Managing Payroll

Payroll Records

An employer, regardless of the number of employees, must maintain all records pertaining to payroll taxes (income tax withholding, Social Security, and federal unemployment tax). There are several different kinds of employment records that must be maintained to satisfy federal requirements. These records are summarized below:

Income-Tax-Withholding Records

v Name, address, and Social Security number of each employee

v Amount and date of each payment of compensation

v Amount of wages subject to withholding in each payment

v Amount of withholding tax collected from each payment

v Reason that the taxable amount is less than the total payment

v Statement relating to employees’ non-resident alien status

v Market value and date of non-cash compensation

v Information about payments made under sick-pay plans

v Withholding exemption certificates

v Agreements regarding the voluntary withholding of extra cash

v Dates and payments to employees for non-business services

v Statements of tips received by employees

v Requests for different computation of withholding taxes

v Social Security (FICA) Tax Records

v Amount of each payment subject to FICA tax

v Amount and date of FICA tax collected from each payment

v Explanation for the difference, if any

v Unemployment and Disability Records

v Total amount paid during calendar year

v Amount subject to unemployment tax

v Amount of contributions paid into the state unemployment fund

v Any other information requested on the unemployment tax return

v State disability contributions