To pay FICA taxes, an employer withholds 7.65% from each employee’s paycheck (6.2% Social Security plus 1.45% Medicare), adds a matching 7.65% from the business, and deposits the combined amount electronically with the IRS. Deposits go through the Electronic Federal Tax Payment System (EFTPS) on either a monthly or semi-weekly schedule, determined by how much tax the business reported during a prior lookback period. Self-employed people pay the equivalent tax themselves in four estimated installments across the year. For 2026, the 6.2% Social Security portion stops once an employee’s wages pass $184,500; the 1.45% Medicare portion has no cap.1Social Security Administration. Contribution and Benefit Base
The Rates You’re Actually Depositing
The combined FICA rate is 15.3%, split evenly between employer and employee: 6.2% each for Social Security and 1.45% each for Medicare.2Social Security Administration. Social Security and Medicare Tax Rates These rates are fixed by statute and have been unchanged since 1990. Each payroll run, you pull the employee’s 7.65% out of gross wages and set aside your own matching 7.65%. The two halves get deposited together.
Once a given employee’s cumulative pay for the year reaches $184,500, the Social Security piece shuts off for both of you. Medicare keeps going on every dollar. On top of that, an Additional Medicare Tax of 0.9% kicks in once an employee crosses $200,000 in a calendar year, and you must begin withholding it at that point regardless of the employee’s filing status.3Internal Revenue Service. Topic No. 560, Additional Medicare Tax You do not match the extra 0.9%, and you cannot stop withholding it even if the employee asks because they expect to stay under the joint-filer threshold of $250,000.4Internal Revenue Service. Questions and Answers for the Additional Medicare Tax
Setting Up Electronic Deposits Through EFTPS
Federal employment tax deposits must be made electronically.5Internal Revenue Service. Depositing and Reporting Employment Taxes Most employers use EFTPS. Enrollment requires your Employer Identification Number and bank account information, and the IRS mails a PIN to your business address as a verification step. After enrollment, you schedule each deposit online or by phone and the system pulls the funds from your account on the date you set. To count as timely, a payment has to be scheduled by 8:00 p.m. Eastern the day before the due date.6Electronic Federal Tax Payment System. Welcome to EFTPS Online
Alternatives include IRS Direct Pay for businesses, an ACH credit initiated by your bank, or deposits handled by a payroll provider on your behalf. Whatever channel you pick, the deposit itself has to clear electronically.
Monthly or Semi-Weekly: Which Schedule Applies
Your deposit schedule depends on a lookback period. For Form 941 filers, that period covers the four quarters ending the previous June 30. If total employment taxes reported during the lookback were $50,000 or less, you are a monthly depositor and must deposit each month’s taxes by the 15th of the following month. If the total was more than $50,000, you are on the semi-weekly schedule.7Internal Revenue Service. Publication 15 (Circular E), Employer’s Tax Guide
Semi-weekly deadlines are driven by payday:
- If payday falls on Wednesday, Thursday, or Friday, the deposit is due the following Wednesday.
- If payday falls on Saturday, Sunday, Monday, or Tuesday, the deposit is due the following Friday.
New employers have no lookback history, so the IRS treats prior-period liability as zero and puts every new business on the monthly schedule for at least the first calendar year.8Internal Revenue Service. Topic No. 757, Forms 941 and 944 – Deposit Requirements
The $100,000 Next-Day Rule
If your tax liability reaches $100,000 or more on any single day, the regular schedules do not apply. You must deposit by the next business day, and you automatically become a semi-weekly depositor for the rest of the calendar year and the following year. Businesses with large bonus payrolls or commission runs get caught by this if they are not tracking daily liability.
Reporting the Deposits on Form 941
Employers reconcile FICA and withheld income taxes quarterly on Form 941, which reports total wages paid, employee withholding, the employer match, and every deposit made during the quarter.9Internal Revenue Service. About Form 941, Employer’s Quarterly Federal Tax Return The return includes a line for Additional Medicare Tax withheld from employees over $200,000. Form 941 is not where you pay; it is where you prove what you already deposited matches what you owed.
Due dates fall on the last day of the month after each quarter ends: April 30, July 31, October 31, and January 31 for the prior fourth quarter. If a due date hits a weekend or legal holiday, it shifts to the next business day. Employers who deposited all taxes for the quarter on time and in full get an extra 10 days to file.10Internal Revenue Service. Instructions for Form 941 (Rev. March 2026)
If you later discover you over-reported or under-reported, you correct a prior quarter with Form 941-X, filing a separate correction for each quarter involved. Under-reported taxes should be corrected and paid by the end of the quarter in which you discover the error to avoid interest.11Internal Revenue Service. Instructions for Form 941-X
Very Small Employers: Form 944
If your total annual liability for Social Security, Medicare, and withheld income taxes is $1,000 or less, you may qualify to file Form 944 instead of Form 941 and pay just once a year.12Internal Revenue Service. About Form 944, Employer’s Annual Federal Tax Return The IRS usually notifies employers who qualify, but you can also request to switch by contacting the IRS before the calendar year begins.
Household Employers
If you pay a nanny, housekeeper, or other household worker $3,000 or more in cash wages during 2026, you owe FICA on those wages. Below $3,000, no FICA obligation applies.13Internal Revenue Service. Publication 926 (2026), Household Employer’s Tax Guide Household employers do not file Form 941. Instead, you report and pay the employment taxes once a year on Schedule H, filed with your personal Form 1040, and you still owe the worker a Form W-2 by January 31.
If You’re Self-Employed: Quarterly Estimated Payments
Sole proprietors, partners, and independent contractors pay the full 15.3% themselves under the Self-Employment Contributions Act (SECA): 12.4% for Social Security and 2.9% for Medicare.14Office of the Law Revision Counsel. 26 USC 1401 – Rate of Tax You owe SECA once your net earnings from self-employment reach $400 for the year.15Internal Revenue Service. Self-Employment Tax (Social Security and Medicare Taxes)
The tax applies to 92.35% of your net earnings, which mirrors the deduction W-2 employers get on their share. The $184,500 Social Security wage base still caps the 12.4% piece; the 2.9% Medicare piece continues on all earnings, and the 0.9% Additional Medicare Tax applies above the same filing-status thresholds that W-2 workers face.16Internal Revenue Service. Topic No. 554, Self-Employment Tax
You pay SECA through the federal estimated tax system, sending four installments with Form 1040-ES.17Internal Revenue Service. About Form 1040-ES, Estimated Tax for Individuals The 2026 due dates are April 15, 2026; June 15, 2026; September 15, 2026; and January 15, 2027. You can skip the January 15 payment if you file your 2026 return by February 1, 2027, and pay the full balance with it.18Internal Revenue Service. Form 1040-ES (2026) A due date that falls on a weekend or holiday moves to the next business day.
For the actual payment, IRS Direct Pay pulls funds from a checking or savings account at no cost.19Internal Revenue Service. Direct Pay with Bank Account EFTPS also works for self-employed filers, with the added benefit of scheduling payments in advance and keeping payment history in one place. Check vouchers in the 1040-ES package are still accepted, but electronic payment leaves you with a confirmation record that paper doesn’t.
At year end, your net profit from Schedule C flows to Schedule SE, which applies the 92.35% multiplier and the 15.3% rate. The result transfers to Form 1040 and is added to your income tax. You also deduct half of your total SECA when calculating adjusted gross income, which reduces income tax but not the SECA itself.16Internal Revenue Service. Topic No. 554, Self-Employment Tax
What Happens If You’re Late
Late employment tax deposits trigger a sliding penalty based on how late the deposit arrives:
- 1 to 5 days late: 2% of the unpaid amount
- 6 to 15 days late: 5%
- 16 or more days late: 10%
- After an IRS notice demanding payment: 15%
The tiers do not stack. A deposit 10 days late carries 5%, not 7%. Depositing through an unauthorized method, or failing to use electronic deposit when required, also triggers a 10% penalty.20Internal Revenue Service. Failure to Deposit Penalty
Filing Form 941 late carries a separate penalty of 5% of the unpaid tax for each month or partial month the return is overdue, up to 25%. If a late-payment penalty (0.5% per month) also applies, the late-filing penalty is reduced by the late-payment amount so the same period is not charged twice.21Internal Revenue Service. Failure to File Penalty
Trust Fund Recovery Penalty
The amounts you withhold from employee paychecks are trust fund taxes, held in trust for the government. If those withheld amounts never get deposited, the IRS can assess the Trust Fund Recovery Penalty against any individual who was responsible for the deposits and willfully failed to make them. The penalty equals 100% of the unpaid trust fund amount, plus interest.22Internal Revenue Service. Trust Fund Recovery Penalty
A “responsible person” can be a corporate officer, a partner, a sole proprietor, or an employee with authority over the business’s finances. The “willful” standard does not require intent to defraud. Choosing to pay vendors or rent instead of depositing payroll taxes qualifies. The penalty follows individuals personally even if the business closes or files bankruptcy, which is why keeping deposits current matters more than almost any other payroll task.