What Determines an Employer’s Payroll Tax Deposit Schedule?

Understanding what determines an employer’s payroll tax deposit schedule is crucial for small business owners. Depositing your federal payroll taxes by the established deadline helps make sure that your business meets the Internal Revenue Service’s expectations. First things first, determine your payroll tax deposit schedule based on the size of your company’s payroll. There are two possible deposit schedules: monthly and semiweekly. Review your company’s total tax liability during a specific lookback period. You will have already reported the liabilities on payroll forms.

Advanced Micro Solutions supports an extensive list of federal payroll forms. Small businesses electronically file forms and export data for year-end processing with our AMS Payroll module. If your business needs more comprehensive or affordable support — look no further. Our payroll module integrates with our base W-2/1099 program. It offers easy payer and employee set-up.


Steps to Finding Payroll Tax Deposit Dates

Avoid feeling stressed about what determines an employer’s payroll tax deposit schedule. You cannot deposit your business’s payroll taxes whenever you please. You must base your deposit schedule on a lookback period.


Step 1: Determine Your Lookback Period

Not sure if you should deposit payroll taxes on a monthly or semiweekly basis? Review your business’s lookback period. The period starts July 1 of a calendar year, if you use IRS Form 941. The period extends until June 30 of the following calendar year.


Step 2: Establish That Period’s Total Tax Liability

Check past quarterly 941 forms to identify the amounts the business paid in payroll taxes during a lookback period. Line 12 shows total taxes after adjustments and nonrefundable credits. You are a:

  • Monthly schedule depositor if your business reported $50,000 or less for taxes during a lookback period
  • Semiweekly schedule depositor if your business paid more than $50,000 for taxes

New employers without any employees during a lookback period have requirements when they figure out what determines an employer’s payroll tax deposit schedule. The IRS considers you a monthly depositor for your business’s first calendar year.


What are the Payroll Tax Deposit Due Dates and Penalties?

Monthly depositors deposit employment taxes by the 15th day of the next month. Semiweekly depositors submit employment taxes for payments that they made on Wednesday, Thursday, and/or Friday by the following Wednesday. Employers with payments on Saturdays, Sundays, Mondays, and/or Tuesdays should deposit taxes by the following Friday.

Keep in mind the special circumstances surrounding the next-day deposit rule. Deposit a tax the next business day if you accumulate $100,000 or more in taxes on any day within a monthly or semiweekly period. The IRS penalizes employers who fail to deposit 100% of the owed tax on or before a due date. Employers incur penalties for mailing payments instead of electronically depositing them with an approved system.

Learn what determines an employer’s payroll tax deposit schedule and then stay organized with trustworthy payroll software. AMS lets users record state and federal tax deposit information. Try our free demo or call (405) 340-0697 to learn about our full range of payroll capabilities.

Software Solutions from AMS

Our W-2 and 1099 Forms Filer is our only required platform. From there, users pick the services they need. Choose from the tools below to build out your customized accounting software.