A W-4 Form, or Employee’s Withholding Certificate, gives you the information you need to determine how much money to withhold from your employees’ paychecks each pay period to pay their income taxes. Employees must fill it out properly and submit it to you before their first payday to avoid a big tax bill and penalties in April. There are five parts, and it shouldn’t take more than a few minutes to complete.
Employees, especially first-time workers, may have questions about completing their W-4. You can assist them and answer questions, but cannot tell them how to answer individual questions or sections on the W-4 or complete the form for them. For these specific cases, you’ll need to refer them to someone outside your company, like an accountant or tax advisor.
If you’d prefer to not have to collect and file W-4 forms for all of your employees manually, consider using a full-service payroll software like Gusto. Its self-service employee onboarding platform will prompt your employees to fill out a digital version of the W-4 form and will file it for you automatically. Try it today and get one month free when you run your first payroll. Offer will be applied to your Gusto invoice(s) while all applicable terms and conditions are met or fulfilled.
Did you know?
In 2020, the IRS modified the W-4 Form to simplify it and make it more accurate. Most employees now only need to fill out Steps 1 and 5. 2023 saw minor updates to the form:
- There’s no longer any reference to a tax withholding estimator
- Step 2(c) clarifies who should check the box for having two jobs
- The deductions worksheet has updated amounts
How Form W-4 Works
New hires should complete the W-4 form and submit it to you as soon as possible after they begin working, as you need time to process it before you start doing payroll. You’ll use the information they enter (i.e., marital status, dependents, etc.) to cross-reference the IRS withholding table so you know how much money to deduct from their paychecks. You’ll eventually report the tax withholding on their year-end W-2 form.
The Tax Cuts and Jobs Act drastically changed the W-4 form in 2020. You should no longer use any old forms, and it’s good practice to use the most up-to-date W-4 when having new workers complete the form. You don’t have to get existing employees to update their pre-2020 W-4 unless their situation has changed, like if they got married or had a child.
Note: You cannot accept a W-4 Form by email or fill it out for an employee. They must sign it in person. You can receive it in print or through electronic systems that comply with IRS regulations.
If you want to learn about more forms employers are responsible for filling out or collecting, check out our payroll forms article.
State W-4 Forms—Interactive Map
New Mexico, North Dakota, and Utah use the federal form. Other states have their own form instead of or in addition to the federal one. Click on the map below to see your state’s requirements, as well as how to run payroll compliantly.