Payroll and tax dates in the forecast
The IRS's monthly deposit schedule and the next-business-day rule, placed in Northwind's 13 weeks.
Payroll taxes go on the IRS's calendar, not Northwind's. Withheld tax and the employer's share, $2,335.20 for September, sit in payroll liabilities until deposited. A new employer deposits monthly in its first calendar year, by the 15th of the following month. A 15th that falls on a weekend or a DC legal holiday moves to the next business day, which is why the November deposit is dated Nov 16.
Oct 3
Supplier: the rest of September's stock (JE-4): (6,000)
Oct 8
Walk-in sales, with sales tax: 10,260
Oct 15
Trade customer: the rest of September's invoice (JE-7): 8,000
Oct 15
Dividend declared September 30 (JE-14): (500)
Oct 15
Payroll tax deposit, last month's payroll: (2,335.20)
Oct 20
Last month's power bill: (450)
Oct 20
Sales tax return, last month (due date assumed; states set their own): (760)
Oct 23
Net pay: (6,707.40)
Oct 28
Rent: (2,000)
Where this lesson's rules come from
The sources behind this lesson's requirements, by kind. Anything marked as a convention is ours, not the rule-maker's.
- IRS guidance
- IRS Publication 15 (2026), Circular E, section 11 — Monthly Deposit Schedule (opens in a new tab)Payroll taxes leave the bank on the IRS's calendar, not the company'sFree to read
- IRS Publication 15 (2026), Circular E, section 11 — New employers (opens in a new tab)A new employer deposits monthly in its first calendar yearFree to read
The words this page teaches
Each links to its glossary definition, which also names the authority behind it and the components that render it.
- Payroll liabilitiesWhat an employer owes on wages it has already paid — the income tax and the employees' share of Social Security and Medicare withheld from their pay, plus the employer's own payroll taxes — until it is deposited with the government. The withheld part was never the employer's money: IRS Pub. 15 calls it trust fund taxesConvention
- Sales tax payableSales tax charged to customers and not yet remitted to the state — a liability from the moment it is collected, never revenue, when the entity has elected to exclude such taxes from the transaction price
- 13-week cash flowA direct-method forecast of cash receipts and payments week by week for the next quarter, built from the bank balance, bills, payroll and tax dates and expected collections, and rolled forward every weekConvention
See also
- Journal entry for payrollOn payday, debit Wages and salaries for gross pay, credit Cash for net pay and credit liabilities for everything withheld. Book the employer's own taxes separately (debit Payroll tax expense, credit Payroll taxes payable), and clear both payables when they are remitted.
- Journal entry for sales tax collectedWhen a taxable sale is made, debit Cash or Accounts receivable for the total charged, credit Revenue for the price and credit Sales tax payable for the tax. When the return is filed, debit Sales tax payable and credit Cash.
- Form 941 and payroll tax deposits for startupsWhat Form 941 reports, monthly vs semiweekly deposits, the $100,000 next-day rule, FUTA, the R&D payroll credit, and what your provider can’t do.