If you’re planning on starting a staffing agency, there are a lot of forms you need that vary by the state you’re located. You’re selling a service and new clients are frequently being added to your system (or at least that’s the goal). As a business owner, you’re also responsible for filing tax forms for your staffing company and other paperwork to meet requirements for your state and federal government. We’ve compiled a list of important documents and forms employment agencies need to have when they’re starting and fully operating.
Tax and Employment Forms Your Temp Agency Needs
1. Employer Identification Number (EIN)
This is for tax administration purposes and you can apply through the IRS on their website. To apply for an EIN as that business owner you need to have a valid taxpayer identification number, which can be your social security number. By applying online, you’ll automatically receive your EIN number and confirmation, which can be downloaded or printed. You’ll want to save it somewhere safe and convenient for reference.
2. State Tax ID
In addition to your EIN, you’ll need to obtain a State Tax Identification to pay income taxes to your state, versus the EIN, which is used for federal purposes. Although the purpose is similar, both numbers are needed for various tax forms for your staffing agency because they serve different purposes.
3. I-9 Form
This is used to verify an employee’s identity and establish that he/she can accept employment in the United States. There are different sections in this form that can get a little confusing to fill out. As the staff agency owner, you’ll want to make sure that Section 1 is completely filled out (nothing blank). As for Section 2, it’s very important that you let the employee choose which documents they choose to present and don’t ever recommend an option.
4. Job Application
Depending on the type of positions your employment agency is going to be filling for clients, you’ll need an application that suits your business. If you want to offer an application online, remember to have a section for a resume to be uploaded. This will encourage people to use your agency because of the easy process.
Some other sections you might want to include would be for the potential employee’s personal and contact information, emergency contact information for their future employer, employment preferences (maybe a specific job number) and availability for your company to filter them through clients. You’ll want a section for employment history, so you know their experience and qualifications as well as references. There are plenty of templates online that you can base your application off of.
5. Staffing Agency Agreement
This is a contract between the client and your company, which can be tailored and edited to fit your needs as the temp staff agency. It establishes a set of responsibilities for both parties to ensure what should be done will actually happen.
For example, your staffing firm might promise to recruit, interview, and background check all employees prior to the first day of work, pay the assigned employee correct wages, handle payroll taxes and require employees to sign a confidentiality agreement. For the client’s duties, you may want to include that they will properly supervise assigned employees, provide a safe worksite and not allow the assigned employee to change tasks without first notifying your company. You’ll want the client to sign and date the contract. You can find some example agreements online to help create yours.
6. W-4 Form
Each employee hired through your agency will need to complete this IRS form to establish how much money to withhold from their paycheck for federal taxes. It is also referred to as the Employee’s Withholding Allowance Certificate.
7. 941 Form
Commonly known as the Employer’s Quarterly Federal Tax Return, the 941 form is used for your staffing company to withhold social security tax income and Medicare taxes. It’s also used to pay your portion of social security and Medicare tax. The deadlines for this are April 30, July 31, October 31 and January 31 of each year. Don’t miss these dates because the IRS will penalize you by charging a percentage or your underpayment and as a starting business, you won’t want any additional charges you don’t need.
8. Additional Documentation
As mentioned, the paperwork for a staffing company that is needed to legally and officially operate depends on each state. You can visit your state government’s website to find additional information and forms you’ll need. Some of these might be more specific tax forms for example. The IRS has a list of all the official state websites that can help you find more information.
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