W2 vs W4 – What’s the Difference and How to Use Them?

Payroll is such a complex machine and one of the most crucial things to take care of is your taxes.

If you want to avoid penalties from the IRS, then you ought to get all your tax forms including W-4 and W-2 in the right order. If you’re not used to it though, just knowing the differences and how they function can be daunting.

It’s helpful if you have online tools just like a pay stub generator online, but even so it’s a good idea to be familiar with what your income tax forms will entail

You can create a W-2 Form Online now through clicking here.

If you want to know more, I’m gonna explain why W-4 and W-2 forms are paramount and how to tell the differences between each of them. 


Forms W-4 and W-2 are payroll forms that employers and employees are going to have to fill in eventually.

So making sure you’re familiar with them and trying to avoid some common mistakes are a great way to ensure that your filing of taxes in every pay period and given tax year are accurate.

Form W-4

Sometimes, this is known as the Employee’s Withholding Allowance Certificate, the W-4 form is something the federal gov requires to fill out for staff when they’re working a new job.

If you’re a business owner and you have employees, the IRS Form W-4 is your indicator of how much income tax you want to withhold from your employee’s paycheck.

Of course the calculations for these are their wage and how much their withholding allowances allow them for.

Make sure their income taxes are correct in any form you fill up you must ensure that all the information is correct so this is why it’s important to proof read.

w-2 form for 2021

Form W-2

W2 is also known as Wages and Tax Statements. Entrepreneurs are required to fill in this form and give them to their employees by the end of the tax year.

This document shows how much your staff was paid in the year and the income and FICA withholdings.

If an employee earns at least $600 in wages, you must file a copy of W2 together with their Social Security Administration or SSA. You must still perform this action even if there are no social security or medicare taxes you remit.


Now that you understand the fundamentals, it’s important to note what the key differences are between W2 and W4 especially for entrepreneurs.

The main thing to remember though is what the forms are and who fills them out.

W-4 Forms are Filled by Employees

W4’s still affect business owners though. This is because the form shows how much to withhold from a paycheck for taxes.

Employees can fill out their W-4 if their financial situation changes. If they are working on a new job with you, this may also include changes in their marital status.

If something such as an increase in salary occurs, then they must fill in this form too!

You will need this information because it also may indicate changes to their payroll taxes.

Once the W-4 of your employees are complete then you need to keep your own copy to ensure that you can also present it to the IRS.

Employers are Responsible for Filling in Form W-2

W-2 is not only used to inform how much tax you are remitting but it can also be used for record keeping.

These are the parts which are contained in a W-2 Form

• Gross pay of your employee
• Tips or bonuses
• 401k’s
• FICA and Medicare

You gather all this information and this gives the SSA an ARS a fuller picture of their income taxes.

W2’s are finished at the end of a tax year and W-4’s are filled in when they start their employment.

Entrepreneurs should complete their W-2’s in January 31 after the given tax year. If this is on a weekend or a holiday, the next date is the following business day.

And you also have to file the SSA before February ends together with your W-2.

Normally, employees finish their Form W-4’s after they get hired. This is also important because this form shows how much withholding taxes are remitted from their pay.

W-2 format of a pay stub generator


IRS forms can be rather intimidating when you look at them. But if you know the vital information then you can facilitate these things much faster.

These are one of the advantages of online check stub generators because they have dynamic values and the calculations are generally automatic! You no longer have to crunch the numbers yourselves, you just have to fill in the information, choose your state and marital status and the rest takes care of itself.

To make careful note of these things, here are some of the vital information on

Form W-4 considers Marital Status of your Employees

Employees who are single or if their partner is unemployed and don’t have dependents and only earn income from the same source need the following information on their IRS Form W-4:

Full name and address
Social security number
Marital status
The employment start date

You, their manager then will need to enter their full name, address and their EIN.

If an employee is filing jointly with their spouse, then there can be the Multiple Jobs WOrksheet which allows them to show their remittances in this way.

In this case, the employee and their spouse may need to fill in their form together with their respective employers.

Employees who have 2 jobs though between them and their partners have to complete sections 2 to 4 (b) on W-4 for the job which pays highest.

W-4’s generally come with their own guides to show the salary brackets from lower to higher paying jobs to make sure these calculations are much faster.


If employers are careful, they will also note how many dependents the employee has. This way you would know if they are eligible for child tax credits.

They ought to be earning less than $200,000 or less than $400, 000 if they file for these taxes jointly.

The formula then is No. of dependents x Child Tax Credit Amount and then you add that amount to line 3 on Form W-4.

If your employee has other dependents, make sure to remind them to review the IRS guidelines on what it considers dependents.

Other Withholdings

After employees have finished all the essential stuff on W-4, they may also specify if they want other amounts to be withheld.


It is important that though your free pay stub generator can help you fill in your W-2 most people commit some pretty common errors.

So we’re going to remind you of some of them so that you can avoid some of these common mistakes.

• Filling out a W-2 form that isn’t up to date and from the previous year
• Wrong spelling of a name or their tax payer identification number
• Using titles and periods and special characters in filling in the form
• Using colored ink in signing
• Not including your EIN
• Excluding the 401 or medicare from the W2 section


You and your employer should verify the income taxes to remit to avoid penalties. If a tax payer can’t commit, they might be subject to some IRS penalties.

This is why it’s important to be aware of the exact amounts. Sometimes the IRS could also charge interest.

We have W2 forms to make sure that you can make your filings easier. And our check stub maker performs it’s calculations for you!

Simply choose the pay stub template of your choice and remember after choosing the Employee State and filling in the full name in concern, it’s up to you to review the information and make sure everything is accurate.

You can get your W-2’s from us and take note of the information on the pay stubs of your employees especially their remittances and their vital information for government remittances.  If you have any questions, kindly contact us at info@paycheckstubonline.com