13 Payroll Forms Employers Need

If you’re starting a business and hiring employees, welcome to the wonderful world of payroll! 

Payroll is a complex process that involves loads of calculations and paperwork. From a wage report and withholding tax to a payroll form and form 1099 nec, you’ll need to gather a lot of different forms.

But you’ve come to the right place, as this detailed guide will explain which forms you need – and why.

1. W-4: Withholding Allowance Certificate

When you hire new employees, they need to fill out a Form W-4. The W-4 specifies the employee’s filing status, dependents, and additional withholding requests. This is information you’ll need to know how much in federal taxes to withhold from the employee’s paycheck.

The form must be retained in the employer’s records.

2. I-9: Employment Eligibility Status

Form I-9 is filled out by both the employee and the employer. It verifies the identity and employment authorization of the person being hired. The employee must also present his or her employer with official documents showing identity and employment authorization. 

The form must be retained in the employer’s records.

3. W-9: Request for Taxpayer Identification Number and Certification

Form W-9 is like the W-4 for employees, but is filled out by contractors. It verifies and certifies their taxpayer identification number, which you will use to issue their Form 1099-NEC. 

4. Direct Deposit Authorization Form

If you’re going to offer direct deposit to pay your employees, you’ll need to collect their bank routing numbers and account numbers and get their authorization to make direct deposits to their accounts. Your bank may have a form that they can provide for your employees to fill out.

5. W-2: Wage and Tax Statement

Form W-2 is used to report all wages paid to each employee, taxes withheld, and benefits information. You must give your employees copies of the form by January 31^st of the year following the tax year, and you’ll also submit copies to the Social Security Administration and to state and local tax authorities. 

6. 1099-NEC: Non-Employee Compensation

Form 1099-NEC is like the W-2 for employees, but issued to contractors you hire. It reports the amount paid to a contractor throughout the year if that total is more than $600. 

7. W-3: Transmittal of Wage and Tax Statements

Form W-3 is a summary of all the W-2s you issue and is submitted to the IRS with copies of all your W-2s. It includes a total of all the wages and salaries paid to your employees, and the total taxes withheld. Essentially it contains all the information you entered on each W-2, with combined totals for all employees.

8. Form 940: Federal Unemployment Tax Reporting

When you pay your federal unemployment taxes (FUTA) that were not paid throughout the year, you’ll submit Form 940. It must be submitted by January 31^st of the year following the year for which you’re paying taxes. 

You’ll likely pay your FUTA taxes quarterly, and any remaining balance will be paid with Form 940. FUTA taxes are owed quarterly if you owe more than $500 for the year. You’re subject to FUTA if you pay employees more than $1,500 in a calendar quarter and if you employ at least one employee for 20 weeks of the year. 

You may also owe state unemployment tax, so check with your state for form requirements.

9. Form 941: Quarterly Federal Tax Return

You’re required to pay your federal payroll and income taxes withheld each quarter using Form 941. You also use Form 941 to pay the payroll taxes you owe, like your Social Security tax and Medicare tax.

Due dates are the last day of the month following the quarter for which you’re filing. 

10. Form 944: Employer’s Annual Federal Tax Return

Form 944 is only used if you owe less than $1,000 in federal taxes in a year. If you’re below that threshold, you won’t need to make quarterly payments. You’ll instead use Form 944 to report and pay the total income, Social Security tax, and Medicare tax withheld. The form is due by January 31^st of the year following the tax year.

11. Form 8027: Annual Information Return of Tip Income

Form 8027 is only required for larger companies, defined as having more than 10 employees working on a typical day, and those that have employees who receive tips. The form shows the total amount of tips received, which is used to calculate additional amounts that need to be allocated to employees. 

This occurs when the amount of tips received is considered too low based on the size of the business. In these cases, the employer is required to pay additional amounts to the employees. 

The form is due February 28^th if you file a paper form, or March 31^st if you file electronically.

12. Schedule H of Form 1040: Household Employment Expenses

Schedule H is only used by employers paying cash wages to household employees. You’ll report the total wages paid and the FICA and FUTA taxes owed. You’ll also use Schedule H if you withheld federal income tax from the wages paid. 

13. Form WH-347: Certified Payroll

Any firm contracted to work on a federally funded project is required to submit a weekly certified payroll report using Form WH-347, detailing the number of workers on the project and their compensation. 

Under the Davis-Bacon Act, contracts of more than $2,000 for projects for the federal government or the District of Columbia that involve public works or construction must contain a clause setting forth the minimum wages to be paid to any laborers and mechanics involved in the work.

State-funded public works projects generally have similar certified payroll requirements, so you’ll need to learn and follow your state’s procedures.

Using a Payroll Service

That’s a lot of forms! As you can see, processing payroll and collecting and paying payroll taxes and income taxes can be quite complex, so you might want to consider using a payroll service. It’s likely to be less expensive than creating a new staff position for managing payroll. 

Payroll and payroll taxes come with countless laws and restrictions, and a payroll service can ensure your business remains in compliance at the federal, state, and local levels. You’ll just send over your digital timesheets and relevant information and the service provider will take care of the calculations, payments and taxes, freeing you up to focus on growing your business. 

We highly recommend hiring a payroll service — as a busy entrepreneur, you won’t regret it!