What Are the Semi-Weekly Deposit Rules for Employers?
Your business's federal tax deposit schedule is set by your past tax liability. Understand the rules that determine your payment deadlines and ensure compliance.
Employers are responsible for remitting federal taxes withheld from their employees’ pay. These taxes include federal income tax, Social Security, and Medicare taxes, collectively known as employment taxes. In addition to the amounts withheld from wages, businesses must also pay their own share of these taxes. The Internal Revenue Service (IRS) requires these funds to be deposited on a set schedule.
The frequency of deposits is determined by the amount of taxes an employer reported in a prior period. This system matches the deposit schedule with the size of the employer’s payroll tax liability and dictates whether they follow a monthly or semi-weekly schedule.
Determining Your Deposit Schedule
The IRS establishes an employer’s deposit schedule for a calendar year based on a “look-back period.” For employers filing Form 941, the look-back period is the 12-month period ending on June 30 of the prior year. For example, to determine the schedule for 2025, an employer examines their total tax liability reported on Forms 941 from July 1, 2023, through June 30, 2024.
This look-back analysis determines if the business follows a monthly or semi-weekly schedule. If an employer’s total employment taxes for the look-back period were $50,000 or less, they are a monthly depositor. Conversely, if their total taxes exceeded $50,000, they must use the semi-weekly deposit schedule for the entire upcoming calendar year.
New businesses without a look-back history have a tax liability considered to be zero for that period. As a result, new businesses automatically begin as monthly depositors. They will continue on this schedule until their accumulated tax liability places them into the semi-weekly category based on a future look-back analysis.
Semi-Weekly Deposit Deadlines
A semi-weekly depositor must follow a payment schedule tied directly to their payroll dates. The rules are based on two specific payment windows within the week, not the calendar week.
The deposit due dates are determined by which part of the week the payday falls. For paydays on a Wednesday, Thursday, or Friday, the tax deposit is due by the following Wednesday. For paydays on a Saturday, Sunday, Monday, or Tuesday, the deposit must be made by the following Friday. This system means a business might make two deposits in a single week.
Legal holidays can affect these deadlines. If a scheduled deposit due date falls on a legal holiday, the deposit is timely if made by the close of the next business day. For instance, if a deposit is due on a Wednesday that is a federal banking holiday, the deadline is extended to Thursday. Statewide holidays that are not federal banking holidays do not delay the due date for federal tax deposits.
The Next-Day Deposit Rule
An exception known as the next-day deposit rule can override both monthly and semi-weekly schedules. If an employer accumulates a tax liability of $100,000 or more on any single day, the standard schedule no longer applies.
When the $100,000 threshold is met, the employer must deposit the funds by the close of the next business day. This rule applies to both monthly and semi-weekly depositors. For example, if a business runs a bonus payroll on Monday and accumulates $110,000 in taxes, the deposit must be made by Tuesday.
Triggering this rule has lasting consequences. An employer who makes a next-day deposit automatically becomes a semi-weekly depositor for the rest of the current calendar year and for the entire following calendar year, regardless of their look-back period liability.
How to Make Federal Tax Deposits
All federal tax deposits must be made electronically using the Electronic Federal Tax Payment System (EFTPS). The IRS mandates this online system, and paper coupons or checks are generally no longer used for these deposits.
To use the system, an employer must first enroll. This process requires providing business information and can take time to complete, so it should be done well in advance of the first tax due date. Once enrolled, making a payment requires the employer’s Employer Identification Number (EIN), a Personal Identification Number (PIN), and a password.
When making a payment through EFTPS, the user must specify the tax form, the relevant tax period, and the exact payment amount. The system provides an EFT Acknowledgment Number as a receipt. For a deposit to be timely, it must be scheduled through EFTPS by 8 p.m. Eastern time the day before the due date.