Payroll Tax Filing: US Employer Tax Forms and Deadlines

Payroll tax filing is a critical yet often misunderstood aspect of running a business. Whether you're managing payroll for a large corporation or a small team, keeping up with payroll taxes ensures your business remains compliant while avoiding costly penalties.  

Handling payroll taxes in the US might feel overwhelming, especially with all the rules and responsibilities involved. But staying compliant is essential to avoid penalties, and breaking it down simply can help. 

What is payroll tax filing and what's involved? 

Payroll tax filing is the process employers in the US must follow to report and pay taxes withheld from employee wages to the government.  

Employers are responsible for calculating the correct amounts to withhold from employee wages and salaries, submitting those taxes to the IRS and state agencies, and filing related forms in time for payroll year-end. 

To begin, we’re breaking it down into two fundamental components of payroll tax filing that every business needs to address: filing federal and state taxes and reporting payroll taxes. 

Step one: Filing Federal and State Payroll Taxes  

When you process your payroll, you'll need to calculate and file specific taxes owed to both the federal and state governments. These often include key taxes such as: 

• federal Insurance Contributions Act (FICA) taxes, which cover Social Security tax and Medicare taxes 

• federal income taxes withheld from employee wages and paychecks.  

Filing federal payroll taxes typically involves submitting Form 941 (Employer’s Quarterly Federal Tax Return) or Form 944 (Employer’s Annual Federal Tax Return). These forms report what employers withhold from employees’ paychecks, as well as their portion of Social Security tax and Medicare taxes.  

On the state level, requirements vary depending on where your business operates. State payroll taxes might include unemployment insurance tax and additional income tax withholdings. Always check with your local state tax agency for specific forms and filing deadlines.  

Step two: Reporting payroll taxes 

Once you’ve begun filing your payroll taxes, you’ll also need to correctly report them.  

Reporting payroll taxes involves documenting all employee earnings, tax withholdings, and employer contributions. These reports are mandatory and provide governments with insights into your tax compliance.  

Key forms used in payroll reporting include: 

• W-2 forms for employees, which outline total earnings and tax withholdings for the year for your permanent, employed workers.  

• Form 1099-NEC, which summarizes payments made to independent contractors. 

• Any other state-specific tax reports as required.  

Payroll tax management doesn’t stop at filing and reporting. You must also make timely payroll tax payments—which are usually submitted electronically via the IRS’s Electronic Federal Tax Payment System (EFTPS).  

The key to submitting payroll taxes 

Accurate and timely payroll tax compliance hinges on three main steps: 

Paying and Submitting Payroll Taxes 

To remain compliant, you must deposit payroll taxes on time depending on time—typically, this will be semi-weekly or monthly but it will depend on your business’ filing frequency.  

These payments include portions withheld from employee wages and the employer’s share, such as Social Security tax and Medicare taxes. Ensuring timely payments helps businesses avoid costly penalties and interest. 

Filing Payroll Tax Forms 

Submitting tax forms is another critical step in payroll tax compliance. Employers must file forms like W-2s and 1099s, so you can accurately report on what’s been paid and withheld. 

Keeping Payroll Records 

Proper recordkeeping is essential when it comes to payroll tax management.  

As an employer, you should maintain detailed payroll records, including tax filings, payments, and employee wage histories. These records may be required during audits or compliance checks, and it's advisable to keep them for a minimum of four years. 

Making sure taxes are handled correctly isn’t just about following the rules—it’s about protecting your business from penalties.  

Many businesses find it easier to outsource their payroll operations to a payroll bureau service, which will handle payroll calculations, wage distribution, and payroll tax filing on their behalf. As part of this service, their payroll bureau provider will ensure deadlines are met and everything is handled accurately.  

Whether you know exactly how to file payroll taxes (and are happy to do it yourself) or you prefer to hand over payroll tax management to the experts, staying organized with payroll tax filing is key to a healthy business. 

Preparing for payroll year-end 

There’s also a connection between filing payroll taxes and wrapping up at payroll year-end.  

Payroll year-end is essentially the time when businesses wrap up their payroll processing for the year. It involves reconciling payroll records, ensuring all tax withholdings are accurate, and preparing the necessary tax forms for employees, contractors, and government agencies.  

Filing payroll taxes goes hand-in-hand with payroll year-end, as it requires submitting accurate reports and payments to meet federal requirements. Think of it as the final check to ensure everyone—employees, contractors, and Uncle Sam—gets what they’re owed. 

Which payroll tax forms are required for filing by employers? 

When it comes to preparing payroll taxes, accuracy is everything. Each form serves a specific purpose, and missing even one can lead to compliance issues.  

Here’s a breakdown of the key employer tax forms you’ll need: 

1. Form W-2 – Wage and tax statement 
Form W-2 is one of the most common tax forms employers need to issue at payroll year-end. The W-2 tax report covers each employee's annual earnings and tax withholdings; they’re only required for workers who are permanent employees. 

As part of this responsibility, employers must: 

• Provide W-2 forms to employees by January 31^st 

• File copies of these forms to the Social Security Administration (SSA). 

Completing W-2 forms is also important for your permanent worker. Employees need a copy of their W-2 form to complete their personal tax filings on time, so accuracy is vital. 

2. Form W-3 – Transmittal of wage and tax statements 
The W-3 form is the summary sheet for all W-2 forms issued by an employer.  

As part of your payroll tax filing, you’ll submit this form alongside the W-2s to the SSA. Think of it as a "cover letter" that consolidates all the employee wage and tax information for the year. 

3. Form 1099-NEC  – Non-employee compensation 
If you paid an independent contractor $600 or more throughout the year, you’ll need to send them a 1099-NEC form.  

The 1099 form reports non-employee income, such as payments to freelancers or contractors. This is why you often hear recipients of the 1099 form within a business as “1099 workers”. 

4. Form 1096 – Annual summary and transmittal of U.S. information returns 
For employers who are required to file 1099 forms, the IRS also requires you to complete and submit a 1096 form.  

The 1096 form serves as a summary of all 1099-NEC and 1099-MISC forms you issued. Essentially, it’s the contractor equivalent of the W-3 form, and serves as a sort of “covering letter” for these types of tax filings. 

5. Form 940 – Employer’s annual federal unemployment (FUTA) tax return 
Form 940 reports all Federal Unemployment Tax Act (FUTA) taxes, which fund unemployment benefits. Not all employers are subject to FUTA taxes, but if you are, you’ll need to file this annual return. 

6. Form 941 – Employer’s quarterly federal tax return 
Form 941 is a recurring requirement for larger employers. It reports: 

• Federal income taxes withheld from employees’ paychecks 

• Social Security taxes 

• Medicare taxes (including the employer’s contributions). 

It’s worth noting that Form 941 is filed quarterly, but reconciling all four during payroll year-end ensures your records align. 

7. Form 944 – Employer’s annual federal tax return 
Smaller employers who owe $1,000 or less in annual payroll taxes can avoid quarterly filings by using Form 944. This form consolidates your federal tax reporting into a single annual return. If this applies to your business, it’s worth confirming with the IRS. 

8. Form 945 – Annual return of withheld federal income tax 
Form 945 is used to report nonpayroll income tax withheld, such as taxes withheld from pension distributions, annuities, or gambling winnings.  

It’s less common but important to file the 945 form if you handle nonpayroll tax withholdings. 

9. Form 1095-C – Employer-provided health insurance offer and coverage 
If you’re an employer with 50 or more full-time employees, the Affordable Care Act (ACA) requires you to submit Form 1095-C.  

This form provides details about the health insurance coverage you offer your employees and helps them determine their health coverage under the ACA. 

Key payroll tax forms and their due dates

Federal tax payments and tax withholding 

Federal tax payments ensure that employers can properly fulfil their tax obligations to the IRS based on the wages paid to employees.  

In most cases, federal tax payments typically include federal taxes (or income taxes), Social Security taxes, and Medicare taxes. 

You may have seen the latter of these two types of tax payments referred to as FICA taxes. FICA stands for the Federal Insurance Contributions Act and covers programs that provide benefits for retirees, people living with disabilities, and children of workers who have died in service. FICA taxes is a short-hand way of describing both Social Security taxes and Medicare taxes. 

For employers, these tax payments are a regular part of payroll operations and must adhere to strict IRS guidelines to avoid penalties. Employers are required to deposit these taxes either monthly or semi-weekly—the exact frequency depends on an employer’s deposit schedule, which is determined by the IRS based on historical tax liability. 

What do federal tax payments include? 

Let’s take a closer look at the main components of federal tax payments and tax withholding… 

Federal Income Tax 
This tax is withheld from employees' wages by employers and is determined based on the personal and financial information the employee provides on their Form W-4.  

The amount withheld depends on factors such as marital status, number of dependents, and any additional withholding amounts specified by the employee. 

Social Security Tax 
Employers are required to withhold 6.2% of an employee’s wages for Social Security tax purposes, which funds retirement, disability, and survivor benefits.  

Employers must also match this contribution, resulting in a total of 12.4% per employee. This ensures both employers and employees contribute equally to the Social Security program, which supports millions of Americans. 

Medicare Tax 
Employers are required to withhold 1.45% of an employee's wages for Medicare and match that amount themselves, bringing the total up to 2.9%.  

Medicare tax helps fund the Medicare program, which provides health insurance primarily for individuals aged 65 and older. For high earners, an additional Medicare Tax of 0.9% applies to wages above a certain threshold, depending on the individual's filing status.  

However, this additional tax is only withheld from the employee’s wages, and employers are not required to match it.  

How to pay payroll taxes 

Now we have a clearer understanding of what federal taxes are payable and why tax withholding occurs, let’s examine how employers go about paying payroll taxes. 

In the U.S., submitting tax payments is done via the IRS’s Electronic Federal Tax Payment System (EFTPS). This is what that looks like in action: 

1. Calculate withheld taxes 
Use payroll software, a reliable payroll service provider or calculate how much tax needs to be withheld manually by combining federal taxes and FICA taxes (A.K.A. Social Security taxes and Medicare taxes). 

2. Deposit tax payments 
Based on your IRS-assigned schedule (monthly or semi-weekly), deposit the calculated tax amounts using EFTPS. 

3. Submit payroll tax forms 

• File Form 941 (the Quarterly Federal Tax Return) to report income tax, Social Security taxes, and Medicare taxes. 

• Fse Form 944 if your business has minimal tax liability (as directed by the IRS). 

• File Form 940 (which reports Federal Unemployment Taxes (FUTA)) separately from employee-paid taxes. 

The role of tax withholding in payroll tax filing 

Tax withholding simplifies the process of ensuring employees and businesses meet their tax obligations.  

When an employee earns wages, federal taxes aren’t paid all at once. Instead, a portion of the employee’s earnings is set aside (or withheld) with every paycheck. In turn, employers are responsible for depositing withheld taxes along with the employer’s share of Social Security and Medicare taxes. 

This process helps employees avoid a massive tax bill at the end of the year by spreading their tax payments out evenly over the calendar year. 

The importance of Form W-4 

The W-4 form, also known as the Employee’s Withholding Certificate, plays a central role in tax withholding.  

Every employee fills out this IRS form when they start a new job or when life circumstances (like getting married or having children) change their tax situation. 

Form W-4 provides employers with the information needed to calculate how much federal income tax to withhold from the employee’s paycheck. Here’s what it covers and how the results of each category can impact the worker’s tax withholding: 

Marital status 
A worker’s marital status will affect the withholding rate and can significantly impact the amount of taxes withheld from a worker’s paycheck. For example, married individuals may qualify for lower withholding rates compared to those who are unmarried. 

Dependents 
In this case, a dependent is a qualifying child or relative who relies on you for financial support. The number of dependents you may have determines the potential reductions in taxable income—this is achieved by identifying eligible deductions, credits, or adjustments that can lower the amount of income subject to taxation. 

Additional income 
Employees have the option to request extra amounts to be withheld from their paycheck to cover taxes on other income sources, such as freelance work, investments, or side jobs. This ensures they can stay on top of their tax obligations and avoid surprises during tax season. 

Adjustments 
Employees can fine-tune their tax withholding by updating their W-4 form, allowing them to better match their withholding to their actual tax situation. This helps ensure they won’t owe a large tax bill at the end of the year or receive an excessively large refund, giving them more control over their finances throughout the year. 

Whenever an employer brings someone new into the team, they must have that new employee complete a W-4 form. Once received, this information is input into payroll systems to automate accurate withholding calculations. 

Why proper payroll tax filing matters 

Effortless payroll tax management ensures compliance, builds employee trust, and minimizes the risk of fines or penalties. Here are a few benefits of getting it right: 

• Accuracy: Proper tax withholding, deposits, and filings prevent under- or over-payment issues. 

• Timeliness: Sticking to deposit schedules and filing deadlines keeps you on good terms with the IRS. 

• Employee Satisfaction: Employees trust you to calculate and withhold the right amount, so it’s crucial to get it right. 

Managing payroll tax payments and withholding can seem complex, but understanding the basics—like federal tax components, deposit schedules, and the W-4 form—will simplify the process. Using tools like payroll software or consulting with a trusted payroll service provider can make federal tax filing easier and error-free. 

For more detailed guidance on handling year-end payroll tasks, including step-by-step preparation, required reports, and compliance tips, download our expert resource, Mastering Year End Payroll.