Payroll is the one obligation with no grace period. Vendors will wait, customers will renegotiate, but payroll taxes are held in trust for the government — and the penalties reflect that.
Here is what is actually owed for 2026, and the deadlines that matter.
The rates
Social Security is 6.2% from the employee and 6.2% from the employer, applied to wages up to the annual wage base. For 2026 that base is $184,500 (SSA). Once an employee crosses it, Social Security stops for the rest of the year — and resets every January.
Medicare is 1.45% each from employee and employer, with no wage cap.
Additional Medicare Tax is 0.9% on wages above $200,000 (single) or $250,000 (married filing jointly). It is employee-only — there is no employer match. Employers must begin withholding it once an employee’s wages exceed $200,000 in a calendar year, regardless of filing status, and the employee reconciles the difference on their return (IRS).
FUTA is 6.0% on the first $7,000 of each employee’s wages, but employers who pay state unemployment tax on time receive a credit of up to 5.4%, bringing the effective rate to 0.6% — a maximum of $42 per employee per year. States that have outstanding federal loans become “credit reduction states,” and employers there pay more (Form 940).
State unemployment (SUTA) varies by state and by your own claims experience. Both the rate and the wage base are state-specific; Arizona’s wage base is $8,000, while some states exceed $50,000.
Deposit schedules
Your deposit frequency is not a choice. It is assigned based on a lookback period — the four quarters ending the prior June 30 (Publication 15).
- Monthly depositor — reported $50,000 or less in the lookback period. Deposits are due by the 15th of the following month.
- Semiweekly depositor — reported more than $50,000. Payments on Wednesday, Thursday, or Friday are due the following Wednesday; payments on Saturday through Tuesday are due the following Friday.
- Next-day rule — accumulate $100,000 or more in undeposited taxes on any day and it is due by the next business day. This one catches growing businesses off guard, and it immediately converts a monthly depositor to semiweekly for the remainder of the year and the next.
Deposits must be made electronically through EFTPS. Failure-to-deposit penalties escalate with delay: 2% for 1–5 days late, 5% for 6–15 days, 10% beyond 15 days, and 15% once a notice has been issued.
Filing deadlines
Form 941 is due the last day of the month following each quarter — April 30, July 31, October 31, and January 31. Certain small employers file Form 944 annually instead, but only if the IRS has notified you to do so.
Form 940 for FUTA is due January 31.
W-2s must be furnished to employees and filed with the Social Security Administration by January 31. The same date applies to Form 1099-NEC for contractors. That single deadline carries outsized weight, and it is unforgiving — penalties apply per form, and rise the longer the delay runs.
The penalty that follows you personally
Most business tax liabilities stop at the entity. The Trust Fund Recovery Penalty does not.
The amounts withheld from employees — their income tax, their share of Social Security and Medicare — are held in trust. When they are not remitted, the IRS may assess a penalty equal to the full unpaid trust fund amount personally against any “responsible person” who willfully failed to pay (IRS).
“Responsible person” is broader than owners. It has reached bookkeepers, office managers, and outside directors — anyone with authority over which bills get paid. “Willful” does not require bad intent; knowing the taxes were due and paying other creditors first is enough. And the liability survives the business: dissolving the entity does not extinguish it.
This is why we treat a missed payroll deposit as a different category of problem from a late vendor payment. It is the one liability that can follow an owner personally after the company is gone.
Practical guardrails
Keep withheld payroll taxes in a separate account. The money is not yours, and commingling it with operating cash makes it available to spend during a slow month.
Reconcile payroll liabilities to the general ledger every month, not at year-end. A liability account that never clears is the earliest visible sign of a deposit problem.
Confirm your deposit schedule each year. It is reassigned annually based on the lookback period, and businesses that grow across the $50,000 threshold often keep depositing monthly out of habit — accruing penalties on every deposit while believing they are current.