A payroll report is a document that summarizes important payroll data, like employee payments and payroll deductions, for a specified period of time. Reviewing payroll reports gives employers the ability to track labor costs and other payroll-related data points over time.
Most employers don’t sit around building payroll reports by hand. They use tools—payroll software or human resources information system (HRIS) platforms—to do it for them. The frequency depends on the business. But whether payroll reports are generated monthly, quarterly, or annually, the important thing is that they get done.
Elements of a payroll report
A payroll report is as unique as the business that creates it. Employers tailor the report to summarize payroll data that is important to them.
Although there is no universal format, employers typically track these data points:
- Employee names and/or ID numbers. The starting point.
- Gross wages. The total amount an employee earns before deductions.
- Hours worked. The hours a non-salaried employee works during a pay period.
- Overtime pay. The hours a non-salaried employee works beyond the standard work week (usually 35 or 40 hours).
- Tax withholdings. The amount and type of taxes withheld from an employee’s payment. The tax type depends on where the employee resides, but practically always includes income and social security taxes.
- Employer contributions. These frequently include unemployment insurance tax, benefits, and pensions. Some employer contributions are required by law, while others are not. Of course, employee location determines which employer contributions are mandatory.
- Net pay. The amount the employee is paid after deductions (think take-home pay).
Common types of payroll reports
With a robust payroll software provider, employers can quickly generate reports on virtually any payroll-related data point. Providers allow human resources (HR) and finance teams to spot errors or discrepancies early and discover emerging trends.
Payroll summary report
A payroll summary report is an overview document that captures all key payroll data for a specific period—such as gross pay, net pay, and deductions—including tax and benefits withholdings. With this report, employers can easily assess total payroll expenses.
Unlike other payroll reports that provide highly detailed breakdowns of data, summary reports deliver a high-level overview. A payroll summary report allows employers to quickly understand payroll trends and, as a result, make data-informed business decisions regarding labor costs.
Employee earnings report
An employee earnings payroll report analyzes employees’ wages, taxes, and benefits. This report offers a comprehensive portrait of an employee’s compensation, including their base salary, overtime pay, bonuses, and commissions.
It may also summarize deductions for income taxes, social security contributions, healthcare premiums, and other benefit withholdings.
Tax liability report
This type of payroll report lists all taxes owed by the employer and employees within an organization, showing the total tax obligations for a specific period. It captures employer tax liabilities, such as unemployment insurance contributions, workers’ compensation premiums, and employer portions of social security taxes. It also captures employee tax obligations like income tax withholdings, social security contributions, and other statutory deductions.
Tax liability reports greatly vary by country. Employers with global payroll may create tax liability reports for each country where employees reside to gain more nuanced insight into their tax liability there.
Deductions report
For a detailed account of all benefit deductions and other withholdings taken from employee pay during a specific period, run a deductions report. This report typically itemizes both mandatory withholdings, such as taxes, and voluntary withholdings for benefits.
Mandatory versus voluntary deductions vary by country. In the U.S., health insurance deductions are voluntary. That is not true in the U.K., where National Insurance contributions are required to be withheld from virtually every employee’s paycheck.
Other reports
Other standard payroll reports include:
- Retirement contribution reports. These reports detail how much employers and employees are contributing to retirement funds, like 401(k)s, in the U.S., over a given period.
- Paid time off (PTO) reports. Some countries require employers to pay for their employees to take time off. The Working Time Directive mandates four weeks of paid vacation for EU member states. Other countries, like the U.S., do not guarantee paid vacation as a benefit. In either scenario, PTO reports can give employers insight into how much they spend on employees’ time off during a specific timeframe.
- Payroll service charge reports. These reports detail how much an employer pays a service provider to run payroll.
Payroll reporting requirements
Tax agencies do not require payroll reports to be submitted, unless they are requested during the audit process. However, many require the submission of specific forms throughout the year. Payroll reports can help employers accurately complete these forms.
U.S.
The Internal Revenue Service (IRS) requires U.S. employers to file forms related to payroll at different points throughout the year, including:
- Form 941, Employer’s Quarterly Federal Tax Return. In this form, employers report “federal income, social security, and Medicare taxes withheld from employees’ paychecks” and “the employer’s share of social security and Medicare taxes” for each quarter.
- Form W-2, Wage and Tax Statement. Given to employees at the beginning of the year, this form summarizes annual wages, taxes withheld, and other payroll information needed for filing their federal and state income tax returns for the previous year.
- Form 940, Employer’s Annual Federal Unemployment (FUTA) Tax Return. This form reports an employer’s contributions to unemployment insurance for the year. Note that employees do not pay unemployment tax.
U.K.
In the U.K., certain employee payroll-related data must be electronically sent to His Majesty’s Revenue and Customs (HMRC) every time an employee is paid. Called Real Time Information (RTI) submissions, they include employee pay, tax withholdings, National Insurance contributions, and other deductions.
Canada
Among the forms Canadian employers must submit to the Canada Revenue Agency (CRA) are:
- Form T4 slip, Statement of Remuneration Paid. Employers submit this form to employees and the CRA annually. It reports total employment income, taxes withheld, Canada Pension Plan (CPP) contributions, and Employment Insurance (EI) premiums for the calendar year for each employee.
- Form T4 Summary, Summary of Remuneration Paid. This aggregates totals from all T4 slips that the employer issued and is submitted only to the CRA. It summarizes the total payment to and deductions for all employees.
Globally
Payroll reporting requirements vary by country. Employer of record (EOR) providers can manage cross-border reporting for international employers while helping ensure compliance with local tax laws. EORs manage reporting in countries where employers do not have a legal entity.
FAQs
Do I need to generate payroll reports every pay cycle?
Yes. Most employers generate reports per cycle for record-keeping and to meet tax deadlines.
How long should I keep payroll reports?
U.S. employers must retain payroll records for at least four years. (However, the IRS does not call out payroll reports explicitly as documents to be saved.) Other countries may require longer storage in the event of an audit.
Can payroll reports be customized?
Yes. Most systems allow customization by department, location, job role, or reporting frequency.
When payroll reports go global
The thing about running a global business is that payroll reporting doesn’t look the same everywhere. In fact, it might look wildly different. Every country has its own rules and paperwork—and most companies don’t have deep labor law expertise in all those places.
Pebl is your phone-a-friend, and our Employer of Record (EOR) service offers just the expertise you need. We make sure you can pay your international talent compliantly, on time, and with payroll reports that are actually useful.
And did we mention we do this in over 185 countries? Reach out today and we’ll explain how.
This information does not, and is not intended to, constitute legal or tax advice and is for general informational purposes only. The intent of this document is solely to provide general and preliminary information for private use. Do not rely on it as an alternative to legal, financial, taxation, or accountancy advice from an appropriately qualified professional. The content in this guide is provided “as is,” and no representations are made that the content is error-free.
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