You’ve just hired a new employee—congratulations! Your first order of business is distributing and collecting new hire paperwork, like tax withholding and benefits forms. And whether it’s your first or 50th hire, remembering every last one of these documents can be difficult, which is why our partners at Patriot put together this paperless guide to new hire paperwork.
Read on for an overview of government-required forms for new hires, along with common business documents.
Through new hire paperwork, you can gather the information you need to confirm an employee’s work eligibility, determine tax withholding, and more.
Collect the following new hire forms from employees on or before their first day with your business:
Is the employee legally allowed to work in the United States?
Form I-9 is a government-required form employers use to verify new hires can legally work in the United States. As part of the verification process, employees must bring in original documents that prove their identity and employment eligibility, like a passport.
Both employers and employees fill out this employment eligibility form. Employees must add identifying information, like their name, date of birth, and Social Security number. Employers must provide information about the original document(s) the employee brings in, like the title, number, and issuing authority.
After completing the form, you can input the information on Form I-9 into E-Verify to check the employee’s employment authorization. And, store Form I-9 in your payroll records for at least three years after hiring an employee or one year after their employment ends (whichever is later).
What to do if the employee doesn’t have a Social Security number:
If your new hire doesn’t have an SSN, have them fill out Form SS-5, Application for Social Security Card. All employees should have an SSN on file so you can report their wages to the IRS.
Remember that a new hire can begin working for you before receiving their SSN, according to the SSA. However, make sure to collect their SSN as soon as they receive it.
How much do I need to withhold in federal income taxes?
To pay employees, you need to run payroll. And to run payroll, you need to know how much to withhold in taxes. Because the amount of federal income tax withholding varies by person, you’ll need a completed Form W-4 on file. In fact, the IRS requires it.
Form W-4 is divided into five steps that employees must complete:
Like Form I-9, don’t file Form W-4 with a federal agency. Instead, store it in your payroll records. Use the information the employee entered and the income tax withholding tables in IRS Publication 15 to determine federal income tax withholding.
Pro Tip: Use payroll software to ditch the income tax withholding tables. After you enter the employee’s Form W-4 information, the software automatically calculates employee taxes.
Do I need to withhold state income taxes? How much?
Most (but not all!) states have a state income tax. Unless the employee is not subject to state income tax withholding, you must use state W-4 forms to determine the amount.
Each state has a different state tax withholding form you must distribute to and collect from new hires. After you determine which form your state uses, employees can fill it out with their personal information, similar to the federal W-4 form.
Heads up! Your employees may also be subject to local income tax withholding (e.g., a percentage of their wages).
What benefits will the employee elect to receive?
Do you offer your employees benefits, like a 401(k) retirement plan, health insurance, or life insurance? If so, you must:
Interested in offering a 401(k) plan to your employees? Whether your state has retirement plan mandates or you want to expand your employee benefits, you may consider signing up for a 401(k).
Does the employee want to receive their wages via direct deposit?
You need some info if you offer direct deposit and want to pay employees with this popular payment method. Employees who want to enroll in direct deposit must give you bank account information, including their bank account and routing numbers.
Does the employee agree with my business’s policies?
You put so much work into creating your company’s employee handbook. You took the time to outline your paid time off policy, dress code, employee conduct, and so much more. But... what if employees barely glance at it?
Consider asking employees to sign an employee handbook acknowledgment form. That way, you can make sure your new hires:
Like other new hire paperwork, the employee handbook receipt and acknowledgment form belong in your records.
Who do I contact in case of an emergency?
Last but not least, consider asking new hires for information on who to contact in case of an emergency. Employees should provide each contact’s:
Although you hope you won’t have to use it, keep the form somewhere safe and easily accessible (e.g., HR software).
Again, new hire paperwork isn’t for filing with federal, state, or local agencies. These documents belong in your records and your records alone. You may have a main employee file and a confidential information file.
In the employee’s main file, you can include their emergency contact information and employee handbook acknowledgment form.
Keep a confidential employee file for each employee that contains:
Consider using HR software to securely store employee files in the cloud, quickly and easily access information, and automatically back up files.
Rachel Blakely-Gray is Content Manager at Patriot Software, LLC, a provider of affordable online accounting software and payroll for small businesses and partner of Vestwell. At Patriot, she enjoys providing actionable, growth-oriented information for small business owners.