If you hire employees, you’ll want to get acquainted with the W-2 Form. What is it, and when should you use it? You’ll get the answers to both those questions below.
Key takeaways:
A W-2 is a tax form that is issued by an employer to an employee at the end of the year. The form reports the employee's taxable income, including salary, bonuses, and other taxable benefits, as well as the taxes withheld from the employee's pay. The W-2 is then used by the employee to complete their individual tax return and report their taxable income to the government.
For employers, it's important to understand the W-2 form because it is a key tool for reporting an employee's taxable income. By issuing a W-2 to each of their full-time employees, employers can ensure that their employees are accurately reporting their taxable income and that they are in compliance with tax laws and regulations.
If you’re hiring employees abroad, whether or not they’ll need a W-2 depends on a couple of factors:
If the answer is yes to both of these questions, you likely need to issue a W-2 to your employee.
By understanding what a W-2 is and the specific requirements for issuing W-2 forms in the country in which the employee is based, employers can ensure that they are accurately reporting taxable income and that they are in compliance with tax laws and regulations.
You don’t need to issue W-2 forms to your contractors. But, if you are hiring contractors, you’re probably spending too much time on their payroll, contracts, and tax documents. Which is why we built Panther, which saves you 90% the time you spend on contractor paperwork each month.
With Panther, you can compliantly hire your contractors in 150+ countries, onboard them in minutes, and pay them all at once (in a click). It’s global contractor payroll, finally simplified.
Sound interesting? Click here to watch a 4-minute product demo and see the platform firsthand (without ever having to book a lengthy product demo call).
