Payroll Tax Deposit Schedules: Monthly vs. Semiweekly Rules for Employers

Understanding Your IRS Payroll Tax Deposit Schedule

Employers are responsible for withholding federal income tax, social security, and Medicare taxes from employee paychecks, plus paying the employer share of these taxes. The frequency with which you must remit these funds to the IRS is determined by your total tax liability during a specific lookback period.

Automate your payroll tax deposits and compliance—Sign up now.

The Lookback Period Defined

Your deposit schedule is not determined by how often you pay your employees, but by the total taxes reported on Form 941 during a 12-month lookback period. For a calendar year, the lookback period is the four quarters ending on June 30 of the previous year.

• Monthly Depositor: If you reported $50,000 or less in taxes during the lookback period.
• Semiweekly Depositor: If you reported more than $50,000 in taxes during the lookback period.

Monthly Deposit Rules

If you are a monthly depositor, you must deposit employment taxes on payments made during a month by the 15th day of the following month. For example, taxes on wages paid in January must be deposited by February 15.

Semiweekly Deposit Rules

Semiweekly schedules are determined by the day of the week the payday falls on, not the end of the month:

• Payday on Wednesday, Thursday, or Friday: Deposit by the following Wednesday.
• Payday on Saturday, Sunday, Monday, or Tuesday: Deposit by the following Friday.

The $100,000 Next-Day Deposit Rule

Regardless of your status as a monthly or semiweekly depositor, if you accumulate a tax liability of $100,000 or more on any day during a deposit period, you must deposit the tax by the next business day. If this happens, you automatically become a semiweekly depositor for the remainder of the current year and the following calendar year.

Critical Compliance Steps

1. Calculate Lookback Liability: Review your Form 941 filings for the four quarters ending June 30 to determine your status for the upcoming year.
2. Monitor Accruals: Track your cumulative tax liability daily to ensure you do not trigger the $100,000 next-day rule.
3. Use EFTPS: All federal tax deposits must be made via the Electronic Federal Tax Payment System (EFTPS). Deposits must be initiated by 8 p.m. ET the day before the due date to be considered timely.
4. Adjust for Holidays: If a deposit due date falls on a Saturday, Sunday, or legal holiday, the deposit is due on the next business day.