Table of Contents

US localization and compliance

US-specific OnePayroll features, requirements, and compliance information.

Federal tax requirements

Form W-4 and federal income tax

2024 Form W-4:

  • Current version employees should complete
  • Replaces older "withholding allowance" system
  • Employee provides:
    • Filing status (Single, Married, Head of Household, etc.)
    • Tax credits (children, CDCC, dependents)
    • Other income adjustments
    • Extra withholding requests

OnePayroll handles:

  • Standard calculation method (full W-4 calculation with brackets, deductions, and credits)
  • Simplified calculation method (bracket-based lookup)
  • Automatic withholding per configured tax rate tables

FICA rules

Social Security (6.2% employee, 6.2% employer):

  • Wage base: $168,600 (2024, subject to annual increase)
  • OnePayroll stops withholding once limit reached
  • Employer match continues regardless (must still pay)

Medicare (1.45% employee, 1.45% employer):

  • No wage base limit - applies to all wages
  • Additional Medicare Tax: 0.9% on wages over:
    • $200,000 (Single)
    • $250,000 (Married Filing Jointly)
    • $125,000 (Married Filing Separately)
  • Employer match on Additional Medicare: 0.9%

State and local income tax

States with income tax: Most states (41) have income tax. States without:

  • Alaska (AK)
  • Florida (FL)
  • Nevada (NV)
  • South Dakota (SD)
  • Tennessee (TN) - Interest/dividends only
  • Texas (TX)
  • Washington (WA)
  • Wyoming (WY)
  • New Hampshire (NH) - Interest/dividends only

OnePayroll support:

  • State W-4 processing (each state form differs)
  • Multi-state employee support
  • Reciprocal agreement handling (if applicable)

Local income tax: Some cities/counties impose:

  • New York City (0.876%-3.876% range)
  • PA municipalities
  • OH municipalities
  • MD municipalities

Payroll tax deposits

Federal tax deposits

Timing:

  • Semiweekly schedule (most common) - Deposit by Wednesday or Friday
  • Monthly schedule (if under $50,000 annual tax) - Deposit by 15th of next month

Method:

  • EFTPS (Electronic Federal Tax Payment System)
  • Bank ACH deposit
  • Mail check with Form 941-V voucher (if authorized)

OnePayroll support:

  • Calculates deposit amounts
  • Tracks deposits made
  • Reconciles to Form 941

State tax deposits

Varies widely by state:

  • Many states: Monthly deposits due by 15th
  • Some states: Quarterly deposits
  • Verify your state's specific requirements

OnePayroll:

  • Reports state withholding
  • Supports state filing

Quarterly reporting (Form 941)

File quarterly:

  • Q1: By April 30 (covers Jan-Mar)
  • Q2: By July 31 (covers Apr-Jun)
  • Q3: By October 31 (covers Jul-Sep)
  • Q4: By January 31 (covers Oct-Dec)

Reports:

  • Number of employees paid
  • Total wages paid
  • Federal income tax withheld
  • Social Security and Medicare taxes (employee and employer)

If error discovered:

  • File Form 941-X (amended return)
  • Same filing deadline as original
  • Show correction detail

Annual reporting (W-2/W-3)

Due January 31 following year:

  • W-2: One copy to IRS, two to employee (Copies 1&B, 2), one to state
  • W-3: Transmittal form to IRS with all W-2s
  • State W-2 equivalent: Per state requirements

OnePayroll supports:

  • Tax statement generation based on payroll entries
  • W-2 data from processed payroll
  • State tax withholding by jurisdiction

Boxes included:

  • Box 1: Federal wages
  • Box 2: Federal income tax
  • Box 3: Social Security wages
  • Box 4: Social Security tax
  • Box 5: Medicare wages
  • Box 6: Medicare tax
  • Boxes 18-20: State/local wages and taxes

Federal Unemployment Insurance (FUTA)

Form 940 - Annual filing:

  • Due January 31 following year
  • Wage base: $7,000 per employee
  • Rate: 0.6% federal (after state credit of up to 5.4%)
  • Typical rate: 0.6% (if state credit available)

Calculate:

  • Identify subject wages (up to $7,000 per employee)
  • Sum across all employees
  • Apply 0.6% rate

OnePayroll support:

  • Calculates FUTA liability
  • Generates Form 940 data
  • State credit coordination

State Unemployment Insurance

Varies significantly by state:

  • Rates: 0.5% - 5.4% (varies by state and experience rating)
  • Wage base: $7,000 - $46,000+ (varies by state)
  • Some states: Employer only; some states: Employee+employer
  • Quarterly or annual reporting

Example rates (approximate):

  • New York: 2.4% - 3.4% on $27,300 base
  • California: 1.5% - 4.0% employee + 1.5% -5.5% employer
  • Texas: 0.42% - 5.4% (employer only)

OnePayroll:

  • Tracks subject wages per state
  • Supports state quarterly/annual reporting

Garnishments and court orders

Types of garnishments:

  • Child support - Family court order
  • Spousal support/Alimony - Family court order
  • Wage garnishment - Civil judgment
  • Tax levy - IRS or state tax lien
  • Student loan - Federal/private loan default

Federal limits

Garnishment cannot exceed (per federal law):

  • 25% of disposable income, OR
  • Amount by which weekly disposable exceeds 30 times federal minimum wage ($7.25)
  • Whichever is less

Special rules:

  • Child support: Up to 50% (60% if past-due)
  • Voluntary retirement: No limit

Protection provisions

OnePayroll tracks:

  • Garnishment priority (order of application)
  • Protected amounts (FLSA requirements)
  • Required remittance to payee/court
  • Compliance with court order amounts

Document required:

  • Copy of court order on file
  • Amount and termination date
  • Payee/court address for remittance

Employee compensation

Payment methods

OnePayroll supports:

  • Direct deposit (ACH)
  • Check (physical or electronic)
  • Mixed (split between methods)

Timing:

  • Must pay promptly on regular payday
  • Minimum wage and overtime rules apply

Minimum wage

Federal minimum wage: $7.25/hour (2024)

  • States may have higher minimum (most do)
  • Employers are responsible for ensuring compliance with applicable minimum wage laws
  • Tipped employees: May be lower if tips credited (varies by state)

Overtime:

  • 1.5x regular rate for hours over 40/week (federal minimum)
  • Some states/employers: More generous (double time, etc.)
  • Salaried exempt: May not be subject (depends on duties test)

Classification: Exempt vs. Non-Exempt

Salaried employees:

  • May be "exempt" (no overtime required)
  • Or "non-exempt" (overtime still required)
  • Exempt status depends on:
    • Salary level (minimum $47,476/year federal, 2024)
    • Job duties (executive, administrative, professional, etc.)
    • Not all salaried employees are exempt

OnePayroll consideration:

  • Employee type classification doesn't automatically set exempt status
  • User responsible for ensuring proper classification
  • Non-exempt salaried: May still require overtime calculation

Deductions and allowances

Required withholdings (cannot be waived)

  • Federal income tax
  • FICA (Social Security/Medicare)
  • Court-ordered garnishments
  • Court-ordered child support

Voluntary deductions (may be authorized by employee)

  • Health insurance premiums
  • Retirement plan contributions (401k, etc.)
  • Flexible Spending Account (FSA)
  • Health Savings Account (HSA)
  • Wage assignments (per agreement)
  • Union dues

Restrictions

  • Deductions cannot reduce pay below federal minimum wage
  • Progressive deductions if multiple garnishments
  • Specific rules by state

Benefit plan compliance

Health insurance (if offered)

1095-B (if self-insured or fully insured):

  • Due to employees: January 31
  • Due to IRS: March 31
  • Reports coverage offered
  • Employee/dependent names and coverage months

Employer plans (401k, etc.)

Plan-specific filings:

  • Form 5500 (if plan has > 100 participants)
  • Plan updates and amendments
  • Summary Plan Description (SPD)

OnePayroll:

  • May integrate with plan provider
  • Tracks contributions
  • Often plan provider handles filings

HSA and FSA

Compliance requirements:

  • 401h notice to employees
  • Summary of benefits
  • Claims substantiation
  • Annual reporting

Workplace posters and notices

Required federally (post in workplace):

  • Equal Employment Opportunity (EEO) notice
  • Family and Medical Leave Act (FMLA)
  • Occupational Safety and Health (OSHA) poster
  • Wage and hour rules
  • State-specific: Varies (post state minimum wage, payday rules, etc.)

OnePayroll:

  • Not responsible for posting (HR/Admin responsibility)
  • Should be visible to all employees
  • Update as laws change

Verification of employment eligibility

Form I-9 (Employment Eligibility Verification):

  • Required for all employees
  • Employee and employer sign
  • Verify identity document and work authorization document
  • Keep on file minimum 3 years (I-9 retention required)

E-Verify (optional but encouraged):

  • Electronic verification through federal system
  • Some states require for certain employers
  • Verify Social Security and employment authorization

Payroll records retention

Minimum retention: 3 years

  • Federal: 3 years minimum (some recommend 7)
  • State: Varies (1-7 years depending on state)
  • Best practice: 7 years

Retain:

  • Payroll registers
  • W-2s and tax returns
  • Timesheets/hour records
  • Tax deposits and payment records
  • Employee records
  • Garnishment documentation

Multi-state considerations

If employees in multiple states:

  • State-specific tax setup required
  • Verify reciprocal agreements (if applicable)
  • Register for unemployment insurance (each state)
  • State-specific deductions/rules
  • Track income/tax apportionment

Remote/work-from-home employee:

  • State where work performed (usually employee's location)
  • Or per company policy (verify with state)

Common compliance issues

Misclassification

Employee vs. contractor (common issue):

  • IRS Form SS-8 determines status
  • Employees: Subject to withholding
  • Contractors: Not subject to withholding
  • Heavy penalties for misclassification

Exempt vs. non-exempt:

  • Salary alone doesn't make exempt
  • Duties test must be satisfied
  • Misclassification results in overtime liability

Meal and rest breaks

Not a federal requirement, but many states require:

  • Examples: CA, MA, OR, WA
  • Paid vs unpaid varies by state
  • OnePayroll doesn't specifically enforce (company responsibility)

Wage and hour audits

If audited:

  • IRS examines payroll records
  • State audits timekeeping (overtime)
  • Department of Labor (DOL) investigates misclassification
  • Snapshots and historical records critical

Best practices for US compliance

  • Stay current: Tax laws change annually (W-4 versions, rates, etc.)
  • Document procedures: Written payroll procedures
  • Track thoroughly: Hours, deductions, garnishments
  • Reconcile: Monthly payroll GL and tax reconciliation
  • File timely: Don't miss tax filing deadlines
  • Retain records: 7+ years minimum recommended
  • Employee communications: Clear paystub explanations
  • Professional help: Consider payroll service provider or accountant

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