When are payroll taxes due?
The answer depends on the size of your payroll. The IRS assigns you a deposit schedule based on your total payroll tax liability during a lookback period. Most small contractors and trades businesses fall into the monthly deposit schedule. Larger operations with bigger payrolls may be on a semi-weekly schedule.
Monthly depositors must deposit federal payroll taxes (income tax withheld, Social Security, and Medicare) by the 15th of the month following payday. If you pay your crew in March, the taxes are due by April 15th. Semi-weekly depositors have a shorter window. Paydays that fall Wednesday through Friday require a deposit by the following Wednesday. Paydays that fall Saturday through Tuesday require a deposit by the following Friday. New businesses are generally treated as monthly depositors for their first year.
On top of deposits, you file Form 941 quarterly to report wages paid and taxes withheld. The deadlines are April 30, July 31, October 31, and January 31. These dates don’t move just because a quarter was slow. Even if you had no payroll activity, you still need to file unless you’ve formally notified the IRS otherwise.
FUTA tax (Form 940) is an annual return due January 31st of the following year. However, if your FUTA liability exceeds $500 in any quarter, you need to make a deposit by the last day of the month after that quarter ends. Most employers with a few employees will hit that threshold.
W-2s are due to employees and to the Social Security Administration by January 31st. Miss this one and you’re looking at penalties that increase the longer you wait.
California adds its own layer. The state collects payroll taxes for disability insurance (SDI), unemployment insurance (SUI), and state income tax withholding (PIT). You file Form DE 9 and DE 9C with the EDD quarterly on roughly the same schedule as the federal 941. Deposits are due based on a schedule the EDD assigns you, and for most small businesses it follows a similar monthly or semi-weekly pattern.
The penalty for late payroll tax deposits starts at 2% if you’re one to five days late, jumps to 5% at six days, 10% at sixteen days, and reaches 15% if the IRS has to send a notice demanding payment. These penalties apply to the deposit amount, not your total payroll. And they stack on top of interest. Payroll tax penalties are some of the harshest the IRS imposes because this is money you’ve already withheld from employees’ paychecks.
If you’re handling payroll yourself, a proper payroll system setup makes a big difference. Good payroll software calculates the liability, tells you when deposits are due, and can automate payments so nothing slips through the cracks. The businesses that get in trouble are usually the ones doing payroll manually or writing checks without a system tracking the tax obligations that come with each paycheck.
Staying current on payroll taxes is one of the most important financial obligations for any business owner. If you’re behind or unsure whether deposits have been made correctly, a CPA for construction businesses can review your payroll records, identify any gaps, and get you back on track before penalties pile up.
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