Form W-2
What is a W-2 form?
Form W-2 (Wage and Tax Statement) is an annual tax document provided by employers to employees. This form summarizes the total wages earned and the specific taxes withheld (including federal income tax, Social Security, and Medicare) for the previous calendar year. Employees use the W-2 to file personal income tax returns, while employers must file this data with the Social Security Administration (SSA).
Things to know
- W-2 forms are issued to employees; independent contractors receive Form 1099-NEC instead.
- The standard deadline to provide W-2s to employees and the SSA is January 31 for the prior tax year.
- 7shifts Payroll utilizes your payroll data to capture the wage and tax information required for year-end reporting.
Information included on a W-2
The W-2 contains critical identifying information and financial totals for the calendar year.
- Employee personal details: Legal name, address, and Social Security Number (SSN).
- Employer details: Business name, address, and Employer Identification Number (EIN).
- Financial totals: Total wages, tips, and other compensation.
- Tax withholdings: Federal, state, and local taxes, along with Social Security and Medicare withholdings.
Restaurant-specific W-2 considerations
Managing payroll in the restaurant industry involves unique variables that impact W-2 reporting.
Tip reporting
Any tips reported by employees and processed through 7shifts Payroll are included on the W-2 because they are considered taxable income.
Pay stub discrepancies
The totals on a W-2 reflect the entire calendar year. These may differ from a final pay stub due to benefits, year-end adjustments, or specific timing differences in payroll cycles.
Incorrect employee data
If an employee's name or SSN is incorrect, it can cause filing rejections. You must issue a corrected form, known as a W-2c, to rectify these errors.
Caution: Never estimate or guess an employee’s SSN. Always verify the legal name and SSN directly from the employee’s official documentation before updating records.
How to correct a W-2
If you identify an error regarding wages, withholdings, or personal details, follow these steps to issue a correction.
- Determine if the error relates to employee details, financial amounts, or both.
- Verify the accurate information against employee documentation or 7shifts Payroll reports.
- Generate Form W-2c (Corrected Wage and Tax Statement) and file it with the appropriate agencies.
- Provide the completed W-2c form to the affected employee for their records.
Important: Correction requirements vary based on the type of error and where the original form was filed. Consult a payroll professional if you are unsure of specific state or local requirements.
7shifts Payroll workflows
To ensure accurate W-2 reporting within 7shifts Payroll, confirm the following configurations in the employee profile.
- Verify the worker is classified correctly as an employee rather than a contractor.
- Ensure the employee’s legal name and SSN match their Social Security card.
- Confirm that all tips and wages for the calendar year have been accurately recorded in the payroll history.