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

In IRS terminology, semiweekly means wages paid on Wednesday, Thursday, or Friday are generally due the following Wednesday, and wages paid on Saturday, Sunday, Monday, or Tuesday are generally due the following Friday. In practice, that usually means depositing within 3 to 5 business days after payday. It does not mean biweekly payroll and it does not mean semi-monthly payroll.

For the current IRS deposit rules, see IRS Topic no. 757, Forms 941 and 944 - deposit requirements.

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)

OnePayroll Form 941 support:

OnePayroll can automatically fill out Form 941 as a PDF using payroll data collected in payment batches. To use this feature:

  1. Configure a remittance group with Filing Method set to IRS Form 941 and a quarterly filing cycle.
  2. Assign your federal tax jurisdictions to the remittance group.
  3. After creating payroll runs for the quarter, open the accumulated payment batch from Payroll Payments and select Report.

See IRS Form 941 for detailed instructions.

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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