What is a payroll report?
A payroll report is what you will use to provide the government your employees’ tax liabilities. Payroll reports come in a variety of forms that all share different taxes you and your employees pay. These reports can range from employee time worked, wages paid, federal and state taxes withheld, and other information or data. Because payroll reports can quickly become complicated and doing it wrong has financial and legal consequences, many businesses choose to use payroll software or a payroll team to help.
What types of payroll reports are there?
There are necessary reports every employer is required to submit to the government or employee, and then every report varies in its timing; some are every quarter, while others are yearly. But aside from required reports, other payroll reports are just useful payroll reports.
5 reports that your business should be using
There are hundreds of payroll reports but for employer taxes, these five are necessary for each company to understand and file.
1. State reports
Depending on the state you live in, the combination of your federal, state, and local taxes will look different. Each state’s payroll report has its own tax rates, and may even have different deadlines- for many states, it's quarterly payroll reports. The main considerations for each state are their state income and state unemployment tax. States require different reporting and contributions depending on your business and the tax rates in any given pay period. Your state information can be found on the state’s department of labor and revenue websites.
2. Form 941
Form 941 is the necessary form for employers to report income taxes, Social Security and Medicare taxes withheld from employees pay, and pay employer’s portion at the end of a quarter. Social Security tax, Medicare tax, and income tax can all vary by the rate that year or the employee wage. Thus, every year you will want to look at the social security and medicare rate and calculate income rate. Be sure to check out specifically how your Form 941 is impacted in 2021- depending on your business you may qualify for employee retention credit, sick employees/employees on family leave, or tax credits if you were impacted by a natural disaster. There are also certain credits for small businesses with research, veteran employees, etc. Understanding what exemptions you qualify for with Form 941 will help you pay the right amount.
Here is a quick summary of what should be included in your Form 941
- Wages you’ve paid.
- Tips your employees reported to you.
- Federal income tax you withheld.
- Both the employer and the employee share Social Security and Medicare taxes.
- Additional Medicare tax withheld from employees.
- Current quarter's adjustments to Social Security and Medicare taxes for fractions of cents, sick pay, tips, and group-term life insurance.
- Qualified small business payroll tax credit for increasing research activities.
- Credit for qualified sick and family leave wages.
- Employee retention credit.
- Total advances received from filing Form(s) 7200 for the quarter.
When you are ready to pay and submit your Form 941, you can do so online. This is a quarterly payroll report.
3. Form 944
Form 944 is a form for small employers, which the IRS defines as employers that’s an annual liability for Social Security, Medicare, and withheld federal income taxes is $1,000 or less. Typically the IRS will notify you to file a Form 944 instead of Form 941. If you receive Form 944 you don’t need to file form 941, and you will pay annually instead of at the end of a quarter.
4. Form 940
Form 940 is the payroll report for the Federal Unemployment Tax Act (FUTA). Most employers pay both federal unemployment tax and state unemployment tax, however, FUTA is not taken from employee wages. FUTA is just paid by the employer on a quarterly or annual basis and Form 940 is an annual payroll report.
You should file Form 940 if:
- You paid wages of $1,500 or more to employees in any calendar quarter during 2019 or 2020.
- You have one or more employees for at least some part of a day in any 20 or more different weeks in 2019 or 20 or more different weeks in 2020 (you count all full-time, part-time, and temporary employees, but don’t count partners).
5.Form W-4 & W-2
Both W-4 and W-2 are payroll reports that employers must file for employees, and are part of employer’s payroll reports.
Form W-4 is the form employees fill out so you, as the employer, can deduct the correct amount of taxes. The IRS recommends having employees fill this out every year so you can accurately track changes in financial situations and withholdings.
Form W-2 is a wage and tax statement and the report you will file with the IRS for every employee in which:
- Income, Social Security, or Medicare tax was withheld.
- Income tax would have been withheld if the employee had claimed no more than one withholding allowance or had not claimed exemption from withholding on Form W-4, Employee's Withholding Allowance Certificate.
The due date to file your W-2 is annual, at the end of January. You may owe a penalty fee if you file a W-2 late.
Frequently asked questions
How do I know what reports I should be using?
The following 5 payroll reports are a good start for what you should be using, however, every business is slightly different (employer vs. contract, what state you're located in, etc.) and you’ll want to discover any additional required payroll reports. Additionally, some payroll reports may not be required, but could be helpful to your organization, or save your team money or time.
We do the research and reporting for you, with over 900 payroll report options, we know what works best for each business, and deadlines for payroll reports, and tax payments.
Interested in finding what payroll reports your business needs? We can help.
How often should I file reports?
Taxes are typically filed either quarterly or annually. State taxes are often quarterly but check with your state to be sure. Form 941 is a quarterly report. While Forms 940, 944, and W-2 are annual reports.
What reports should I file as a small business?
Super small businesses might qualify for payroll Form 944 instead of payroll Form 941, but the IRS will let you know which one is right to file. Depending on your business model and the ways you employ, your payroll filing will look different.
Learn more about the payroll reports and get more data for your small business.
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