Payroll taxes are an integral part of running a business. As an employer, paying employees properly is one of the most essential things that you can do. However, it isn’t as easy as it may seem. Here’s what you should know about the payroll tax return.

What Are Payroll Taxes?

These taxes, and their percentages, are: 

• Medicare taxes: 1.45% of wages
• Social Security taxes: 6.2%, up to $142,800 of employee’s income (for 2021)

There are two additional payroll taxes for employers:

• Federal unemployment taxes
• State unemployment taxes

Employer Responsibility for Payroll Taxes

Employers have several responsibilities for the payroll taxes they must complete. Even after paying employees, employers must also: 

• Account for payroll expenses in their financial reporting
• Deposit tax dollars withheld from employees’ paychecks
• File payroll tax returns
• Pay employer’s share of payroll taxes
• Prepare reconciliation reports

Tax Return Rules

Tax return rules for FUTA taxes are straightforward, especially if you’re liable for under $500 quarterly: 

• If your FUTA tax liability is $500 or less, you can skip the current quarter and pay when the liability is at least $500.
• The due date will be the same as for employers that owe more than $500. 
• If your liability for the fourth quarter is over $500, you’ll deposit the entire amount by the due date of Form 940.

Deposit Due Dates

FUTA taxes have a deposit due date that is the last day of the first month following the quarter’s end.  

• Q1 (ends on March 31): Due date of April 30 
• Q2 (ends on June 30): Due date of July 31
• Q3 (ends on September 30): Due date of October 31
• Q4 (ends on December 31): Due date of January 31 of the next year

If your FUTA tax due date falls on a legal holiday, Saturday, or Sunday, you can make your deposit the next business day.

Two additional due dates may occur in the fourth quarter:

• For employers with a liability of at least $500, you’ll deposit the entire amount by January 31.
• If your liability for the fourth quarter is $500 or less, you have more payment options:
  • You can make a deposit
  • Pay the FUTA tax with a credit or debit card
  • Pay the tax with Form 940.

Each of the payment options has a due date of January 31.

FICA Tax

FICA taxes consist of two categories that both the employee and employer pay:

• Medicare (1.45%)
• Social Security (6.2%)

The employee and employer pay half, which adds to a total of 15.3%. There’s an additional Medicare tax of 0.9% that employees will pay if they earn more than $200,000 annually (single) or $250,000 (married).

Deposit Rules

There are two deposit schedules available for employers filing FICA taxes: monthly and semi-weekly. 

• The monthly deposit schedule allows employment tax payments by the 15th of the following month. 
• Employers can use Form 941 (quarterly) or Form 944 (annually) to report their deposits.
• The semi-weekly deposit schedule allows employment tax payments on Wednesday, Thursday, and/or Friday to be due by Wednesday. 
• Deposit taxes made from Saturday to Tuesday (or multiple days during this window) are due by the following Friday.