes for all employees
Reports and calculate unemployment taxes due to the IRS
Filing quarterly income & FICA taxes withheld from paychecks
Reporting annual income & FICA taxes withheld from paychecks
To report tips received & determining allocated tips
Reporting employment taxes on cash wages paid to household employees (nannies, caregivers)
Filing payroll information re: employees who work on federal projects
Providing non-employee pay information that helps the IRS collect taxes on contract work
Why Payroll Forms Are Important
Payroll forms are important because they 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. One of the first steps to learning how to do payroll successfully is to gather (and in some cases, create) the payroll forms that are applicable to your business. Payroll software services can also provide some guidance and resources.
Payroll Forms Explained
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.
Any form you’re required to submit to the IRS carries its own deadline(s). You must submit some reports quarterly (most employer payroll tax reports), and others are on an annual cadence. If you create any in-house forms, you can set your own deadlines according to how you need to use the information (you can have employees submit time sheets weekly, biweekly, etc., depending on your pay cycle).
As an alternative to creating your own forms, you can use pre-made forms from payroll software like Gusto if you become a user or electronic time sheets from When I Work, a time and scheduling tool. Both of these software offer free trials.
Here’s more background on the payroll forms you may need to operate your business:
W-4 Form: Withholding Allowance Certificate
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, like name, address, marital status, and number of dependents. Maintaining records of each completed W-4 Form simplifies W-2 Form preparation.
W-2 Form: Wage and Tax Statement
The W-2 Form is essential for all employers; you’ll use it to report the total wages paid to employees throughout the year. In addition, 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: your records, 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
If you issue W-2 Forms, you will need to complete a W-3 Form and submit it to the SSA with applicable W-2 copies. It’s essentially a summary of all the individual W-2 Forms you are distributing for the year. 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 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 grand total wage amount reflecting on your W-3 Form.
Form 940: Federal Unemployment Tax Reporting
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
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
Tax Form 944 fulfills the same purpose as Form 941 but is used less frequently. Only small businesses with an annual tax liability 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
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 appears 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 March 2 (for 2020) and March 31 if you file electronically.
You should only 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
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 on a weekly basis.
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 others not so much) 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 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: The 1096 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, deductions, etc. Some states require you to issue them (and dictate what information to include), and others don’t.
In addition to payroll forms, many employers are in need of 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.
Frequently Asked Questions (FAQs) About Payroll Forms
In this article, we discussed the different types of payroll forms. However, we realize you may have more questions, and we address them here.
Where can I find the payroll forms I need?
There are different types of payroll forms. Some are more official, specifically the tax documents (W-4 and W-2 Forms, for instance). You can download many of these documents from the IRS website; they can change every year though, so it’s important that you use the most updated copy. Other payroll forms, typically the ones you use in-house, are less structured; you can create them on your own or download free templates from the web.
What forms are needed for payroll?
You can use numerous payroll forms within your business, but the most important ones are those required by the IRS. Employee tax forms like Form W-2, Form W-4, and Form W-3 are essential. Form 940, 941, and for some, 944 are also important to ensuring payroll taxes are paid correctly and on time. If you operate a restaurant or bar and your employees accept tips, you may also need Form 8027. Schedule H is for Household employees, and Form WH347 is for federal contractors.
What payroll forms do employers need for new employees?
When it comes to new employees, you need Form W-4 to collect information about them that you can use to calculate their paycheck withholdings. A direct deposit authorization form is also important if you’ll be paying them electronically. Other forms, like Form I-9, are also important for new hires, but they are considered HR forms.
There are many payroll forms your business can benefit from using. However, if you just want to start with the ones you’re legally responsible for, focus on 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.