# Payroll tax deposits

> Northwind is a monthly depositor in its first year: September's $2,335.20 is due October 15, 2026, through EFTPS, before anything else is paid.

Source: https://lopifi.com/learn/payroll-tax-deposits
Part of: Lopifi — US GAAP books on autopilot, checked by a CPA (https://lopifi.com)

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**When are payroll taxes due, and how do I deposit them?** Northwind is a monthly depositor in its first year: September's $2,335.20 is due October 15, 2026, through EFTPS, before anything else is paid.

The return is quarterly; the money isn't. Federal income tax withheld and both halves of FICA are deposited on a schedule of their own, and the schedule depends on how much tax the employer reported in the past — not on how often it pays people. Northwind owes $2,335.20 on September's payroll: $1,050 of income tax, $642.60 of employee FICA and $642.60 of its own.

Payday (Withheld from the paycheck) → 2100 Payroll liabilities (A liability, not Northwind's money) → EFTPS deposit (By the schedule's due date) → Form 941 (Reconciled on the quarter's return)

Where withheld tax goes.

## Monthly or semiweekly

Each year's schedule comes from the [lookback period](https://lopifi.com/md/glossary/lookback-period): the four quarters from July 1 two years back to June 30 of last year. $50,000 or less of Form 941 tax in them makes the employer a [monthly schedule depositor](https://lopifi.com/md/glossary/monthly-schedule-depositor); more makes it a [semiweekly](https://lopifi.com/md/glossary/semiweekly-schedule-depositor) one. A new employer's lookback quarters count as zero, so Northwind is monthly for 2026: the tax on a month's paydays is due by the 15th of the next month. September's $2,335.20 is due Thursday, October 15, 2026.

> “If you reported $50,000 or less of taxes for the lookback period, you’re a monthly schedule depositor; if you reported more than $50,000, you’re a semiweekly schedule depositor.”

— [IRS Pub. 15 (2026), §11 — Lookback period](https://www.irs.gov/pub/irs-pdf/p15.pdf) (PDF), Monthly or semiweekly: the lookback rule

> “For Form 941 filers, your tax liability for any quarter in the lookback period before you started or acquired your business is considered to be zero. Therefore, you’re a monthly schedule depositor for the first calendar year of your business.”

— [IRS Pub. 15 (2026), §11 — New employers](https://www.irs.gov/pub/irs-pdf/p15.pdf) (PDF), A new employer deposits monthly in its first year

| Rule | When it applies | When the deposit is due |
| --- | --- | --- |
| Monthly | Lookback tax $50,000 or less, and every employer's first year | The 15th of the month after the payday |
| Semiweekly | Lookback tax over $50,000 | Wednesday–Friday paydays by the next Wednesday; Saturday–Tuesday paydays by the next Friday |
| Next day | $100,000 or more accumulated on any one day | The next business day, on either schedule |
| With the return | Under $2,500 for the quarter or the one before, and no next-day deposit | May be paid with a timely filed Form 941 |

The two schedules, and the rule that overrides both.

> “Under the monthly deposit schedule, deposit employment taxes on payments made during a month by the 15th day of the following month.”

— [IRS Pub. 15 (2026), §11 — Monthly Deposit Schedule](https://www.irs.gov/pub/irs-pdf/p15.pdf) (PDF), The monthly deposit schedule

**Northwind — September's deposit.** Northwind's payday is a Friday. As a semiweekly depositor it would owe the tax by Wednesday, September 30, 2026; as a monthly one it has until Thursday, October 15, 2026. Its third-quarter tax is $2,335.20 — under $2,500, so it could legally be paid with the Form 941 instead. Northwind deposits anyway. The IRS's own advice is to deposit when you're not sure the quarter will stay under, and with a fourth quarter of three paydays it won't.

> “Your Form 941 total tax liability (Form 941, line 12) for either the current quarter or the prior quarter is less than $2,500, and you didn’t incur a $100,000 next-day deposit obligation during the current quarter.”

— [IRS Pub. 15 (2026), §11 — Payment with return](https://www.irs.gov/pub/irs-pdf/p15.pdf) (PDF), Paying a small quarter with the return

The [next-day deposit rule](https://lopifi.com/md/glossary/next-day-deposit-rule) catches the startup with a big one-off payroll. If $100,000 or more of tax accumulates on any single day — a round of bonuses, a large option exercise run through payroll — it's due the next business day, and a monthly depositor becomes semiweekly for the rest of that year and the next.

> “If you accumulate $100,000 or more in taxes on any day during a monthly or semiweekly deposit period (see Deposit period, earlier in this section), you must deposit the tax by the next business day, whether you’re a monthly or semiweekly schedule depositor.”

— [IRS Pub. 15 (2026), §11 — $100,000 Next-Day Deposit Rule](https://www.irs.gov/pub/irs-pdf/p15.pdf) (PDF), The $100,000 next-day deposit rule

## How the money moves, and what lateness costs

Every federal deposit is electronic: through [EFTPS](https://lopifi.com/md/glossary/eftps), IRS Direct Pay or the IRS business tax account, or by a provider doing it in the employer's name. A new employer that asked for an EIN with a federal tax obligation is pre-enrolled in EFTPS, and the PIN arrives by mail.

> “You must use EFT to make all federal tax deposits. An EFT can be made using EFTPS, IRS Direct Pay, or your IRS business tax account.”

— [IRS Pub. 15 (2026), §11 — How To Deposit](https://www.irs.gov/pub/irs-pdf/p15.pdf) (PDF), Deposits are electronic: EFTPS, Direct Pay or the business tax account

**EFTPS, by the company**
- Pro: Free, from the Treasury
- Pro: Every deposit has a trace number as its receipt
- Con: Someone has to remember every due date
- Con: Same-day payments must be in before the cutoff
- Best for: A company running its own payroll

**The payroll provider, in Northwind's name**
- Pro: Deposits made on schedule from the register, with no dates to track
- Pro: The company can confirm each one in EFTPS with an inquiry PIN
- Con: The liability stays with the company if the provider misses one
- Con: A failed debit to fund payroll is a missed deposit
- Best for: Almost every startup

**Direct Pay, the business tax account, or a same-day wire**
- Pro: Direct Pay and the business tax account are free
- Pro: A same-day wire can still make a deposit on time after a missed EFTPS cutoff
- Con: A same-day wire has to be arranged with the bank ahead of time
- Con: The bank may charge for the wire
- Best for: A one-off payment, or a missed EFTPS cutoff

Three ways a deposit gets made.

| Penalty | For |
| --- | --- |
| 2% | Deposits made 1 to 5 days late |
| 5% | Deposits made 6 to 15 days late |
| 10% | Deposits made 16 or more days late, or paid directly to the IRS instead of deposited |
| 15% | Amounts still unpaid more than 10 days after the first IRS notice |

Failure-to-deposit penalties, by how late the money is.

> “2% Deposits made 1 to 5 days late. 5% Deposits made 6 to 15 days late.”

— [IRS Pub. 15 (2026), §11 — Deposit Penalties](https://www.irs.gov/pub/irs-pdf/p15.pdf) (PDF), Failure-to-deposit penalties

> **Never borrow from the payroll taxes.** Withheld income tax and employee FICA were never the company's money. If they aren't paid over, the IRS can assess the [trust fund recovery penalty](https://lopifi.com/md/glossary/trust-fund-recovery-penalty) — 100% of the unpaid amount — personally against each responsible person who acted willfully, and that includes whoever signs the checks. A founder short of cash pays the deposit first.

> “The penalty is 100% of the unpaid trust fund tax. … A responsible person may also include one who signs checks for the business or otherwise has authority to cause the spending of business funds.”

— [IRS Pub. 15 (2026), §11 — Trust fund recovery penalty](https://www.irs.gov/pub/irs-pdf/p15.pdf) (PDF), The trust fund recovery penalty

- **September 25, 2026** — September payroll paid; the tax is owed from today
- **October 15, 2026** — Deposit $2,335.20 (EFTPS)
- **November 2, 2026** — Third-quarter return due (October 31 is a Saturday) (941)
- **November 10, 2026** — Due date if every deposit was on time (941)

Northwind's first payroll, from payday to the return.

> **The deposit schedule comes from the lookback period, not the pay schedule: monthly in the first year, semiweekly once lookback tax passes $50,000, next day at $100,000 on any day — and the deposit is always paid before anything else.**

In this lesson: the **semiweekly schedule** worked through Publication 15's own examples, holidays included.

## Pages in this lesson

- [The semiweekly deposit schedule](https://lopifi.com/md/learn/payroll-tax-deposits/semiweekly-deposit-schedule) — 5 min. When are semiweekly payroll tax deposits due?

## Where this lesson's rules come from

- [IRS Pub. 15 (2026), §11 — Lookback period](https://www.irs.gov/pub/irs-pdf/p15.pdf) (PDF) — Monthly or semiweekly: the lookback rule (irs)
- [IRS Pub. 15 (2026), §11 — New employers](https://www.irs.gov/pub/irs-pdf/p15.pdf) (PDF) — A new employer deposits monthly in its first year (irs)
- [IRS Pub. 15 (2026), §11 — Monthly Deposit Schedule](https://www.irs.gov/pub/irs-pdf/p15.pdf) (PDF) — The monthly deposit schedule (irs)
- [IRS Pub. 15 (2026), §11 — Semiweekly Deposit Schedule](https://www.irs.gov/pub/irs-pdf/p15.pdf) (PDF) — The semiweekly deposit schedule (irs)
- [IRS Pub. 15 (2026), §11 — $100,000 Next-Day Deposit Rule](https://www.irs.gov/pub/irs-pdf/p15.pdf) (PDF) — The $100,000 next-day deposit rule (irs)
- [IRS Pub. 15 (2026), §11 — Payment with return](https://www.irs.gov/pub/irs-pdf/p15.pdf) (PDF) — Paying a small quarter with the return (irs)
- [IRS Pub. 15 (2026), §11 — How To Deposit](https://www.irs.gov/pub/irs-pdf/p15.pdf) (PDF) — Deposits are electronic: EFTPS, Direct Pay or the business tax account (irs)
- [IRS Pub. 15 (2026), §11 — Deposit Penalties](https://www.irs.gov/pub/irs-pdf/p15.pdf) (PDF) — Failure-to-deposit penalties (irs)
- [IRS Pub. 15 (2026), §11 — Trust fund recovery penalty](https://www.irs.gov/pub/irs-pdf/p15.pdf) (PDF) — The trust fund recovery penalty (irs)

## Read further

- https://lopifi.com/md/startups/form-941-and-payroll-tax-deposits
- https://lopifi.com/md/startups/startup-tax-deadlines-by-month
- https://lopifi.com/md/docs/domain/07-cash-and-treasury

- **Track:** [Payroll](https://lopifi.com/md/learn/payroll)
- **Lesson:** Lesson 4 of 8 — 12 min
- **Terms taught:** [Lookback period](https://lopifi.com/md/glossary/lookback-period), [Monthly schedule depositor](https://lopifi.com/md/glossary/monthly-schedule-depositor), [Semiweekly schedule depositor](https://lopifi.com/md/glossary/semiweekly-schedule-depositor), [Next-day deposit rule](https://lopifi.com/md/glossary/next-day-deposit-rule), [EFTPS](https://lopifi.com/md/glossary/eftps), [Trust fund recovery penalty](https://lopifi.com/md/glossary/trust-fund-recovery-penalty), [Payroll liabilities](https://lopifi.com/md/glossary/payroll-liabilities)
- **Previous:** [The employer's payroll taxes, Payroll · Lesson 3](https://lopifi.com/md/learn/employer-payroll-taxes)
- **Next:** [The semiweekly deposit schedule](https://lopifi.com/md/learn/payroll-tax-deposits/semiweekly-deposit-schedule)
- **The course:** https://lopifi.com/md/learn