W2 vs W4

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The main difference between Forms W-2 and W-4 is who completes the paperwork and fills them out. While the employers complete Form W-2, the employees complete Form W-4. 

W-2 and W-4 are among the many IRS tax forms used by businesses for their employees to help follow the pay-as-you-go (PAYG) tax system in the United States. These forms are filled out to tell the employer how much tax must be deducted from the employee’s income. 

W2 vs W4

tells the employee their gross pay and tax withholding for the fiscal year (FY)Meaninghelps the employer know how much tax to withhold from their employee’s paycheck
filled out using payroll data for the yearCompleted Byfill out a W-4 form with their personal information and withholding allowances
filled out by the employer every year by January 31When Is Each Form Completed?fills out W-4 while joining a new job as a part of its hiring paperwork
sent to the IRS for each employee by the employerSent Tokept as a document to refer to each year during payroll and while filing Form W-2

What is the W2 Form

The W-2 is an IRS (Internal Revenue Service) form that an employer sends to their employee and the IRS at the end of each year. It stands for “Wage and Tax Statement,” which represents the employee’s annual income and the tax amount that must be deducted from their paycheck. 

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Items on a W-2 Form

  • Employees’ paid wages
  • Tips
  • Compensation and benefits of the business
  • Amount of federal, state, and local income tax
  • Social security administration 
  • Medicare tax withheld 

Every business owner fills the Form W-2 for each employee who was paid at least $600 for the tax year. 

At the end of the year, that is, every January or early February, an employee receives a Form W-2 from their employer. If an employer fails to do so, they are liable to pay the penalty.

According to IRS, form W2 is also an international return because it informs several important entities about your earnings and the amount of tax you have paid that year. 

These entities include:

  • Federal government
  • State and local government
  • You

Important Sections on the W2

  • Employer identifying information
  • State income tax paid
  • Wages, tips, and other compensation
  • Retirement contributions paid
  • Social security and medicare payroll taxes paid
  • Local income tax paid
  • Employee’s social security number
  • The name and address of both the employee and the employer
  • Adjustments to income such as 401(k) contributions

The W2 form also shows how much federal income tax is paid. 

w2 vs w4

What is the W4 Form

The W4 form is an employee’s withholding allowance certificate. It gives information to employers on how much income tax to deduct from an employee’s pay. 

It’s mandatory for each employee to properly fill out this form on the first day of employment and update it if any further changes occur. 

This form contains tax filing status such as single, married filing jointly, married filing separately, or head of the household. 

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Also, this form includes information such as additional job details, details of a working spouse, etc. As an employer, you can use the information in the W4 form to calculate the correct federal tax to deduct at the payroll time. 

New employees cannot use the previously filled W4 form. Social security is an exemption here. 


Parts of the W4 Form 

  • Name
  • Address
  • Social security number
  • Marital status (i.e., married or unmarried)
  • Multiple job or spouse’s work information (if applicable)
  • Number of dependents (if applicable)
  • Adjustments (if applicable)
  • Signature
  • Employer’s name and address
  • Employee’s first date of employment
  • Employer Identification Number (EIN)

W2 vs W4 – Key Differences 

W2 and W4 forms are important IRS forms that employees and employers should file on time. They might seem similar but have significant differences. 

Here the difference between Forms W2 and W4 is mentioned based on various parameters. 


Form W2 tells the employee their gross pay and tax withholding for the year. On the other hand, Form W-4 helps the employer know how much tax to withhold from their employee’s paycheck.

Completed By

Employees fill out Form W4 with their personal information and withholding allowances. 

The employer’s Form W2 is filled out using payroll data for the year.

When Is Each Form Completed?

The employee fills out W4 during onboarding as a part of hiring paperwork.

Form W2 is filled out by the employer every year by January 31.

Sent To

Form W2 is sent to the IRS for each employee by the employer. In contrast, Form W4 is kept as a document to refer to each year during payroll and while filing Form W2. 

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The bottom line is that both IRS Forms W2 and W4 are important for employees and employers. They are related to taxes and have different purposes. 

In simple terms, W4 is an input document, while W2 is an output document. 

While Form W4 gives details of the employee and how much tax needs to be withheld from the employee’s paycheck, Form W2 lets the IRS and employee know the income and amount of tax being deducted. 

Having an understanding of these forms can prevent you from tax penalties.  

If you found this article helpful, check out our post on 401k vs 403b.


Vanessa is passionate about written communication, especially after beginning her career as a middle school English teacher. She’s an experienced content marketer as well. Vanessa loves to analyze, compare, and contrast, which is why she writes for ContrastHub. Besides writing, Vanessa is a wife, mom, entrepreneur, spicy food enthusiast, comedy nerd and lifelong learner.

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