Small business owners and managers spend, on average, 40% of their time on tasks not related to profits. Handling employee payroll takes up a big part of this time.
It’s especially time-consuming when you have an employee who hasn’t completed their proper form for payment. This can happen for any number of reasons, but it makes your job of handling their payroll more tricky.
You know you don’t want the IRS after you because of an error.
So, what do you do when you need to pay an employee for their work, and they haven’t completed their correct forms? These new hire forms provide the information you need to correctly handle the payroll, including tax deductions.
What New Hire Forms Should an Employee Complete?
The task of employee onboarding new hires means gathering necessary information from the employee for payroll and tax time.
The most important of these forms is the I-9 form. This form works to identify and authorize the employment of a new hire. An employer must complete an I-9 form for each new employee they hire.
The W-4 form is also required by the IRS for employees. This is a relatively straightforward form available on the IRS website.
Employees fill out the five sections, and it provides the employer with the information needed to calculate pay, withholdings, and deductions.
Step One of this form is the personal information of the employee. One of the most important parts of this is the employee’s Social Security number. As the employer, you need their Social Security number because it’s how the IRS identifies and tracks information on this person.
The employee will also designate how they plan to file their taxes: Single or Married filing separately, Married filing jointly; or Qualifying widow(er) Head of Household.
Steps Two through Step Four: Guide the employee through the number of withholdings and deductions. This information is key to an employer who is calculating pay because it tells them how much to take out in taxes and send on to the IRS.
Step Five: The employee verifies the W-4 form by signing and dating it.
In today’s tech-driven world, many employers will also ask an employee to complete direct deposit information for payroll streamlining.
How to Pay an Employee Without the Correct Forms
There are a number of reasons why an employee might not have given you the new hire forms, like the I-9 and W-4 forms. Of course, you’re obligated to get them their pay, whether you have those forms or not.
Both the Internal Revenue Service and the Employment Development Department offer guidance on what an employer should do.
You should treat the employee as if they are filing single with no withholding allowances. This means they won’t get any allowances for fewer deductions made to the IRS.
If the employee is nonresident alien status, the rules are different. You want to contact your tax adviser about the best way to proceed in this situation. Factors like how long they’ve been in the US and how you’ve employed them will impact how to proceed.
Using Payroll Services to Make Payroll Easier
One way you can avoid these types of hassles is to hand over your payroll management to a payroll service.
It frees up your time as a business owner to do things that make you a profit. It also allows someone who specializes in payroll to manage your services.
The payroll service ensures your employees get paid while carefully calculating deductions and taxes.
Handling Your Payroll Demands With Ease
When an employee fails to complete their new hire forms, you can still get them paid following the recommendation of the IRS.
If you want or need to free up your time, let us help you handle your payroll demands. Contact us today to learn more about how we can help you.