Payroll terms in plain words

Short answers for payroll terms: FUTA, SUTA, EFTPS, Form 941, Form 940, Form 8655, W-4, W-2, 1099-NEC, I-9 and more.

What do payroll terms like FUTA, SUTA and EFTPS mean?

Each term below has a two-sentence answer, the place to find it in StartEase Payroll, and a link to a government source. Pick a term.

• What is FUTA?: FUTA is the federal unemployment tax. The employer pays it on the first $7,000 of each employee's pay.
• What is SUTA?: SUTA, also called SUI, is state unemployment tax. Each state gives each employer its own rate.
• What is EFTPS?: EFTPS is the Electronic Federal Tax Payment System. Federal payroll tax deposits are made through it.
• What is Form 941?: Form 941 is the quarterly federal payroll tax return. It reports the same totals as your deposits.
• What is Form 940?: Form 940 is the yearly federal unemployment tax (FUTA) return, due January 31.
• What is Form 8655?: Form 8655 is the IRS Reporting Agent Authorization. You sign it to choose StartEase as your authorized agent on Managed payroll.
• What is Form W-4?: The W-4 tells your employer how much federal income tax to withhold from each paycheck.
• What are Form W-2 and Form W-3?: W-2 is the yearly wage and tax statement for each employee. W-3 is the totals of all W-2s.
• What is Form 1099-NEC?: Form 1099-NEC reports what you paid a contractor for services in the year.
• What is Form I-9?: Form I-9 shows who an employee is and that they may work in the United States.
• What is a FEIN?: A FEIN is the Federal Employer Identification Number, the nine-digit number the IRS gives your business.
• What is a federal deposit schedule?: The IRS assigns each employer a monthly or semiweekly schedule for federal payroll tax deposits.
• Exempt vs non-exempt employees: A non-exempt employee earns overtime. An exempt employee is paid a salary and meets a duties test.

State-specific rules are not covered here. Read your state's own pages for those.