What do other HR terms mean? HR Glossary


The W3 form, often referred to as the Transmittal of Wage and Tax Statements, is a crucial document mandated by the Internal Revenue Service (IRS) within the United States. This form plays an integral role for employers, as it is used to report their employees' wage and tax information. The primary function of the W3 form is to encapsulate and present a summary of the details listed on individual W2 forms for each employee.

As part of the standard payroll process, employers are required to submit the W3 form to the Social Security Administration (SSA) and the IRS, concurrently filing copies of every employee's W2 form. The W3 form offers a comprehensive overview of the total wages earned, taxes withheld, and other relevant information pertaining to all employees during a specified tax year.

What Is A W3? 

A W3 is a form utilized by employers to report the cumulative wages and taxes withheld from their employees during a specific tax year to the IRS. The form serves a dual function, first, it reconciles the data reported on Forms W-2 and 1099-MISC with the information on the employer's federal income tax return. 

Second, it records the overall sum of federal income tax, Social Security, and Medicare taxes withdrawn from employees. Moreover, any employer who distributes more than one Form W-2 to employees is obligated to complete and submit this form as it consolidates their total salary payments and withholding amounts.1

Understanding and managing these forms can be complex, and that's where we come in. At BrightMove, we are dedicated to simplifying your hiring process, including helping you manage your tax documentation requirements. To learn more about how we can assist you with your hiring and HR needs, we encourage you to visit our contact page and get in touch with our team of experts.

What Is The Importance Of W3? 

The W3 form carries significant importance for both employers and employees. For employers, it ensures the accurate reporting of wages and taxes on the employee’s W2 form, aiding compliance with the IRS. This form also provides a precise record of wages and taxes paid to the employee, which can be crucial for audit purposes. 

The W3 form helps report total wages and taxes to the IRS, a process that calculates the employer's federal unemployment tax liability. On the employee's side, the W3 form delivers an accurate wage and tax record, enabling verification of their W2 form and assisting in the individual income tax return filing. 

It also provides a means to confirm the employer’s payroll record's accuracy, ensuring proper accounting of their income and tax deductions.

Who Is Required To File A W3 Form? 

All employers are mandated to file a W3 form with the IRS annually. The purpose of this requirement is to report the total wages and taxes withheld from their employees. The W3 form serves as a yearly summary of all W2 forms issued to employees, detailing the total number of employees, total wages paid, total taxes withheld, and total Social Security and Medicare taxes withheld. 

It is obligatory for employers to file a W3 form for any year in which they issue W2 forms to employees, encompassing employers with payroll employees and those paying independent contractors. This requirement applies irrespective of the number of employees and the form must be filed by the end of the year.

Why Does The IRS Require Employers To File Form W3? 

The IRS mandates employers to file Form W3 as a mechanism for accurately reporting the total wages, tips, and other compensations paid to employees within a year. This form additionally enables the reporting of total taxes withheld from employee wages, including federal income tax, Social Security tax, and Medicare tax. 

Form W3 plays a crucial role in ensuring that employers are correctly withholding and submitting taxes to the IRS. Moreover, it helps reconcile the totals stated on the employer’s annual tax return with those reported on the employees' W2 forms.

What Are The Required Information For W3? 

Form W3 is a document used to report the total wages and taxes withheld for the year. It is a summary of all the W2 forms you have issued to your employees. It is important to provide accurate information on the W3 form to ensure proper filing of taxes.

Business Details 

Details about the employer who is submitting the W3 form constitute business details. This encompasses the employer's name, address, and employer identification number (EIN). The employer needs to provide a thorough and accurate depiction of their business entity, be it a sole proprietorship, partnership, corporation, or LLC. 

Moreover, the contact details of the individual responsible for the form's filing, including their name, title, and phone number, must also be furnished. The IRS requires this information to authenticate the employer and verify the form's details.

Total Taxable Wages 

Total taxable earnings consist of an employee's gross earnings before any deductions. It encompasses wages, salaries, bonuses, commissions, and other compensations. The IRS is informed of total taxable wages via Form W2, which helps calculate the federal income tax to be withheld from an employee's salary. Total taxable earnings are used to determine the employee's Social Security and Medicare contributions.

Total Wages 

The sum of wages includes all monetary payments made to an employee for services rendered within a specified period. It incorporates the employee's regular wages, tips, bonuses, commissions, and other compensations like vacation pay, excluding deductions such as taxes, insurance, or 401k contributions. 

Total Income Tax Withheld 

The total withheld income tax is the federal income tax amount that an employer withholds from an employee's wages. This amount, reported on the employee's W2 form, also needs to be reported on the W3 form. 

The employer is responsible for withholding the correct income tax amount from the employee's wages and remitting it to the IRS. The employee's filing status, allowances, and wages determine the withholding amount. Employers must ensure the accuracy of the income tax withheld to avoid any discrepancies.

Total Social Security Tax Withheld 

The total withheld Social Security tax is the amount deducted from employee wages to fund Social Security benefits for retired workers, their families, and those eligible for disability and survivor benefits. 

Employers must withhold this tax from employee wages, match it with their contribution, and report the total to the IRS on Form W2. The withholding rate is set by the Social Security Administration and is based on the employee's wages.

Total Medicare Tax Withheld 

The total withheld Medicare tax is the amount employers deduct from their employees' wages for Medicare taxes. This amount, which is based on the employee's wages, is reported on Form W3. It's important to note that the total withheld Medicare tax is not equivalent to the due Medicare tax. 

Instead, it represents the amount of Medicare tax subtracted from the employee's wages to offset the total Medicare tax owed. The IRS calculates the total Medicare tax due based on the employee's wages and filing status. Employers are obliged to report the total amount of Medicare tax withheld from their employees' wages on Form W3.2

Where To Submit W3 Form? 

Fulfilling the obligation to submit a W3 form is a vital element in the employer's payroll process. This form presents a summary of the total wages paid to employees and taxes withheld. Employers need to forward a W3 form to both the SSA and the IRS.

E-File Online 

Employing the electronic filing (e-filing) method to submit your W3 Form to the IRS is the most convenient and secure way. It's a quick, simple process that necessitates minimal input from your side. After filling in the necessary information, you just have to submit the form and wait for IRS processing. 

An email confirmation will alert you once your filing has been completed. Not only is e-filing the most economical method, as it doesn't incur additional fees, but it also allows you to monitor your filing status online and amend any errors before submission.

Submit Via Mail 

Submission of a W3 form via mail is a straightforward task. Initially, download the form from the IRS's website and fill in the required details like business particulars, total taxable wages, total income tax withheld, total Social Security tax withheld, and total Medicare tax withheld. 

After completion, print and send the form to the address specified on the form. It's crucial to retain a copy for your records. If you commit any errors while completing the form, you'll need to restart the process. Ensuring the accuracy and currency of the provided information is paramount as the IRS doesn't accept erroneous entries.

Hire An Accountant For Filing 

Opting to engage an accountant for filing the W3 form can be a prudent step towards guaranteeing its timely and accurate submission. An accountant can provide professional insights on the optimal ways to complete the form and ensure the provided information's precision. They can also offer valuable advice on potential tax reduction strategies and ensure compliance with IRS rules. By involving an accountant, employers can rest assured that their W3 form is filed correctly and promptly, thereby mitigating the risk of potential penalties or fines.

When Should You Submit A W3 Form? 

A W3 form must be submitted to the SSA by the end of January of the year following the calendar year in which employee payment was made. To illustrate, if payments were made in 2020, the W3 form should be submitted by the end of January 2021. 

This deadline also applies to providing W2 form copies to employees and the IRS. Employers without employees in the calendar year aren't required to submit the W3 form. However, if they have had any employees during the calendar year, a W3 form must be submitted regardless of wage reports.3

How To Make Changes In The IRS W3 Form? 

To make alterations to an IRS W3 form, the employer must initially acquire a copy of the original form, which can be downloaded from the IRS website or directly requested from the IRS. The employer then needs to completely fill out the form, implementing necessary amendments such as changes in the employer's name or address, total wages, total taxes withheld, and other pertinent details. 

Upon completion and signature, the form should be submitted to the IRS. The IRS reviews the submitted form and carries out any required corrections. 

If approved, the employer receives a notification from the IRS; if not, the employer must make further amendments and resubmit the form. The employer needs to retain a copy of the original form in case of any discrepancies between the form and the IRS, protecting the employer from potential liability for form errors.


What is the difference between W2 and W3 forms? 

The main difference between W2 and W3 forms is that W2 forms are used to report wages and taxes withheld from an employee’s pay, while W3 forms are used to report the total wages and taxes withheld from all employees for the year. The W2 form is issued to each employee, while the W3 form is filed with the Social Security Administration.

Where can you get W3 forms? 

W3 forms are available online from the IRS website or from a business’s payroll service provider. Businesses can also purchase blank W3 forms from a local office supply store or from an online vendor.

Is a W3 the same as a 941? 

No, a W3 form is not the same as a 941 form. A 941 form is used to report federal income taxes withheld from employees’ wages. The W3 form is used to report the total wages and taxes withheld from all employees for the year.

Is filing a W3 mandatory? 

Yes, filing a W3 form is mandatory for all businesses that have employees. Businesses are required to file the form with the Social Security Administration each year.

What is the penalty penalty for not filing W3 form? 

The penalty for not filing a W3 form is a fine of up to $50 per form. Businesses can also face additional penalties for not filing the form on time.

Can W2 and W3 be handwritten? 

No, W2 and W3 forms must be typed or computer-generated. Handwritten forms are not accepted by the IRS.

Where do I find W3 in QuickBooks? 

The W3 form can be found in QuickBooks by navigating to the Reports tab and selecting Tax Forms. The W3 form is found in the W2 and W3 Forms section.


  1. What is a W-3 Form? | BambooHR. (n.d.). www.bamboohr.com. Retrieved June 14, 2023, from https://www.bamboohr.com/resources/hr-glossary/form-w-3

  2. What is IRS Form W-3? (n.d.). www.waveapps.com. Retrieved June 14, 2023, from https://www.waveapps.com/education-center/form-w-3

  3. What is a W-3 Form & How to Fill It Out Online? (2023, January 1). PdfFiller Blog. https://blog.pdffiller.com/how-to-fill-out-irs-form-w-3/