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What is the Semiweekly Payroll Tax Deposit Rule?

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Question: What is the Semiweekly Payroll Tax Deposit Rule?
Answer:

You may have looked at the IRS online tax calendar or the printed tax calender the IRS sends out each year and you may have noticed that every month the IRS notes several dates as those on which you must make payroll tax deposits "if the semiweekly deposit rule applies." Payroll taxes are Social Security/Medicare payments and any income tax withholding designated by the employee on Form W04.

Look-back Period
The IRS determines the payroll taxes deposit schedule for employers based on their total gross Social Security/Medicare liability for the twelve-month period ending on the most recent June 30. This time period is called a look-back period. Start by calculating your total gross payroll tax liability for Social Security and Medicare.

Which Rule Applies?
When you know your total payroll tax liability for this period, you can see which rule applies:

  • If your total payroll taxes for the "look back period" were $50,000 or less, you are a monthly depositor.
  • If your total payroll taxes for the "look back period" were more than $50,000, you must make deposits on the semi-weekly schedule.
If you are a new employer and you did not have employees during the look back period, you are a monthly depositor.

How to use the deposit rule
When you look at the IRS tax calender, you will see several dates noted as "semiweekly" deposit dates. If you are required to make payroll tax deposits to the IRS on a semiweekly basis, use your payroll date as the indicator of when to make deposits. For example, if you have a payroll on Friday, November 27, you must deposit the payroll taxes for that payroll by December 1.

If you are in doubt about when to make a payroll deposit, check the IRS calendar or read more about this subject in my article, "When Do I Make Payroll Tax Deposits?"

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