Cloud-based technology has opened up a wide array of options for businesses when it comes to upgrading payroll methods and offering employees direct access to their payroll information. The cloud has enabled employers to deliver pay and tax information faster, easier and more securely than ever before. Traditionally, in January, employers were saddled with the responsibility of distributing paper W-2s to their employees. Today, businesses have alternative options with respect to W2s thanks to cloud-based technology. One simple upgrade is the electronic distribution of W-2s!
The conventional method of hand delivering or mailing paper W-2s has its limitations. To begin with, employers must wait for the paper W-2s to be delivered. Upon delivery the W-2s need to be stored securely, accounted for, organized, and distributed to employees. The process is time-consuming, especially for medium to large size businesses. If a W-2 is lost, additional time and energy are needed to provide a replacement to the employee. Then, there are the odd requests for copies of past W-2s throughout the year by employees to back mortgage and car loans, etc. Employers need to be on top of their accounting and record keeping systems when issuing paper W-2s.
Why Are Electronic W-2s So Much Better?
The alternative to paper W-2s is electronic W-2s. The biggest advantage of electronic W-2s is the delivery method - it's instant and direct to the employee. There is no middleman – payroll/HR and managers are taken out of the equation - improving efficiency and effectiveness. Employees can access their W-2s as soon as they are available. It is securely stored in the Employee’s Self-Service (“ESS”) portal where they can access it for as long as the employer choses to have it available. If employees are given mobile access to their self-service portal, they can access their W-2 (1095s, 1099s), day or night, seven days a week. Employees no longer have to keep track of a piece of paper! The W-2 may be printed as many times as needed. Should an employee leave the company, a paper W-2 will be issued by the payroll company and forwarded by the employer to the employee. In many cases, former employees can still access their partner portal and their electronic W-2 for as long as the employer choses to make it available. Electronic W-2s are also contactless and paperless making them an environmentally friendly solution which also helps promote health and wellness in the office.
How to Set Up Electronic W-2s?
Providing electronic W-2s to your employees is a relatively simple procedure for your payroll company to initiate. Each employee will need an ESS portal which securely houses all their payroll, tax, and benefits information. To set up an ESS portal, employees need to provide an email address. Next your employees will be sent an email asking them to “opt-in” to electronic W-2s. Once the employee agrees to electronic distribution of their W-2, the rest is up to your payroll company. In January when the employee’s W-2 is ready, they will receive a message in their ESS portal notifying them that their W-2 is “Ready to View”. Saving the employer valuable time and money while empowering employees with access to their payroll and tax information. To increase your efficiencies one step further, you may want to consider adding the option to opt-in to electronic W-2s during onboarding for new hires. A win-win for all parties!
Best Decision to Switch!
Switching to electronic W-2s allows your business run more productively and thus more profitably! And by setting up your employees with an ESS portal you are giving your employees the satisfaction, and peace of mind, of being able to access their tax and payroll information 24/7. To stay ahead in business, you have to constantly adapt and reassess. Moving to electronic W-2s takes little effort and has big pay offs down the road.