Key figures
Federal payroll
2026, with sources
- Additional Medicare Tax
- 0.9%Withheld from an employee’s wages over $200,000 in a calendar year; no employer match.
- FUTA
- 6.0%On the first $7,000 of each employee’s wages; up to a 5.4% credit for state unemployment tax leaves 0.6%.
- FUTA credit reduction states, 2025
- California 1.2%; U.S. Virgin Islands 4.5%Paid with the 2025 Form 940. DOL’s potential list for 2026 names California and the U.S. Virgin Islands; the final list follows the Nov 10 loan-balance date.
- Deposit schedule
- $50,000 or less: monthly; more: semiweeklyBased on taxes reported in the lookback period (Jul 1, 2024–Jun 30, 2025 for 2026).
What every paycheck carries federally
Each paycheck withholds federal income tax (from the employee’s Form W-4), Social Security at 6.2% on wages up to the 2026 wage base of $184,500, and Medicare at 1.45% with no cap; the employer matches both. Once an employee’s wages pass $200,000 in the year, you also withhold the 0.9% Additional Medicare Tax, which has no employer match.
The employer alone pays FUTA: 6.0% on the first $7,000 of each employee’s wages, reduced by a credit of up to 5.4% for state unemployment tax paid on time — a net 0.6%. In a credit reduction state, the credit shrinks; for 2025 those were California (1.2%) and the U.S. Virgin Islands (4.5%). DOL’s potential list for 2026 again names both; a state or territory drops off if its federal loan is repaid by November 10, and the final list is announced after that date.
Deposits and returns
Federal tax deposits must be made by electronic funds transfer. Your schedule is set by the lookback period: $50,000 or less of tax reported makes you a monthly depositor, due the 15th of the following month; more makes you a semiweekly depositor. Any day you accumulate $100,000 or more, the deposit is due the next business day, and a monthly depositor becomes semiweekly. A company whose quarterly liability stays under $2,500 can pay with the return.
Form 941 is due by the last day of the month after each quarter. Form 940 is due January 31 (February 10 if all FUTA was deposited on time). Forms W-2 go to employees and, with Form W-3, to the SSA by January 31; for 2026 wages that is February 1, 2027.
- Enroll in EFTPS (or confirm your payroll provider deposits for you).
- Form 941 each quarter: Apr 30, Jul 31, Oct 31, Jan 31.
- Form 940 each year by Jan 31; FUTA deposits once the liability passes $500.
- Forms W-2 to employees and W-2/W-3 to the SSA by Jan 31 — Feb 1, 2027 for 2026.
- Keep employment tax records for at least 4 years.
Hiring: I-9, E-Verify and new-hire reporting
Every new employee completes Section 1 of Form I-9 by the first day of work, and the employer completes Section 2 — examining the employee’s documents — within three business days of the first day of work for pay. E-Verify is optional under federal law for most private employers, though federal contractors and some states require it.
New-hire reporting is a federal requirement carried out by the states: you report each new employee to the state’s directory of new hires within 20 days of hire, or sooner where the state says so. State withholding and unemployment registration happen at the same moment, which is why each state page starts its payroll section there.
Wage and hour floors, and the 2025 changes
The FLSA sets a federal minimum wage of $7.25 an hour, unchanged since 2009; where a state or city sets a higher one, the higher one applies. To treat a salaried employee as exempt from overtime, the job must meet a duties test and pay at least $684 a week. DOL’s 2024 rule raising that level was vacated by a federal court in November 2024, and DOL enforces the 2019 level.
The 2025 law created income tax deductions for qualified tips and qualified overtime. Employees claim them; employers report them. From tax year 2026 there is no transition relief: the W-2 shows qualified overtime in box 12 code TT and tips in box 12 code TP, with the tipped occupation in box 14b. For overtime, only the premium — the “half” in time-and-a-half — is reported.
Deadlines
- Quarterly — Apr 30, Jul 31, Oct 31, Jan 31Quarterly federal payroll returnForm 941
- Jan 31Annual FUTA return (Feb 10 if all FUTA was deposited on time)Form 940
- Jan 31To employees and to the SSA (Feb 1, 2027 for 2026 wages)Forms W-2 and W-3
- Within 3 business days of the first day of work for paySection 2 completed by the employerForm I-9
- Within 20 days of hireReport the new hire to the state’s new-hire directory (some states require sooner)
Payroll, state by state
Everything above applies everywhere. Each state then adds its own rules. Choose one to read its payroll page.
Point at a state, or shade the map by one question.
Common questions
When do I have to deposit payroll taxes?
It depends on how much tax you reported in the lookback period — July 1 to June 30 of the year before last. $50,000 or less makes you a monthly depositor (due the 15th of the next month); more makes you semiweekly. On any day you accumulate $100,000 or more, the deposit is due the next business day. A new employer is a monthly depositor in its first year, unless that $100,000 rule is triggered. All deposits are electronic, usually through EFTPS via your payroll provider.
Do the 2025 “no tax on tips” and “no tax on overtime” rules change my payroll?
Not directly. Employees claim the deductions on their own returns. What changes for employers is reporting: from tax year 2026, the W-2 carries qualified overtime in box 12 code TT, cash tips reported to the employer in box 12 code TP, and a tipped-occupation code in box 14b. You can’t reduce withholding for the deductions unless the employee gives you a new Form W-4.
Is new-hire reporting federal?
No. Federal law sets the outer limit — 20 days from hire — but you report to the state where the employee works, and many states require sooner. A multistate employer can choose to report all new hires to one state where it has employees.
Payroll: the states compared
- No tax on wagesStates with no state income tax on wages9 of 51 — no state income tax on wages.
- Paid leave payrollStates with a paid leave or disability payroll program16 of 51 — state paid leave or disability program.
- Local payroll taxStates with city, county or district payroll taxes14 of 51 — city, county or district taxes on wages.
Founder guides on this
- PeopleContractor or employee? Classification for startupsContractor or employee depends on control, not the contract. The IRS test, state rules, 1099s, payroll registration and the cost of getting it wrong.
- ComplianceFirst-year compliance calendar for a Delaware C-corpDelaware franchise tax, 1099s, the federal return, payroll filings, state annual reports and sales tax: the deadlines a young C-corp misses most, by month.
- RunwayBurn rate and runway: how to calculate them correctlyGross burn, net burn and months of runway, done the way an investor checks them: from cash, averaged, and with the hires you’ve already committed to.
More of the federal guide
- AccountingFederal accounting for startupsCorporate tax, conformity to federal rules, apportionment and what it does to your books
- ReceivablesFederal receivables for startupsSales tax registration, economic nexus, whether SaaS is taxable, and collecting from customers
- PayablesFederal payables for startupsPaying vendors and contractors: 1099 filing, use tax, contractor tests and withholding
- ComplianceFederal compliance for startupsRegistering to do business, annual reports, franchise tax and the filing calendar
- AdvisoryFederal advisory for startupsCredits, incentives and the decisions that are cheaper to get right the first time
Sources
Checked against each agency’s own page on . Rates and thresholds change, usually on January 1.
General information for US companies, not tax, legal or accounting advice for yours. Rules and thresholds change; confirm the specifics with a CPA or the agency before you act on them.