Payroll forms — also known as payroll reports — are a means of accruing and organizing accounting information about a business' employees. These reports typically include comprehensive details of payroll transactions by quarter, but may be generated for longer or shorter time periods depending on the needs of the company.
Payroll Form Content
Pertinent information included in Payroll Forms may include such data as paycheck distribution, direct deposits, bonuses paid, deductions or withholdings, holiday or sick-leave pay. Withholdings from employee payments may include employer taxes and deposits to Social Security and Medicare. These figures will typically be broken down by employee, and include overall figures showing a company's transactions over time.
Payroll Forms and Taxes
All employers must pay taxes for each person they employ, and report this information to the Internal Revenue Service. Payroll forms are specifically useful in the filing of IRS Form 941, the Employer's Quarterly Federal Tax Return. Comprehensive reports ensure timely and accurate filing for a business. These forms also find use in contractor situations, helping to guarantee correct accounting of project performance.
Penalties for Incorrect Forms
Failure to correctly report and/or pay employment taxes can result in severe penalties for a small business.
At the federal level, a fine of two to ten percent may be automatically levied, with further penalties accruing at the state and local levels. The IRS harshly penalizes incorrect or fraudulent Social Security reports. They may fine both the company and any individual involved in the specific accounting for Social Security payments up to one hundred percent of the amount owed. These penalties apply to businesses of all sizes, in every industry.
Payroll Form Production
Companies that do not have a dedicated accounting department frequently make use of payroll processing software to quickly and coherently compile, sort, store, and generate payroll information. Payroll service providers are also available online to assist smaller businesses, though care must always be taken with the distribution and protection of payroll information on the Internet. Many payroll service companies offer extensive phone and e-mail support, which could be of great use to a startup concern.