Note about Restricted Features
We are always expanding our list of features in Zenefits Payroll, but you can use this guide as an overview of features that we currently do not support (states, company types, etc.).
Please note that this is not an exhaustive list, and that we try our best to discover upfront any specific restrictions that may apply to your group.
We encourage you to check back frequently!
Industry Type limitations to be aware of
Zenefits supports the following types of businesses, with some limitations to be aware of.
Restaurants (including tipped employees)
Zenefits is able to support cash and credit card reported tips in the following ways:
- Cash tips are processed by creating a new Reported Tips earnings pay type and adding the new type to worker pay stubs. The Reported Tips earnings pay type calculates the taxes to be withheld on tips but does not contribute toward net pay.
- Credit card tips are processed in two parts:
- First, credit card tips are processed under the Reported Tips pay type in order to be taxed and reported correctly on filings /W-2s as tips.
- Then, on a separate off-cycle pay run, tip amounts are paid out to employees using the Reimbursement earning type. The Reimbursement earnings pay type is non-taxable and will ensure workers’ tips are not taxed twice when paying them out.
- We support the calculation of uncollected tax—if the worker doesn't have enough income to withhold against, we'll record it and attempt to collect taxes in subsequent pay runs. If the uncollected tax is still in arrears at the end of the quarter, we'll update the Federal Form 941 accordingly.
Note: We don’t support tip credit, tip minimum wage, or tip reporting calculations, and don’t complete the annual employer report.
Religious institutions (including employees who are clergy members)
Zenefits doesn't have a feature for admins to set company level exemptions for Social Security or Medicare taxes in the Company Profile. If employers need to ensure that employees are not taxed for Social Security, Medicare, or any other tax type, the payroll administrator can do the following:
Set and manage exemptions on the individual employee profile in Zenefits
Set up the employer portion for these taxes on the employee profile as a separate entry from the employee exemption
Cannabis or Crypto companies
Zenefits banking partners for payroll and FSA are federally insured, national institutions that must comply with federal law. As a result, we are unable to support cannabis or crypto companies due to the the regulations of our banking partners.
Federal Tax Filing Type
Companies who need to file non-standard IRS tax forms - such as the Form 943, Form 944, and Form 945 are not supported in Zenefits Payroll. Additionally, tax filings for companies from multiple jurisdictions (more than one work location) are not supported in Payroll.
"Unity of Enterprise" Company
A "unity of enterprise" company is defined as a company using the same Employer Development Department (EDD) number as another company with a different Federal Employer Identification Number (FEIN). This often occurs when:
- The company using the same EDD number has the same ownership as another company
- The company is a branch or subsidiary of another company
- The company changed structure (if the previous company had any payroll this calendar year)
At this time, unity of enterprise companies are not supported on the Zenefits Payroll platform.
Courtesy Withholding in Zenefits Payroll
Zenefits Payroll does not support an opt out of courtesy withholding. This means you will need to be registered in every state that you have an employee either living or working in. If you have a state employees live in but do not work in, then you will only need to register for withholding (income) tax, not unemployment taxes in that state.
Please note that registering to pay payroll income tax does not necessarily obligate your company to register and pay business or sales tax in that state.
There is more information about which states are currently supported by Zenefits Payroll here.
Companies with 100 or more active employees (including full-time and part-time employees) should chat with the Sales team about their eligibility to use the Zenefits Payroll. If you're not already in contact with Sales, you can reach them at (888) 249-3263.
Unavailable Features in Zenefits Payroll
Zenefits Payroll does not support the following items:
- Custom tax calculations withholding
- Tax exemptions for military spouses
- Custom tax filing
- Expedited payroll processing time
- "Grossing up" checks (having the Zenefits system calculate backwards to determine gross salary and taxes)
- Piece rate earnings
- Certified payroll
- International bank accounts for both companies or employees
- Garnishment automation (filing garnishment paperwork and remitting payments)
- Check stuffing (mailing out paper checks to employees)
- Line items (tax specific) such as non qualified stock options, non standard deferred compensation plans, adoption assistance earnings types, and adoption assistance cafeteria plan contributions
- Payroll only administrator roles
- Pay-as-you-go workers' comp insurance
- Pre-tax Disability Deductions (STD or LTD)
- Children on payroll aged 14 and under
- Tipped employees*
- Employer paid employee taxes
- Minimum wage enforcement
- TexArkana Tax Exemptions
- Clergy tax exemptions
- Less than 7 days in arrears for Time & Attendance in Payroll
- Certified payroll
- Common paymaster(s)
- Custom assignment of employees to pay schedules
- International payroll; or payroll for companies based outside of the continental US
- Multiple EINs (Employer Identification Numbers) in a single account
- Multiple payroll bank accounts in a single account
- Projecting/approving pay before a pay period ends
- Recent legal name changes
- Shared tax IDs
- Transactions requiring $0.00 net pay
*Limited reported tips functionality available upon request.