Payroll Tax

How do I register for payroll tax withholding?

New businesses are automatically enrolled in EFTPS (Electronic Federal Tax Payment System) when the Employer Identification Number is assigned. A welcome letter is sent from the Department of Treasury which includes a four digit PIN and instructions for activating enrollment. Federal taxes are submitted electronically via the website.

A new business can be registered with the Virginia Department of Taxation and/or Virginia Employment Commission via VATAX Online at Registration can also be completed by paper filing Form R-1, Combined Registration Application Form.

Where can I find payroll forms?

Federal forms can be found on the Internal Revenue Service website and state forms can be obtained from the Virginia Department of Taxation website

Under Monfalcone & Garris resources tab the following employment forms can be found and downloaded:

  • Form W-4 Employee’s Withholding Allowance Certificate
  • Form VA-4 Employee’s Virginia Income Tax Withholding Exemption Certificate
  • Form I-9 Employment Eligibility Verification

What are my responsibilities for reporting New Hires?

All employees are required to report new and rehired employees within twenty days of their start date to the New Hire Reporting Center. The simplest method to submit the pertinent information is online at the Virginia New Hire Reporting Center website

How do I calculate payroll taxes?

Publication 15, (Circular E) Employer’s Tax Guide provides instructions and tables for withholding federal taxes from your employees’ wages.

The Virginia website,, has an Employer Withholding Tax Calculator to determine the amount of state withholding. Detailed instructions can also be found in the Withholding Tax Guide at

Are there payroll filing requirements for household employees?

Answers to questions concerning reporting and payment of employment taxes for household employees can be found in Publication 926 Household Employers Tax Guide available on the IRS website or by contacting Monfalcone & Garris. Based on the wages paid to the household employee you may need to withhold and pay social security and Medicare taxes, federal unemployment taxes and state unemployment taxes. While not required to be withheld, federal and state income tax may be withheld from wages if the employee requests you to do so.

What is the difference between an employee and an independent contractor?

An employer must examine all evidence of control and independence with the relationship they have with the worker. There are three basic categories that must be examined – behavioral control, financial control, and the type of relationship.

Behavioral control – How is the work environment directed by the employer? Does the employer directly control how the work is to be performed? Does the worker provide the same services for other businesses?

Financial Control – How is the worker reimbursed for his services and expenses? Is the worker available to perform similar services for other businesses?

Type of relationship – What extent does the worker provide similar services for other businesses? Are there written contracts describing the relationship? Is the worker provided with employee type of benefits? What is the permanency of the relationship?

If an employer has direct control of the workers performance of services and pays them employee type benefits they would be classified as an employee.

If the worker controls the work environment, provides the same type of services for other businesses and is not paid any employee type benefits then they would be classified as an independent contractor.

Where can I file my tax payments online?

You can file your payroll tax payments on the Electronic Federal Tax Payment System, also known as EFTPS, which is provided free by the U.S. Treasury. After enrolling and receiving a personal identification number by U.S. mail, you can login and pay tax due to the IRS. Depending on the state you are filing in you can pay through the state’s electronic payment system. In Virginia you can use Virginia iFile and remit tax payments online. Here are the links to both of these websites: