How Do I Report Income from Employee Commissions on a W2 Form?

Report income from employees’ commissions in Box 1: Wages, Tips, and Other Compensation on a Form W2. File a copy of the completed W2 form with the Social Security Administration. Send a separate copy to the applicable employee so that they can manage their taxes. Enter an employee’s commission as their income on Form 941. The Internal Revenue Service requires all employers to make periodic payments of these specific taxes on the quarterly payroll tax report. Remember that how you report income from the employees’ commissions differs from reporting non-employee commissions. Report any contractor commission payments on Form 1099-NEC. Provide the form to the relevant payee and to the IRS.

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