Payroll Tax Filing Services: What Netchex Handles and What You Handle
For full-service clients, Netchex runs payroll tax filing services as part of payroll. We deposit and file federal, state, local, and unemployment taxes, reconcile them every quarter, and prepare W-2s and 1099s at year-end. A few decisions stay with you, like which taxes to withhold and which agencies to register with. This page shows exactly where that line sits, so nothing surprises you after you sign.
Last updated: October 8, 2026
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We Handle
- Federal, state, and local deposits
- Unemployment tax (SUTA & FUTA), filed quarterly
- Quarterly returns in all 50 states
- Reconciliation every quarter
- Year-end W-2s and 1099s
You Decide
- Which taxes to withhold
- Which agencies to register with
- The account numbers and rates you provide, which we verify
- Corporate and business taxes stay outside payroll
What full-service payroll tax filing includes.
Payroll tax is the part of payroll where small mistakes turn into agency notices. Here is what we take off your plate. See how it fits into the wider Payroll and Tax product.
| What we do | What it means for you |
|---|---|
| Federal, state, and local deposits | We calculate what you owe each pay period and deposit it on the schedule your agencies assigned. |
| Unemployment tax | We file and pay state (SUTA) and federal (FUTA) unemployment taxes quarterly. The IRS explains the federal return on Form 940. |
| Quarterly returns | We prepare and file your quarterly payroll returns in all 50 states, including federal Form 941. IRS Publication 15 sets the deposit schedules. |
| Reconciliation | Each quarter you get a Reconciliation Recap that lists what you owed against the deposits we made. |
| Year-end forms | We prepare and file W-2s and 1099s. See our guide to W-2 and 1099 reporting. |
| Rate updates | When a state sends a new unemployment rate notice, you upload it and update the rate yourself from Tax Settings. It takes effect as soon as you save. |
Four things have to go right first.
Filing is only as accurate as the information behind it. Every full-service setup depends on four things.
Accurate company and employee data
Your FEIN, legal name, contact, W-2 shipping address, and every employee’s name, SSN, and address.
Company tax verification
Active tax codes, agency account numbers, deposit frequencies, and assigned unemployment rates, all checked against what your agencies have on file.
An accurate balance import
Year-to-date payroll for every employee, including terminated employees and people on leave.
POA and TPA
A Power of Attorney lets us act for your taxpayer account. Third-Party Administrator access lets us file and pay on agency websites that require it.
Walk through the full process in our payroll tax onboarding guide.
What you decide, and what we handle.
Netchex files and pays. You decide what gets withheld and which agencies you register with, because those decisions depend on facts only you have.
| Area | Who owns it | How it works |
|---|---|---|
| Which taxes to withhold | You | Owners and admins set state withholding, unemployment, and local taxes. We can share written guidance from the American Payroll Association, and we recommend confirming with your CPA or business attorney. |
| Registering with tax agencies | You | Agency applications ask for company details only the owner or admin has, so you complete them. |
| Agency account numbers and rates | You provide, we verify | Send us your account numbers and rate notices. We confirm them in your Company Tax Verification Report. |
| Deposits, returns, and W-2s | Netchex | Full-service clients get all three from us, on the schedule each agency sets. |
| Corporate and business taxes | You | Our tax services cover payroll tax. Corporate returns such as excise, sales, and franchise tax are outside payroll. |
Payroll tax is not the same as every business tax. That distinction is one of the most common sources of confusion when employers compare providers.
Paid family and medical leave.
We support state-sponsored paid family and medical leave (PFML) programs and private paid leave plans.
For state-sponsored programs, we collect and pay the premiums, and the liability is handled the way a tax would be. A private plan can work differently. Depending on the plan, the amount may be set up as a payroll deduction that you remit to your provider. Your implementation manager confirms which setup applies to your plan before your first payroll.
Each state’s rates and rules live in our State & Local Tax Guides in the Resource Center.
Special reporting situations.
A few setups need a conversation before go-live. Tell your implementation manager about them early and we will plan around them.
Washington L&I is based on hours actually worked
Employers can use certain earnings codes to track hours that are not hours actually worked, such as paid but non-productive time. We have no way to know which of your earnings codes reflect real work, because that information sits with you, not in the system. Mark which earnings codes record productive hours so only those count toward Washington L&I.
One unemployment filing per FEIN
We file one unemployment return per FEIN. If you hold separate unemployment account numbers under one FEIN, for example separate Florida accounts for individual locations, we cannot file a separate return for each. For accounts we cannot file, you file and pay unemployment directly, using the SUTA tax liability report we provide.
If you want to file your own taxes.
You can run payroll with Netchex without us filing or paying your taxes. In that setup you stay responsible for your own deposits and filings. You can still choose to have us prepare your W-2s and submit them to the Social Security Administration.
One distinction matters here. Federal W-2 filing with the SSA does not include state W-2 filing. When we are not filing your state returns, you prepare and submit your state filings and state W-2 information yourself.
How we get access to your agency accounts.
Two documents make filing possible.
Power of Attorney (POA)
Gives us authority to act for your taxpayer account and, depending on the agency, to review correspondence, rates, and balances and file returns electronically.
Third-Party Administrator (TPA)
Designates us as your authorized representative on an agency’s website. Some agencies require it before anyone can file or pay for you, so we ask for it during onboarding.
Details and timing are in the onboarding guide.
Ready to see it in your setup?
Tell us your states, your agencies, and how you file today. We will map what moves to Netchex and what stays with you.
Get a Demo