Managing your employees personal and tax information

If you have never had employees before you will be surprised at how much paperwork is needed just to keep employees on staff. The most common paperwork that is needed to keep employees on staff is personal information and tax information. The United States government actually requires any new employees to fill out various forms that you as an employer will need to keep on file. The reason that new employees need to fill out this paperwork is because of taxes, you as an employer need to withhold federal and state taxes from your employees' paychecks and the only way that you can withhold the right amount is to have them fill out a W-4. You also need to have your employees' current personal information on file because you have to file certain things with the IRS each year, such as a W-2, that is in relation to your employees' taxes.

Not only do you need to worry about managing your new employees' paperwork, but you are also going to need to make sure that your current employees' personal and tax information is kept up to date. Your current employees will also need t fill out a W-4 so that you know how much you are supposed to be withholding for state and federal taxes. They will also need to have their personal information on file, such as address and Social Security number. For all of your employees you are going to want to see their Social Security card and their state ID card or Driver's License, you will also want to make sure that you take a photocopy of their ID card or Driver's License so that you have one on record for each employee.

The best thing that you can do to make sure that you have the most current information, both personal and tax information, is to have your employees update their information on a yearly basis. The perfect time to have them update their personal information is when they are updating their tax information, which by law is required every year. But you also need to make sure that in your company's policy manual that you have a policy that requires your employees to update their personal information any time that they move. This will help to ensure that you are notified of the move before it is time to file taxes.

Here is a list of information that you as an employer must keep on each employee that you hire.

• The employee's name


• The employee's age, especially if under 20 years old


• The employee's postal address


• The type of work that the employee does


• The type of employment agreement, individual or collective


• The title, expiry date and employee classification in any applicable collective agreement


• Where payment is calculated by the hour; the hours and days of employment in each pay period. This also needs to include the start time, the finish time and any non-paid breaks that were taken.


• The wages paid each pay day


• Details of employment relations leave taken


• Details of annual leave taken


• Details of statutory holidays worked and days in lieu provided


• Details of salary deductions, such as PAYE and agreed superannuation contributions

You also want to keep in mind that you are required by law to hang onto your old employees' personal and tax information for a certain period of time. Most tax information has to be kept for a period of 7 years, but it is generally recommended that you keep personal and tax information on each employee for at least eight years.