Payroll Report: Definition, Types & Examples
A payroll report is a document created every pay period that displays specific financial information such as pay rates, hours worked and taxes withheld for the specific pay run. Some payroll reports are required to be filed with state and federal government agencies on an annual or quarterly basis. To make the process quick and easy, most businesses use payroll software or an outsourced payroll service to help process payroll and stay compliant with filing requirements.
Definition of a Payroll Report
A payroll report is a document that businesses use to provide specific payroll information to government agencies, and keep on file for their own pay records. These reports show the pay rate, total pay, taxes withheld, overtime incurred, overall benefit costs and more information about the company’s employees. Each payroll report is specific to a defined payroll run and is created every time the company pays its employees.
The point of filing a payroll report is to stay compliant with federal, state and local regulations that require each business to report on the taxes they withhold and their potential tax liability. This enables government agencies to match up payroll reports with tax filings so that the tax liability for both the employer and employee is correctly calculated. A good reporting system makes overall payroll management a lot easier.
Benefits of Payroll Reports
There are many benefits to maintaining accurate payroll reports that can end up saving you time and money while protecting your business from potential fines, lawsuits or other penalties. Here are the most important benefits of payroll reports.
- Makes tax reporting easier: Having the necessary payroll reports will make filing payroll tax forms a lot easier and lower your chance of being audited or getting fined.
- Helps you budget: Being able to see these payroll reports over a period of time can help you accurately predict what payroll is going to cost the business over the next quarter or year.
- Gives you better data on your employees: Having these payroll reports helps you manage your employees better by giving you actionable data. Examples might include understanding turnover and how much you’re spending on benefits.
- Track paid time off: A lot of companies use their payroll reports to keep track of how much paid time off their employees have left for the year.
- Pay taxes on time: Being able to generate certain payroll reports when you pay your employees instantaneously can help you pay all the employee withholdings immediately. This prevents fines or penalties for holding on to that money for too long.
Types of Payroll Reports
There are different types of payroll reports that are created for a variety of reasons. It’s important to understand the differences between these payroll reports so that you can identify which report you need to create and keep track of.
Company Payroll Reports
This is a report that a business will run for internal purposes. The report is typically run at the end of every payroll period after all pay for employees has been finalized. It shows a detailed overview of all company payroll expenses for the period, including taxes that were withheld and any additional tax liabilities that the company may have.
These reports are used by companies to help predict their payroll expenses for budgeting out their employee expenses. It also helps calculate numbers that they must provide on federal and state-level reporting, such as the quarterly FICA taxes. It is a best practice to keep these reports accessible for the minimum time that the company can be audited for a pay period.
Federal Payroll Reports
One of the largest administrative responsibilities for businesses that hire employees is making sure that all taxes are appropriately accounted for and filed properly with the Internal Revenue Service (IRS). In fact, a company typically must collect data and file several different reports on a monthly, quarterly and yearly basis.
For example, businesses must file Form 941, Employer’s Quarterly Federal Tax Return, on a quarterly basis. This form details the amount of taxes withheld from employee checks or payments. Then, on an annual basis, the business will be required to file a W-2 and W-3 form for each employee.
State and Local Payroll Reports
Depending on the state that your business calls home, and the state where your employees live or work, you may be required to fill out additional payroll reports or forms for those local governments.
A good example of this is if you have an employee working in a state that requires you to withhold state income tax. You would need to file the report with the state on a quarterly or annual basis, depending on the state’s requirements, showing how much you withheld for that employee.
Employee Payroll Reports
An employee payroll report is typically automatically generated with any payroll software as it will show the details of the pay period for a single employee. This is generally delivered to the employee for each pay period either through a physical attachment to a check or via a document that can be accessed online.
This report will show how many hours the employee worked and was paid for, what taxes were withheld for the employee, the costs of benefits that were withheld for the pay period and potentially could show details on things such as reimbursements or paid time off. This report will also likely show the cumulative amounts of all of these figures for the year to date for that specific employee.
Payroll Tax Reports
A payroll tax report is going to show the specific information needed for a variety of tax filings that the company is required to file. A lot of this information is available in other payroll reports, such as the employee report or the federal report.
However, these payroll tax reports will only detail the needed information for specific forms, such as Form 940 for the Federal Unemployment Tax Act (FUTA). Some payroll systems might show either these reports or the federal and state-level reports and may not have separate reporting.
Payroll Report Examples
It can be helpful to look at real-world examples of payroll reports to better understand how they might be applicable to your business and your personal situation. Here are three payroll report examples that you might want to familiarize yourself with.
Employee Earnings Statement
This is showing an example employee report from Gusto where the employee can see what they have earned in the current pay period and year to date. It is also showing all of the withholdings and paid time off calculations.
Internal Payroll Report
This report is showing how a business can view its internal payroll reporting if it were to use Rippling. As you can see, the payroll costs can be broken down by department to see where the majority of the payroll budget is coming from, how much employees are making and what it is costing the business.
Quarterly Report
Here is an example of a quarterly payroll report that you can run if you use OnPay to process your payroll. It shows a breakdown of what was earned by each employee and what taxes were withheld throughout the time period.
How To Run a Payroll Report
Payroll reports can’t provide the great value to your business that you need if you don’t know how to properly run them and get the right information. The way that you’ll run a payroll report is going to depend largely on how you process payroll. Most businesses either have a third party that processes their payroll and provides the reports in detail, or they can simply run the reports in their payroll software. The latter is what we’ll focus on here, but the steps will depend on what software you use.
For example, if you want to run a payroll report using Gusto, you would typically follow these steps:
- Step 1: Click the “Reports” tab.
- Step 2: Search for a report name or browse the reporting categories.
- Step 3: Select the report you want.
- Step 4: Use the provided checkboxes next to the information that you want to be included in the report.
- Step 5: Select the format of the report, either PDF or CSV.
- Step 6: Click “Generate Report.”
You will then get the information you requested within seconds. You can also generate a custom report through its custom report feature, but it is a bit more complicated since you’ll have to sort through all information and not just the information related to the type of report you’re looking for. You can get help with the software’s customer service to assist with any reporting questions or problems.
Bottom Line
A payroll report is an important reporting tool that can help you keep track of your tax liability and stay on top of federal and local regulations. It’s important to be familiar with these reports if you are running a business because it can become costly to not have proof of what you paid your employees or the amount of taxes you’ve collected.