If you're a business owner who's afraid of adding ITIN workers to your payroll, you're not alone. As a payroll company that specializes in adding ITIN workers to payroll, we hear this all the time. Business owners feel uneasy about:
- Potential legal implications
- Staying compliant with labor laws
- Tax obligations
Hopefully, the following will put your mind at ease.
Baron Payroll isn't a law firm, so we can't offer legal advice, but this is what we've seen and what we know to be true.
For over 20 years, Baron Payroll has successfully added ITIN (Individual Taxpayer Identification Number) workers to our clients' payrolls.
Let's get into it.
How Can You Add ITIN Workers to Your Payroll?
Switch to a payroll provider that accommodates ITIN workers and ensures compliance with both federal and state regulations.
And congrats... you found one!
Baron Payroll specializes in this area, providing ITIN workers with W-2 forms and ensuring their inclusion in your payroll system.
Learn more about our ITIN service.
How Can You Get Started with Baron Payroll?
Baron Payroll offers comprehensive services for managing ITIN workers. From handling documentation to ensuring compliance with all relevant laws, we provide a seamless solution for businesses of all sizes.
Learn more about our ITIN service.
Easy Onboarding Process
To get started, simply call us at 631-266-2500 and ask for Bill. Our team will guide you through the process, ensuring that your ITIN workers are added to your payroll smoothly and efficiently.
Transparent Pricing
We offer a detailed pricing calculator on our website, allowing you to get an instant quote based on your specific needs.
What If You Don’t Want to Switch Payroll Providers?
If switching payroll providers is not an option, you can create a separate entity with a different federal ID number to manage ITIN workers. This allows you to keep your current payroll setup while complying with regulations for ITIN employees.
Find out more about using a different payroll company for your ITIN workers.
Now that we've gotten the big questions answered... read on to learn more about the common questions we get asked about ITIN workers.
What Are ITIN Workers?
ITIN workers are individuals who do not have sufficient legal documentation to obtain a Social Security number but have been issued an ITIN by the IRS for tax purposes.
These workers are often among the best employees for many businesses but can pose a challenge when it comes to payroll due to misconceptions and restrictions from some payroll companies.
How Can You Overcome a Worker Shortage by Hiring Employees with ITIN Numbers?
Expanding Your Labor Pool
Many businesses face difficulties in hiring affordable and reliable workers. By including ITIN workers in your hiring strategy, you can significantly expand your labor pool. These individuals are often eager to work and can help you overcome staffing shortages effectively.
Why Do Some Payroll Companies Say No to Adding ITIN Workers?
It’s a common misconception that adding ITIN workers to payroll is illegal. In reality, many payroll companies simply find it inconvenient due to the manual effort required. Large payroll firms often prefer automated processes and may avoid the additional work involved in managing ITIN workers.
What Are the Risks of Not Adding ITIN Workers to Your Payroll?
Financial and Compliance Risks
- Department of Labor Compliance: Both federal and state Departments of Labor require proper payroll practices. Paying ITIN workers off the books or misclassifying them as 1099 contractors can result in severe penalties.
- Workers’ Compensation Insurance: If ITIN workers are not on payroll, they likely aren’t covered by workers’ compensation insurance, exposing you to significant liability if they are injured on the job.
- Employee Morale: Employees not on payroll miss out on benefits such as health insurance and retirement plans, leading to lower morale and higher turnover.
What Documentation Is Required to Add ITIN Workers to Your Payroll?
To legally add ITIN workers to your payroll, they must complete an I-9 form, which verifies their eligibility to work in the U.S. This form requires documentation from three lists provided by the Department of Homeland Security.
ITIN numbers themselves are not sufficient; the worker must have the appropriate documents to complete the I-9 form. This includes one document from List A or one document from both List B and List C of the I-9 form.
Here's a step-by-step guide on how to fill out the I-9 Form.
Do You Need to Withhold Social Security and Medicare Taxes for ITIN Workers?
Yes. Even without a Social Security number, ITIN workers are subject to Social Security and Medicare taxes. These amounts are held by the Social Security Administration under the worker’s ITIN and can be transferred to a Social Security number if they later obtain one.
Find out more about Social Security and Medicare Taxes for Your ITIN Workers.
And that's it!
Adding ITIN workers to your payroll is not just about compliance; it’s about maintaining a happy and productive workforce.
If you found this article helpful, here are some others you might like:
- Can I Hire Someone with an ITIN Number?
- How Much Do Payroll Services Cost?
- Why are my W2 Wages Lower Than my Salary?
- How to Choose the Best Payroll Company for Your Small Business
- The Pros and Cons of Paying Employees with Payroll Paycards
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