Payroll mistakes are some of the most expensive a small business can make, because penalties stack up fast. Use this checklist to stay on track.
When you hire
- Form W-4 (federal) and, for Oregon employees, Form OR-W-4
- Form I-9, with identity and work authorization checked within three business days of the start date
- New hire report to the state (Oregon requires it within 20 days of hire)
- Correct classification as an employee or independent contractor
- Exempt or non-exempt status for overtime
Every payday
- Withhold federal and state income tax, Social Security and Medicare
- Oregon: withhold the employee share of Paid Leave Oregon and the statewide transit tax
- Pay at least the minimum wage for your region; Oregon's rates change each July 1
- Pay overtime correctly for non-exempt employees
- Give employees an itemized pay statement
Deposits and filings
| What | When |
|---|---|
| Federal payroll tax deposits | Monthly or semiweekly, depending on your deposit schedule |
| Form 941 (federal quarterly return) | Last day of the month after each quarter |
| Oregon combined quarterly payroll report | Last day of the month after each quarter |
| Form 940 (federal unemployment) | January 31 |
| W-2s to employees and the SSA | January 31 |
| 1099-NEC to contractors and the IRS | January 31 |
Common mistakes
- Treating employees as contractors
- Late deposits (IRS penalties start at 2% and climb to 15%)
- Forgetting that owners of S corporations need to be on payroll
- Missing a state's new-hire, leave or local tax rule
- Poor records: keep payroll records for at least four years
More on Oregon-specific taxes in our Oregon payroll guide, or let us run payroll for you.
This article is general information, current as of September 2026, and is not tax, legal or financial advice for your situation. Tax rules change often. Talk with us before acting on anything here.