What determines an employer’s payroll tax deposit schedule?

Running payroll is about more than just paying people on time. It’s also about complying with the many requirements of the Internal Revenue Service (IRS) — and that means understanding your payroll tax deposit schedule inside and out.

But what determines your payroll tax deposit schedule? And what is Form 941?

In this article, we’ll break down what you need to know to stay compliant, avoid penalties, and make confident, informed decisions about your tax deposit responsibilities.

What is a payroll tax deposit schedule?

Before we dive into the ‘how’, it’s important to be clear on the ‘what’.

As an employer, it’s your responsibility to withhold payroll taxes from your employees, including income tax, Social Security, and Medicare. Your payroll tax deposit schedule tells you when you need to send these taxes to the IRS.

If you have employees and withhold taxes, you almost certainly need to do this through IRS Form 941.

What is the 941 deposit schedule?

Your 941 deposit schedule is tied directly to your payroll tax deposit schedule. Form 941 itself must be filed every quarter, but the IRS will decide how frequent your deposits are based on how much payroll tax you have reported in the past (see below).

Note that you might not need to file Form 941 if:

• You’re a seasonal employer with no tax liability in a given quarter.

• You’ve received IRS approval to file Form 944 (the annual version for very small employers).

• You only hire household employees or farm workers, which fall under different rules and forms (like Form 943).

Which payroll taxes are paid through Form 941?

Form 941 is used to report and pay the following federal payroll taxes:

• Federal income tax: This is withheld from your employees' paychecks based on their W-4 elections.

• Social Security: This includes the 6.2% withheld from your employees, and the 6.2% paid by you as the employer.

• Medicare: Again, this includes the 1.45% withheld from your employees and the 1.45% paid by you (note that, for employees earning over $200,000, you must withhold an extra 0.9%).

Note that Form 941 does not include the following payroll taxes:

• Federal unemployment (FUTA) tax (this is reported on Form 940)

• State income taxes and unemployment taxes (these are filed with state agencies)

• Contractor payments (1099s)

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What determines an employer’s payroll tax deposit schedule?

To determine your deposit schedule, the IRS reviews your total tax liability across a specific 12-month timeframe, known as the lookback period.

Your lookback period is July 1 two years ago through June 30 of last year.

For example, your lookback period for 2025 would be July 1, 2023 to June 30, 2024. For 2026, it will be July 1, 2024 to June 30, 2025, and so on.

If your tax liability during the lookback period is $50,000 or less, your deposit schedule will be monthly. If it’s more than $50,000, you must make deposits semi-weekly.

What if you’re a new employer?

If you’re new and didn’t have a payroll during the lookback period, you start as a monthly depositor by default — until your liability increases.

When are 941 deposits due?

The IRS is clear about deposit deadlines, and it’s important you adhere to them to avoid penalties and potential fines.

For monthly deposits

If you’re required to make monthly deposits, you must deposit by the 15th of the following month. For example, the taxes you withheld from your employees in February must be deposited by March 15.

For semi-weekly deposits

If you’re required to make semi-weekly deposits, you must:

• Deposit by the following Wednesday if payday is on Wednesday, Thursday, or Friday.

• Deposit by the following Friday if payday is on Saturday, Sunday, Monday, or Tuesday.

For example, if payday is Friday, March 7, the deposit is due by Wednesday, March 12.

Important exception: The $100,000 rule

Note that if your total accumulated tax liability reaches $100,000 or more on any given day, you must deposit the tax by the next banking day — regardless of your regular schedule

Once this happens, you then automatically become a semi-weekly depositor for the rest of the calendar year and the following year.

How to make payroll tax deposits

All federal payroll tax payments must be made electronically through the Electronic Federal Tax Payment System, or EFTPS. These payments can be scheduled in advance to avoid same-day stress.

When scheduling and making these deposits, it’s advisable to:

• Double-check bank cut-off times (some are as early as 3pm)

• Set calendar reminders for recurring due dates

Alternatively, you can automate this entire process with Remote Payroll, saving you time, resources, and plenty of headaches. Not only do we file your payroll taxes in the US, but we can remit the payments on your behalf! Learn more.

What happens if you miss a deposit?

If you opt to handle the process yourself, missing a 941 deposit can trigger some painful consequences.

IRS penalties for late payments are as follows:

• 1-5 days late: 2%

• 6-15 days late: 5%

• More than 15 days: 10%

• Over 10 days after receipt of IRS notice: 15%

Note that you will also be liable to pay interest charges, which begin accumulating from day one.

Does a distributed workforce impact the deposit schedule?

The short answer is no — at least not for federal tax purposes.

Whether your entire team is based in one state or working remotely from multiple, you still follow one federal deposit schedule based on your total liability. As mentioned, state (and local) payroll taxes are handled separately, and you will need to manage those accordingly.

To see a full breakdown of payroll tax requirements by state, check out our free US State Explorer tool.

How Remote can help

Keeping track of your 941 filing and payment schedules can be tricky enough without managing your state payroll tax requirements and other obligations as well.

That’s why it’s advisable to work with a payroll partner who can handle all of this for you. In the US, Remote Payroll:

• Calculates all your federal, state, and local payroll taxes

• Ensures you meet all the necessary reporting requirements with the relevant authorities

• Makes the monthly or semi-weekly payments on your behalf (at no additional cost)

• Ensures your employees are paid on time and accurately, every time

• Ensures you are fully compliant with all state and federal payroll and employment laws, even when they change

This saves you time and money, and ensures that you don’t need to worry about deadlines and compliance. To learn more about how we can save you countless headaches, speak to one of our friendly experts today.

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