Four Payroll Tax Must Haves for Startup Companies
Becoming an employer means you’re now responsible for reporting and paying taxes on federal, state and local levels. If you don’t get up to speed starting with your very first hire, you might start receiving notices that result in penalties and interest payments.
experts in BenefitMall’s tax, sales and new account setup departments collaborated
to provide four payroll tax musts new employers should know.
One: Payroll tax forms
you can begin paying your employees, you must complete required forms.
- Form I-9, Employment Eligibility Verification, is issued by the U.S. Citizenship and Immigration Services and documents that each employee is authorized to work in the United States. Employers are required to complete the form on or prior to each employee’s date of hire and retain a completed I-9 for each employee (kept separate from the employee’s personnel records) and available for
- Verify all Social Security Numbers (SSN) to ensure employment eligibility and avoid penalties for SSN mismatches on tax filings. E-Verify,
a free online SSN verification service, has been developed by the
Department of Homeland Security for use by employers.
- Form W-4 should be completed by each employee annually to determine the
appropriate amount of federal income tax withheld from wages. In a state with state income taxes, employees will also complete the state W-4.
Two: Federal taxes
payroll taxes are filed and deposited with the Internal Revenue Service and include
federal income tax, Social Security tax, Medicare tax and federal unemployment
Publication 15, Employer’s
Tax Guide, is a great resource for keeping up with filing and payment
Three: State taxes
states have a state income tax, a tax withheld from employees’ wages and paid
to the appropriate state agency. Employers are also responsible for paying
employer-only state taxes.
states that have income tax withholding requirements, you need to register as
an employer and receive an identification number that will be used to report state
income tax withheld on behalf of your employees.
also need to register to pay unemployment taxes. In some states, that will
occur when you register to withhold taxes, but in other states you may need to
register separately. Once registered, you will receive an identification number
and a contribution rate that you will use to report quarterly taxable earnings
and pay unemployment taxes.
list of links to
state websites can be found on the IRS and the American
Payroll Association websites.
Four: Local taxes
are a number of states with local income taxes. Employers in these states are
required to register with the appropriate local agencies, withhold taxes from
employee wages and/or pay employer portions of the taxes and file and pay the
taxes to the taxing authority.
American Payroll Association website has a helpful listing of links to local tax
Is your payroll tax resource – for additional information, Complete our payroll quote request or
call (800) 362-9519 to speak with a BenefitMall representative.