Client payroll employee file: 4 checks before pay

• Verify the identifier type: The IRS requires you to get each employee's name and Social Security number (SSN) and to enter them on Form W-2, a requirement that also applies to resident and nonresident alien employees Internal Revenue Service.
• Reject ITINs for employee ID: Do not accept an ITIN in place of an SSN for employee identification or for work Internal Revenue Service.
• Secure a signed federal certificate: To know how much income tax to withhold from employees' wages, you should have a Form W-4, Employee's Withholding Certificate, on file for each employee Internal Revenue Service.
• Request the form at start: Ask all new employees to give you a signed Form W-4 when they start work Internal Revenue Service.
• Set the effective date: Make the form effective with the first wage payment Internal Revenue Service.

See Nonresident Form W-4 worksheet with 5 fields when the file involves a nonresident alien employee. See Payroll intake review against 4 source guides alongside this employee-file review.

These four checks organize the employee file before the first payroll run. They confirm the identifier matches the federal requirement, the federal withholding paperwork is signed and valid, the relevant state certificate is present, and the start date is recorded. This workflow is editorial guidance for small accounting firms, not a claim that these steps exhaust all employment onboarding obligations.

The first check distinguishes the employee's Social Security number from an Individual Taxpayer Identification Number. The second check ensures a valid, signed federal withholding certificate is on file. The third check looks for the specific state withholding form, such as the California DE 4 or Minnesota W-4MN, without generalizing those requirements to other states. The fourth check records when the withholding instruction takes effect, differentiating new-employee defaults from replacement form timing.

Use this sequence to verify the file is complete before processing pay. If the identifier is an ITIN, the file fails the first check. If the federal form is missing or unsigned, the file fails the second check. If the state form is absent, the file fails the third check. If the effective date is unclear, the file fails the fourth check. The checks are a practical starting point for reviewing a new employee's documentation in a client payroll context.

When you open a new employee file for client payroll, the first identifier you verify is the Social Security Number.

An ITIN is a 9-digit number that begins with the number "9" and is formatted like an SSN (NNN-NN-NNN), according to Internal Revenue Service. The visual format is identical to an SSN except for the leading digit. If a number in the employee file starts with 9, it is an ITIN, not an SSN.

Practical step: Check the first digit of the identifier in the employee file. If it is a 9, the number is an ITIN. Do not enter it into the employee SSN field for payroll processing. Request the employee's SSN instead.

This check is one part of the four-point employee-file review.

If the employee cannot provide an SSN, do not substitute an ITIN. Return the file to the client with a note that the employee identifier is incomplete.

The fix is simple: verify the first digit, and if it is 9, ask for the SSN.

Before processing the first client payroll, verify that the employee's federal withholding certificate is physically present, fully signed, and free of unauthorized changes. The Internal Revenue Service advises employers to have a Form W-4, Employee's Withholding Certificate, on file for each employee to determine how much income tax to withhold from wages Internal Revenue Service. This requirement applies to every new hire, not just those with complex tax situations. The IRS specifically instructs employers to ask all new employees to give a signed Form W-4 when they start work Internal Revenue Service. If the signature line is blank, the form is incomplete.

First, the employee must provide a full social security number. An employee may not use a truncated social security number in completing the withholding allowance certificate, as defined in 26 CFR § 31.3402(f)(2)-1 Legal Information Institute. Second, the form must remain unaltered. Any alteration of or unauthorized addition to a withholding allowance certificate causes such certificate to be invalid, under 26 CFR § 31.3402(f)(2)-1 Legal Information Institute. If you find a marked-up form, request a fresh copy from the employee. Do not attempt to repair the original.

When reviewing the file, look for these three elements: * A clear, legible signature from the employee. * A complete, untruncated social security number. * No physical evidence of alteration, such as erasures, white-out, or handwritten additions.

Ask the employee to complete a new Form W-4. This is a procedural requirement for withholding calculation, not a determination of work authorization. For broader intake procedures, see the Accounting Client Intake Checklist for a Clear Handoff.

State withholding rules vary by jurisdiction, so the employee file must contain the specific certificate for the state where the work is performed. For Minnesota, the Minnesota Department of Revenue identifies Form W-4MN, Minnesota Employee Withholding Certificate, as the Minnesota equivalent of federal Form W-4 Minnesota Department of Revenue. This form links directly to the federal requirement because employees must complete Form W-4MN when they begin employment or when their personal or financial situation changes Minnesota Department of Revenue. Furthermore, if the employee completes a new Federal Form W-4, they must complete a Minnesota Form W-4MN Minnesota Department of Revenue.

For California, the California Employment Development Department requires a separate state certificate alongside the federal form. New hires and existing employees making changes to their withholdings must submit both the Form W-4 and the Employee's Withholding Allowance Certificate (DE 4) California Employment Development Department. The requirement applies to both initial onboarding and subsequent updates to withholding allowances. The absence of the DE 4 means the state withholding instruction is not documented, even if the federal Form W-4 is signed.

Do not generalize these specific form names or submission requirements to other states. Each state has its own rules, and the forms cited here are specific to Minnesota and California. If your client operates in a different jurisdiction, identify that state's specific withholding certificate and verify its requirements separately.

The effective date for withholding depends on whether the employee is new or submitting a replacement form. For a new employee, the IRS instructs employers to make the form effective with the first wage payment Internal Revenue Service. If a new employee does not provide a completed Form W-4, the IRS states that the employer should withhold tax as if the employee is single Internal Revenue Service.

For existing employees, the timing differs. The IRS specifies that if an employee gives a Form W-4 that replaces an existing Form W-4, the employer must begin withholding no later than the start of the first payroll period ending on or after the 30th day from the date the replacement form was received Internal Revenue Service. This 30-day window applies specifically to replacement forms and does not apply to the initial hiring scenario.

State rules follow similar logic but have specific defaults. In Minnesota, if a new employee does not provide a Minnesota Form W-4MN before the first wage payment, the Minnesota Department of Revenue advises that the employer should withhold tax as if the employee is single with zero withholding allowances Minnesota Department of Revenue. In California, if an employee does not give a properly completed state DE 4, the California Employment Development Department requires withholding state income taxes as if the employee were single and claiming zero withholding allowances California Employment Development Department.

California also addresses the status of older forms. The California Employment Development Department notes that employees who submitted a Form W-4 before 2020 are not required to submit a new form if they have no changes to their withholding allowances California Employment Development Department. This rule applies specifically to California withholding and does not change the federal replacement form timing rules described by the IRS.

When reviewing a file, record the date the form was received and the date withholding begins. For new hires, align the start date with the first wage payment. Do not assume that a missing federal form triggers the same state default without checking the specific state guidance.

The following table summarizes the specific forms and requirements documented by the Internal Revenue Service, the Minnesota Department of Revenue, and the California Employment Development Department. These entries reflect the distinct obligations for federal identification and state-specific withholding certificates.

A file shows a 9-digit identifier that begins with 9. That number is an ITIN, so do not enter it into the employee SSN field. Ask for the Social Security number instead.

A second file has a signed Form W-4 for a new employee. Make the form effective with the first wage payment. If that employee later hands in a replacement Form W-4, begin withholding no later than the start of the first payroll period ending on or after the 30th day from the date the form was received.

If the new employee has no Minnesota Form W-4MN before the first wage payment, withhold Minnesota tax as if the employee is single with zero withholding allowances. If a California employee gives no completed DE 4, withhold state income tax as if the employee is single and claiming zero withholding allowances. This walk-through is illustrative and names no employer.

Open one employee file the client already sent.

Can I put an ITIN in the employee SSN field?

No. The Internal Revenue Service states, "Do not accept an ITIN in place of an SSN for employee identification or for work," according to Internal Revenue Service. You must use a valid SSN for the employee record.

What if a new employee has not given the employer Form W-4?

If a new employee does not provide a completed Form W-4, the employer must withhold tax as if the employee is single. The Internal Revenue Service specifies, "If a new employee does not give you a completed Form W-4, then withhold tax as if the employee is single," according to Internal Revenue Service. This default applies until a valid form is received.

Does California require a separate withholding form?

Yes. California requires both the federal Form W-4 and the state-specific form. The California Employment Development Department notes that "New hires and existing employees making changes to their withholdings must submit both the Form W-4 and the Employee's Withholding Allowance Certificate (DE 4) (PDF)," according to California Employment Development Department. This requirement is specific to California jurisdiction.

When must an employee provide a new Minnesota W-4MN?

Employees must complete Form W-4MN when they begin employment or when their personal or financial situation changes. The Minnesota Department of Revenue states, "Your employees must complete Form W-4MN when they begin employment or when their personal or financial situation changes," according to Minnesota Department of Revenue. This timing rule is specific to Minnesota.

Do replacement federal forms always take effect on the next paycheck?

Not necessarily. The Internal Revenue Service explains that if an employee gives a replacement Form W-4, you must begin withholding "no later than the start of the first payroll period ending on or after the 30th day from the date you received the replacement Form W-4," according to Internal Revenue Service.