Summary
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Payroll reports are documents that provide companies with insights into their payroll activities and tax liabilities.
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While payroll reports are usually created for internal purposes, there are some mandatory tax and payroll-related forms that businesses need to submit to government agencies on a regular basis.
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You can improve payroll reports by utilizing a dedicated payroll software and time and attendance system that generates higher-quality wage and hour data.
Every month, companies run payroll to pay all of their employees’ wages. This process requires the collection of data, such as hours worked from timesheets, gross pay, net pay, tax withholdings, and so on. This information provides insight into the inner workings of a company and can be used to populate different types of payroll reports.
Payroll reports are documents created by human resources teams to keep tabs on employee payroll data and a company’s tax liabilities. Depending on the type of payroll report used, these documents usually include information like pay rates, the number of hours worked, overtime logs, any withheld taxes, employer tax contributions, and the amount of paid time off (PTO) taken.
The importance of payroll reports
From small businesses to larger corporations, keeping track of payroll records is important for maintaining a good relationship with your employees, keeping your business running smoothly, and remaining compliant with tax regulations.
Payroll reports are great for:
- Improving employee retention – Payroll reports include information on employee turnover. Monitoring employee churn could help uncover some issues that are standing in the way of your employee engagement. If you are losing more staff from a particular department, you might want to take a closer look to see what might be standing in the way of higher employee retention.
- Using data for employee recognition purposes – Payroll software can track milestones, such as when someone is due for a review, a bonus, or a pay increase. Ensuring that such milestones are recognized and rewarded goes a long way toward increasing employee engagement.
- Maintaining healthy cash flow – Because timesheets and payroll are housed in the same system, your reports include hours worked, overtime consumed, PTO, and sick days taken. Tracking hours worked helps you avoid underpaying or overpaying your staff, ensuring well-budgeted labor costs.
- Managing taxes – Employers and business owners are responsible for paying company taxes as well as managing employee tax withholdings. Payroll reports help keep data better organized and ready for tax submissions and audits from the IRS.
Types of payroll reports
Payroll reports differ depending on the information you want to collect, your payroll provider, and any customizations you make to the reports. Some of the most common types of payroll reports are:
Payroll summary report
These reports contain payroll information about any individual employee, a department, or the company as a whole in a given date range or pay period. They include information such as net and gross wages, tax withholdings, and FICA tax deductions.
Payroll detail report
As the name suggests, this is a detailed report on a specific employee or department or the company’s pay history. The report shows every movement and activity separately.
Employee summary report
Also known as a pay stub report – this document contains an employee’s personal, pay, and tax information. Your employees should have access to all of their own summary reports.
Payroll tax liability report
These reports show all tax withholdings per employee, the amounts your company has paid to government agencies, and any pending amounts still owed to the government.
Retirement contributions
These documents show all payments you have made to employee retirement plans. Such retirement plans include 401(k) and 403(b).
Paid time off (PTO) report
This report provides employers with an overview of all PTO an employee has taken within a calendar year and how much time off they have left.
Mandatory government forms employers need to file
Payroll reports are internal documents and are rarely, if ever, submitted to external parties. An exception would be if a company is undergoing an audit by the IRS or a state entity or if a workers’ compensation claim is involved.
There are, however, other kinds of forms employers must submit on a regular basis to local, state, and federal governments. Much of the information needed for these forms can be found in your internal payroll reports, saving you a lot of admin time.
Some of the most common government tax reports and forms include:
- Form 941 – An employer’s quarterly federal tax return that is used to report on federal payroll taxes and includes information like:
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- Employees’ wages
- Federal income tax withheld
- Medicare taxes and Social Security tax deductions
- Employer contributions to Medicare and Social Security taxes
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- Form 940 – This is in relation to the annual federal unemployment tax return (FUTA tax). The FUTA tax is an amount that companies pay to contribute toward “unemployment compensation to workers who have lost their jobs.” The amount could be as much as 6% of the first $7,000 paid to every employee.
- Form 944 – This form is for small employers whose annual liability for social security, Medicare, and withheld federal income taxes is $1,000 or less. It is filed only once a year instead of every quarter.
- Form W-2 – A wage and tax statement that employees use to present total gross wage, tax deductions, and benefits. Employers must provide their employees with a copy of this form and present copies to federal, state, and local governments.
- Form W-3 – This form is how businesses submit a summary of their wage and tax statements to the Social Security Administration. It accompanies Form W-2. Both are due by January 31 of the following tax year.
- Certified payroll report – This is a government-mandated report for contractors and subcontractors working on federally funded construction projects. Under the Davis-Bacon Act, certified payroll reports must be submitted to the contracting agency, typically using Form WH-347 provided by the U.S. Department of Labor.
- State payroll reports – These vary from state to state, particularly when it comes to the frequency of payments.
- Local payroll reports – In some states, taxes are charged at the city and county levels and have different due dates.
How to organize your payroll reporting process
Regardless of what type of internal payroll report you’re looking to adopt, there are four basic steps to help you get your process organized.
- Identify the type of report you need. Choose the suitable report based on the insight you’d want to gain from your data. Once the report is chosen, identify what information you’ll need to collect to populate it.
- Choose the frequency of reports. Unlike government reports, you are free to choose the time periods you’d like to report on. Quarterly reports might result in a lot of unnecessary work for your payroll team. You may decide that issuing annual payroll reports is enough to give you the insights you’re looking for while also avoiding unnecessary burnout.
- Collect and input data. This step involves inputting the data you need into your payroll system. Workforce management solutions automate much of this process, making your life much easier while also reducing the possibility of human error.
- Analyze your reports. Double-check your payroll reports to make sure the information you are presenting is accurate. Finally, you should make use of your report findings and the insights you have gained to improve your payroll processes.
Clear and accurate payroll reports with Workforce.com
The first step to getting the most out of your payroll reports is making sure that the data presented in them is accurate. This starts by making sure that things like hours worked and overtime taken have been recorded correctly.
Workforce.com accurately stores employee data, like pay rates, hours worked, breaks taken, and overtime used. Synced with scheduling, you can track labor costs and hour variances in real-time, perfecting employee time before it reaches payroll. And when you are ready, you can quickly export all timesheets right to your payroll system, setting you up to create the best possible payroll reports for your business.
With Workforce.com, you can generate customizable payroll reports tailored to your needs. You can choose from a library of report templates, and modify it according to your requirements.
Get clear insight into how you pay your employees, including total wage costs, employee compensation taxes withheld, net pay, PTO, payroll deductions, retirement contributions, and other relevant information concerning employee pay. You can filter this information by role, location, team, and employee.
But Workforce.com goes beyond payroll. It combines payroll, time tracking and HR data in one platform to give you a 360-degree view of your organization.
Workforce.com’s reporting tools can track workforce management metrics like attendance, shift acceptance, and missed breaks, helping you improve shift coverage, punctuality, and wage and hour compliance. On the HR side, it allows you to generate reports on performance reviews, incidents, and warnings to support coaching, policy enforcement, and people development.
Having all this data in one place helps you spot discrepancies, identify trends, make more informed decisions. You can clearly see what you pay, what your people do, and how your team is growing.
To find out more about how Workforce.com can help streamline payroll reporting, book a demo here.
