How and When Do I Make Payroll Tax Deposits?

Monthly Deposit Schedule vs. Semi-weekly Deposit Schedule

When to Make Payroll Tax Deposits
When to Make Payroll Tax Deposits. Thomas Winz/Getty Images

This article discusses the process and timing for sending payroll tax deposits to the IRS. 

What are payroll taxes?

First, let's define what is meant by "payroll taxes." They are the taxes you must pay on your payroll:

  • Those federal income taxes you withheld from your employees' paychecks,
  • The FICA taxes (Social Security/Medicare taxes) you withheld from employees and the matching amount you set aside from that payroll to be paid by your company, and

How the IRS Determines Payroll Tax Deposit Dates

The IRS determines the payroll taxes deposit schedule for employers based on their total gross Social Security/Medicare liability for the twelve-month period ending on the most recent June 30. This time period is called a look-back period.

How is the Look-Back Period Determined? 

look-back period is the time and amount used to which method you must use for your payroll tax deposit. The IRS says it's  the total amount of employment taxes reported by the employer in the twelve-month period ending the preceding June 30. So, the payroll deposit schedule you use depends mostly on the amount of payroll taxes you owe. 

Finding  Your Total Payroll Tax Liability

The best way to find the figures for your payroll taxes paid during the look-back period is to look at the 941 Forms (the Quarterly Wage and Tax Return) for each quarter.

Go to Line 10: Total Taxes After Adjustments. Adding all four 941 forms together will give you the amount used to determine your tax deposit schedule. 

Determining Your Payroll Tax Deposit Schedule

  • If you are a new employer and you did not have employees during this "look back" period, you are a monthly depositor
  • If your payroll tax obligation is less than $2500 in a quarter, you can deposit these taxes with a "timely filed return" (assuming a Form 941).
  • If your total payroll taxes for the "look back period" were $50,000 or less, you are a monthly depositor
  • If your total payroll taxes for the "look back period" were more than $50,000, you make deposits on the semi-weekly schedule.

More on Tax Deposit Dates

  • Monthly deposits must be made by the 15th day of the following month. So your payroll deposit for March must be made by April 15.
  • Semi-weekly deposits are made on the following schedule:
    • Deposit taxes from payrolls paid on Saturday, Sunday, Monday or Tuesday by the following Friday
    • Deposit taxes from payrolls paid on Wednesday, Thursday or Friday by the following Wednesday.
  • If your payroll tax obligation is $100,000 or more, you must deposit the next day and you must continue to make next-day deposits for the rest of that year and the following year.
  • Deposit errors are not penalized if they don't exceed $100 or 2% of the amount of employment taxes required to be deposited. You must make up the balance due by a pre-defined make-up day in order to avoid further penalties.
  • If a deposit is required to be made on a day that is not a banking day, the deposit is considered timely made if it is made by the close of the next banking day. In addition to federal and state bank holidays, Saturday and Sunday are treated as non-banking days.
  • Semiweekly depositors have at least three banking days following the close of the semiweekly period to deposit taxes accumulated during the semiweekly period.

How to Make Federal Payroll Tax Deposits

The IRS requires that all payroll tax deposits be made electronically, using the  EFTPS Online System. Go  to the EFTPS website . You register and then use the website to pay your taxes; the amounts are deducted from your business bank account.

 

Back to All About Payroll Taxes

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