Business owners familiar with quarterly payroll reports can gain so much more from them once they truly understand the value of these fundamental aspects of running a business. These federal and state filings, along with internal reports, track key metrics that help a business succeed. However, they are complex and time-consuming to pull together by their respective due dates, so staying on top of them is essential to maintaining compliance.
Interested in learning more about the benefits of quarterly payroll tax reports? Read on.
What Are Quarterly Payroll Reports?
Quarterly payroll reports are documents used by employers to report and pay their share of employee wages, taxes, and other payroll-related information to federal and state government agencies. There are different reports, but all help ensure businesses meet their obligations of contributing the correct amount of taxes on behalf of their employees.
Types of Quarterly Payroll Reports
There are three main categories of quarterly payroll reports: federal, state, and business reports.
- Federal reports: Form 941 (Employer’s Quarterly Federal Tax Return) must be filed by most employers to report income taxes, Social Security tax, or Medicare tax withheld from employee’s pay.
- State reports: Used for state filings, with examples such as the Florida Reemployment Tax (Form RT-6).
- Business reports: These internal reports can be used by employers to track and monitor important metrics.
Importance of Filing Quarterly Payroll Reports
First among reasons for filing quarterly payroll tax reports is that it ensures your business remains compliant with federal and state regulations, plus carries a key incentive of helping businesses avoid potential penalties and fines. By filing accurate and timely reports, your business maintains good standing with tax authorities, while building trust with employees for correctly handling tax withholdings and contributions.
When Are Quarterly Payroll Reports Due?
The due dates for quarterly payroll reports are as follows:
- Q1 (January to March): Due April 30
- Q2 (April to June): Due July 31
- Q3 (July to September): Due Oct. 31
- Q4 (October to November): Due Jan. 31
What Happens If Quarterly Payroll Reporting Is Late?
If your business files quarterly payroll reports late, you risk heavy penalties and fines from both federal and state agencies. Missing these deadlines puts your business out of compliance, which can threaten your profitability and long-term success, and may also create issues with the IRS.
Quarterly Payroll Report Requirements
Form 941, a federal quarterly payroll report, has specific requirements you must follow to ensure accurate reporting. This and other federal reports require businesses to provide information on:
- Wages paid to employees
- Federal income tax withheld from employees
- Social Security and Medicare taxes withheld from employee wages and paid as an employer
In addition to meeting compliance requirements, preparing quarterly payroll tax reports allows employers to identify errors and helps prevent issues with incorrect tax withholdings and inaccurate overtime pay calculations, to name a few. With a summary of wages, benefits, and more, quarterly payroll reports help employers forecast labor costs and budget properly.
How to Prepare Quarterly Payroll Reports
There are some general steps employers can take to prepare quarterly payroll reports:
- Gather all necessary information such as employee wage data, tax withholdings, and contributions for the quarter.
- Reconcile your payroll records by comparing your internal records with the information you’ve gathered to ensure accuracy.
- Complete the appropriate forms, whether a federal form such as Form 941 or any required state forms.
- Review and double-check all information to spot and correct errors before filing.
Common Quarterly Payroll Report Mistakes
With so many daily challenges and distractions, it’s easy for business owners to make mistakes—especially when it comes to quarterly payroll. Even the most diligent employers can slip up, leading to costly errors down the line. Here are a few common quarterly payroll report mistakes and how to avoid them:
Incorrectly classifying employees
Misclassifying might result in significant penalties, so consult with your legal counsel to go over and understand the rules between employees and independent contractors.
Missing a due date
Late filings or failure to pay on time could result in penalties. Make sure to mark your calendar with quarterly payroll reports due dates to avoid this.
Errors in calculations
Simple calculation errors can lead to under- or over-reporting, causing issues with tax agencies. Using payroll software can help automate these calculations.
How to File Quarterly Payroll Reports
To stay compliant and avoid penalties, follow these steps when filing your quarterly payroll reports:
- Decide how you’ll file: You can submit your reports electronically or through the mail, but the IRS recommends e-filing since it’s faster and less prone to errors.
- Submit tax payments: Make sure all required federal and state payroll taxes are paid by their respective deadlines for the quarter.
- Collect and review payroll data: Before filing, gather accurate information on employee wages, withholdings, and benefits to ensure your reports are complete and correct.
- Keep copies of your filings: After submitting your reports, save digital or paper copies for your records in case you need to reference them during an audit or for future filings.
Best Practices for Quarterly Payroll Reporting
Businesses can help streamline filing quarterly payroll reports by following some best practices:
Maintain meticulous records
All payroll-related should be maintained in a secure and organized manner.
Use reliable software
Payroll software can help automate calculations, track changes, and ensure timely filing.
Stay updated on regulations
Work with your financial advisor and even your payroll provider to check for regular updates from the IRS and state tax agencies because tax laws and regulations could change.
3 Best Quarterly Payroll Reports to Run
Running internal payroll reports can provide valuable insights into your business’s financial health:
1. Gross-to-net report
With a breakdown of employee earnings, including deductions and net pay, this report helps you track labor costs and ensure accurate payments.
2. Tax liability report
If you’re trying to forecast better and prepare for tax payments, a summary of all your tax liabilities on this report is helpful.
3. PTO accrual report
This report tracks employee paid time off, helping you manage leave balances and forecast future liabilities.
How Paycor Helps You with Quarterly Reports
Quarterly payroll reports, including tracking, calculating, and filing, are a complex process. Paycor’s payroll solutions are designed to simplify this for businesses. With Paycor, you can automate tax calculations, track payments, and generate the necessary reports for federal and state filings.
Create Quarterly Payroll Reports with Paycor
Ready to simplify your quarterly reporting? Take a guided tour of Paycor’s payroll software to see how we can help your business stay compliant and efficient.