> ## Documentation Index
> Fetch the complete documentation index at: https://docs.shorpay.com/llms.txt
> Use this file to discover all available pages before exploring further.

# Tax Compliance

> How tax forms, withholding, and reporting work on Shor.

Tax is one of the messiest parts of global payroll, and one of the places most likely to go wrong if you try to handle it manually. Shor handles the routine cases automatically and keeps clean records for the ones that need human judgment.

## What Shor Does Today

<CardGroup cols={2}>
  <Card title="US Tax Form Collection" icon="file-invoice">
    At onboarding, Shor collects the right US tax form from each worker: W-9 (US persons), W-8BEN (foreign individuals), or W-8BEN-E (foreign entities). Stored on the worker's profile and accessible to the employer.
  </Card>

  <Card title="Statutory Withholding for EOR" icon="scale-balanced">
    For full EOR employment (where Shor employs the worker on your behalf), Shor applies the correct income tax and statutory contribution withholdings per the worker's country.
  </Card>

  <Card title="Record Keeping" icon="folder-tree">
    Every payment, contract, and tax form is stored with a clean audit trail. Exports are formatted for handoff to your accountant or tax software.
  </Card>

  <Card title="Sanctions and AML" icon="magnifying-glass">
    Every payment is screened against sanctions lists before it goes out, and unusual patterns trigger review.
  </Card>
</CardGroup>

## US Tax Forms Explained

If your business is US-based or you're paying US workers, tax forms matter. Shor handles the common cases:

<AccordionGroup>
  <Accordion title="W-9">
    For US persons (citizens, resident aliens, and US-registered entities). Required from any contractor before a US business can file a 1099 for them at year-end.
  </Accordion>

  <Accordion title="W-8BEN">
    For foreign individuals working for US businesses. Certifies their foreign status and claims any tax treaty benefits (e.g., reduced withholding rates).
  </Accordion>

  <Accordion title="W-8BEN-E">
    For foreign entities (non-US companies). Similar to W-8BEN but covers business entities rather than individuals.
  </Accordion>
</AccordionGroup>

Shor picks the right form based on the worker's tax residency and entity type, so you don't need to know which one applies.

## 1099 Reporting

For US employers paying US contractors, Shor handles year-end 1099 reporting end-to-end:

* Shor generates a **1099-NEC** for each US contractor whose calendar-year earnings cross the IRS reporting threshold
* Forms are filed with the IRS and delivered to each contractor in January or February for the prior tax year
* Both the employer and the contractor can access signed copies from their dashboard

The data needed (each contractor's W-9, the employer's info, and annual payment totals) is already on Shor, so there's nothing extra to pull together at year-end.

## Statutory Withholdings (EOR Employees)

For workers hired through Shor's full EOR product, Shor:

* Withholds income tax from each paycheck per the worker's country
* Remits employer contributions (pension, social security, health insurance) as required
* Files required tax returns with local authorities

The worker sees gross, deductions, and net on every pay stub. The employer sees total employer cost (salary + contributions + fees) before approving any payroll.

## Contractor Taxes

For independent contractors, Shor does NOT withhold tax. Contractors are responsible for their own tax filings in their country of residence. Shor helps by:

* Collecting the right US forms at onboarding (so US employers don't have to chase)
* Keeping clean payment records by company for easy tax filing
* Providing export files your accountant or tax software can use
* Issuing invoices and receipts with all the detail a tax authority would need

## Non-US Tax Filings

Shor doesn't currently file taxes in non-US jurisdictions for contractors. Workers are responsible for their own filings. But Shor makes this easier:

* Every payment has a clean receipt with amount, date, company, and reference
* Transaction exports by date range and by company
* Tax residency and identifying info stored on the worker's profile

Hand the export to a local accountant. Most are happy working from Shor's format.

## Compliance Updates

Tax rules change: thresholds shift, new forms are introduced, treaty benefits get updated. Shor monitors the changes and updates the platform. You don't need to track IRS or HMRC announcements yourself.

## What's Out of Scope (Today)

To be transparent about what Shor does NOT yet handle:

* Worker-country income tax filings for contractors
* Year-end tax form generation for countries other than the US
* Sales tax / VAT on invoiced services
* Personal tax advisory: Shor is not a tax advisor and won't tell you how to file your personal or business return

If any of these matter to your workflow, talk to your accountant or reach out to us about what's on the roadmap.

## Next Steps

<CardGroup cols={2}>
  <Card title="Data Privacy" icon="shield-halved" href="/platform/data-privacy">
    How tax data is protected.
  </Card>

  <Card title="Global Coverage" icon="earth-americas" href="/platform/global-coverage">
    Where Shor supports workers and businesses today.
  </Card>
</CardGroup>