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Payroll reporting provides employers with the data they need to track labor costs, federal and state tax liabilities, and employee wages. But if you’re just getting familiar with the different reports that most companies have at their fingertips, it can be a little overwhelming to know which ones you should be running.
Key takeaways about payroll reporting
- Payroll reports provide data on labor costs, tax liabilities, and employee wages, helping employers to manage finances and comply with regulations
- Essential payroll reports include the payroll register, payroll summary, general ledger summary, and employee summary, each offering unique insights into payroll data
- Federal payroll reports, such as Forms 940, 941, and W-2/W-3, are mandatory for tax reporting and must be filed according to specific Internal Revenue Service (IRS) schedules
- Regular payroll reporting helps with accurate budgeting, tax liability tracking, and maintenance of complete employee payment records
To make things easier for you, this guide will discuss some of the most common payroll reports used by employers, what they typically include, and why they are important.
What are payroll reports?
In simple terms, payroll reports provide employers with data such as an employee’s pay rate, total pay, payroll deductions, taxes owed, and benefit costs. These reports help to ensure that employees are being paid properly, taxes are being withheld at the correct level, and payroll expenses are being correctly recorded. They also provide a basis for payroll tax reports that need to be filed at the state and federal levels.
Payroll reports provide valuable data that employers can use to keep up with compliance and their company’s bottom line.
- For instance, it would be difficult to determine how much money you owe in federal employment taxes (and Uncle Sam expects his due) if you didn’t have a report that contained all that information
- On the other hand, payroll reports help paint the big picture of your company’s spending. They provide an overall summary of payroll-related expenses such as benefits and contributions, allowing you to see exactly what your expenses are
- Finally, payroll reports allow you to better track employee paid time off (commonly referred to as PTO), to ensure accurate totals
With that primer out of the way, let’s find out more about the generally standard type of information that’s included when setting these up.
What’s typically included in a payroll report?
The information usually found in a payroll report can include any of the following:
- Employee name
- Worker’s pay rate
- Year-to-date totals
- Employee deductions (insurance benefits or retirement contributions)
Payroll reports may also include a detailed list of local, state, and federal tax deductions, along with vacation, sick leave, or other current paid time off totals. Because information varies from report to report, it’s a good idea to regularly run multiple payroll reports.
What reports do you run for payroll?
Payroll reports generally fall into one of the following categories:
- Payroll summary reports
- Tax reports
- Detailed payroll reports
- Paid time off (PTO) reports
- Deduction summary reports
Running these reports can provide your business with the detailed information it needs to adequately track payroll expenses, pay employment taxes, manage deductions, and monitor employee time off.
Now that we have covered the basics of reports, let’s talk about the ones many employers run on a regular basis.
What payroll reports should employers run (and keep)?
Still unsure which payroll reports to run? The following seven payroll reports will provide you with all the data you need to manage your business’s labor costs.
Payroll register report
Up first? Drumroll, please! One of the most common payroll reports is the payroll register report — its purpose is to provide detailed information for each of your employees after payroll has been run. Information found in the payroll register report includes:
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The payroll register documents all pay-related information in a single report. This allows you to manage any contributions or employee deductions, and provides detailed information on payroll and benefit costs for funding and budgeting purposes.
Payroll listing report
The next one on the list for employers to get familiar with is the payroll listing report. This provides much of the same information that the payroll register report does but with a small difference, as it lets you see the data for a specific date range. For example, if you only want to see data from the dates July 2 through July 9, this report allows you to narrow down the information (most payroll software makes it simple to see this type of data in a few clicks, and then export it to a CSV or PDF file).
Having this type of specific information accessible can be especially helpful when an employee has questions regarding the accuracy of their pay, since you can create a report specifically for that employee. It’s also useful for checking year-to-date payroll totals.
General ledger (GL) summary
The accounting department frequently uses a general ledger summary report to manually post payroll expenses into a company’s accounting software. This is common practice if your payroll software does not have an integration that automatically handles this task.
So, what information is usually included? The general ledger summary, which includes total wages, taxes, and benefits, as well as tax liability and deductions, is a must for accurate payroll and related expense recording.
Delegate some details
In a recent OnPay small business survey, more than one-third of respondents said they would like to delegate their company’s bookkeeping.
Payroll summary report
The payroll summary report provides detailed information on how much employees were paid over a specific date range. It’s often run for a particular date range and can track all employees or an individual employee.
Information found on the payroll summary report include:
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The payroll summary report is useful if you want to review overall payroll totals, or totals by employee or department.
Earnings summary report
The earnings summary report provides a summary of employee earnings for a specific date range. Information included in the earnings summary report include a list of employees, their gross salary, employee tax totals, deduction totals, net pay, and benefits totals.
The earnings summary report helps employers manage both deduction and benefits totals, ensuring that they are accurate.
Employee summary report
The employee summary report contains detailed information for each employee. Though providing the same information as the earnings summary report, the employee summary provides a detailed list of the following:
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The employee summary report is invaluable for employers, as it provides the actual cost of an employee. This includes wages, taxes, and other benefits such as 401(k) matching or health insurance benefits.
Federal payroll reports
Finally, any business that pays employees will need to complete and file the following forms:
Form 940
Form 940 is used to file your annual Federal Unemployment Tax Act (FUTA) tax, which applies to the first $7,000 in wages earned. Any employer who pays more than $1,500 in wages to an employee will need to file this form annually, with a due date of January 31 of the following year.
The takeaway is that this form helps employers track how much they’ve paid into the unemployment system, ensuring that benefits are available to qualified employees.
Form 941
Form 941 is used to report withheld income tax, Social Security, and Medicare taxes from your employee’s paycheck. In addition, Form 941 is also used to report the employer’s portion of Social Security and Medicare taxes (FICA) that is due. Form 941 is filed quarterly, though some companies may be required to annually file Form 944 instead.
Why is Form 941 a document you’ll want to be familiar with? It’s important because it reports federal income tax withholding, including Social Security and Medicare taxes, that are deposited monthly.
Annual W-2
Employers are annually required to file Form W-2 for each employee by January 31. This form provides detailed information regarding total pay, taxable income, taxes withheld, and benefit deductions. Form W-3 must be completed when filing W-2s, which must also be distributed to employees at year-end. It can be a good idea to have this process buttoned up at the end of year, as there can be penalties when employers don’t send W-2s.
The IRS uses the information submitted on Form W-3 to verify the deducted taxes and the annual amounts paid to the IRS. If there is a discrepancy, you will receive a letter from the IRS requesting additional information.
Payroll reports can reveal opportunities
Payroll reporting is an essential component of the payroll process because it provides data that all businesses can use, which might otherwise get overlooked. Because reports provide detailed information on total labor costs, they can be vital for accurate budgeting and optimizing staff schedules. They also help to simplify tracking tax liabilities for both federal and state entities, saving time and effort. Moreover, payroll reports maintain a complete record of employee payments and withholdings, which is useful if employees have any wage-related questions. As you explore companies offering these tools, our team can help you identify the reporting solutions best suited for your business needs.
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Jon Davis is the Sr. Content Marketing Manager at OnPay. He has over 15 years of experience writing for small and growing businesses. Jon lives and works in Atlanta.