Payroll is the repeating cycle an employer runs to pay people for work already done: work out what each person earned for the period, subtract the taxes and other amounts the law and the employee’s elections require, pay the net amount, hand the withheld money to the government on a set schedule, and report the whole thing on a return. The pay run is the visible middle of that cycle, and the two steps after the money leaves are where the deadlines live.
The pieces are separate obligations with separate timing, which is why a business can pay everyone correctly and still be late. What is withheld from a paycheck is not the same event as what is deposited with the Treasury, and neither is the same event as the return that reports both.
The Five Steps in Order
Measure the period first. The starting figure is gross wages, which is what the person earned before anything comes out.
Withhold second, in a fixed order. Federal income tax comes out using the employee’s Form W-4 and the methods in the IRS withholding guide, and the Social Security and Medicare taxes come out alongside it under their own imposing statutes, set out tax by tax in payroll tax. The sequence matters as much as the amounts, because a deduction taken before the taxes are computed shrinks the base they are computed on, which is the point worked through in gross vs net pay.
Pay third, and record it. One pay run produces one payroll register, the listing that carries every employee’s gross, each withholding and the net for that period.
Deposit fourth. The withheld federal income tax, together with the Social Security and Medicare amounts, is money held for the government and it has to be handed over on a schedule.
Report fifth, on a federal employment tax return. The quarterly return most employers use is Form 941 (IRS, Publication 15 (2026), Circular E, Employer’s Tax Guide).
When a Deposit Is Actually Due
There are two deposit schedules, monthly and semiweekly, for determining when an employer deposits Social Security, Medicare and withheld federal income taxes (IRS, Publication 15 (2026), Circular E, Employer’s Tax Guide). Which one applies is settled before the calendar year begins from the taxes reported in a lookback period, and the threshold that decides it is set out in payroll outsourcing.
The due dates themselves are what the schedule names buy you. Under the monthly deposit schedule, employment taxes on payments made during a month are deposited by the 15th day of the following month (IRS, Publication 15 (2026), Circular E, Employer’s Tax Guide). Under the semiweekly deposit schedule, taxes for payments made on Wednesday, Thursday or Friday are deposited by the following Wednesday, and taxes for payments made on Saturday, Sunday, Monday or Tuesday are deposited by the following Friday (IRS, Publication 15 (2026), Circular E, Employer’s Tax Guide).
The liability itself is dated by when the money moved. It is based on the dates payments were made or wages were paid (IRS, Publication 15 (2026), Circular E, Employer’s Tax Guide), so a liability belongs to the pay date and not to the period the work was done in.
One event overrides both schedules. If an employer accumulates $100,000 or more in taxes on any day during a monthly or semiweekly deposit period, the tax is deposited by the next business day whichever schedule it is on (IRS, Publication 15 (2026), Circular E, Employer’s Tax Guide), and what that single day then does to the schedule for the rest of the year is set out in the bookkeeping checklist.
What the Employer Owes Beyond Withholding
Withholding moves the employee’s own money. Some payroll cost is the employer’s alone, and federal unemployment tax is the clearest case: only the employer pays FUTA tax, and it is not withheld from the employee’s wages (IRS, Publication 15 (2026), Circular E, Employer’s Tax Guide).
The Social Security and Medicare charges sit in between, because each is levied on both sides at the same rate. The employer’s half of Social Security is 6.2% and its half of Medicare is 1.45% (IRS, Publication 15 (2026), Circular E, Employer’s Tax Guide), so those lines cost the business real money on top of the gross wage even though the mirror halves came out of the paycheck.
One of those two runs out and the other does not. The Social Security wage base limit for 2026 is $184,500 (IRS, Publication 15 (2026), Circular E, Employer’s Tax Guide), while Medicare has no wage base limit at all and applies to every covered dollar (IRS, Publication 15 (2026), Circular E, Employer’s Tax Guide).
Where a US Firm Meets the Cycle
The client sees one thing, the paycheck. The firm is accountable for the two steps after it, and those are the ones that carry penalties.
The practical control is to reconcile in three places rather than one: the register for the run, the deposits for the schedule, and the quarterly return for the period. A run that footed correctly proves nothing about whether the deposit was made on the day it was due.
Common Questions
No, and treating it that way is the common failure. Paying employees is one step of five. The obligations that produce penalties are the deposit schedule and the employment tax return, both of which fall due after the net pay has already left the account.
Accountably places trained offshore accountants and tax preparers inside US CPA and EA firms, and a trial task lets a firm’s own reviewer grade real work before any client file moves.
