How Does A Payroll Tax Deposit Schedule Work?

A payroll tax deposit schedule works to determine the amount of payroll taxes that are payable to the IRS by an employer. Based on the amount of payroll tax liability, the IRS determines what amount is required to be deposited on a periodic basis. A coupon book is used to track payments and the frequency of these payments depends on the liability amount.

Employers with Tax Liability of Less than $50,000

An employer with a liability that is $50,000 or less has to make a monthly deposit by the 15th of every month using the payroll tax deposit schedule. The money is placed in a specially designated account that the IRS simply debits in order to deduct the required payment. This is done electronically between the employer and the IRS and the amounts included in the liability are the federal withholding, FICA and employer’s FICA match.

Employers with Tax Liability of Greater than $50,000

An employer makes semi-weekly deposits. Failure to make a deposit or the full required amount of deposit will result in a penalty of 10 percent of the unpaid tax liability.