Information typically included on payroll forms include direct deposits, bonuses, holiday pay or sick pay. Any withheld funds are noted, such as for state and federal taxes, Medicare and Social Security payments. Pay deductions and paycheck distribution dates are also included. This information is typically produced quarterly but can be drawn upon at any time the company needs.
Payroll forms are used to help a business easily and accurately pay taxes for each of its employees. They are most commonly used to fill out the Employer's Quarterly Federal Tax Return, or IRS Form 941. They are also helpful when working with contractors, as they keep an accurate record of performance.
Incorrect payroll forms can lead to unreported or unpaid employment taxes. These actions have consequences, including a 2 to 10 percent federal fine taken directly from the business. State and local penalties also exist, differing depending on location. The most scrutinized portion of the payroll form is Social Security reporting. If reporting is deemed fraudulent, both the employer and the employee involved can be fined the total amount of back Social Security owed. This standard is applicable to all industries and business sizes.
Payroll forms can be completed manually by a payroll department or with the aid of payroll software. There are also payroll service companies that handle a business's payroll information off-site or provide technical support while a company begins taking on the task of payroll on their own.