What is required of employers regarding the deposit of Social Security and Medicare taxes?

Employers are required to follow a deposit schedule that is based on the amount of Social Security and Medicare taxes they withhold from employees' wages. The Internal Revenue Service (IRS) provides guidelines that categorize employers into different deposit schedules, specifically a monthly schedule or a semi-weekly schedule. Large employers, typically those who withhold a significant amount of taxes, must deposit these taxes more frequently compared to smaller employers.

For example, if an employer accumulates over a certain threshold in tax liabilities during a look-back period, they are required to deposit on a semi-weekly basis. Conversely, if their liabilities are below that threshold, they can deposit monthly. This tiered approach ensures that the federal government receives tax revenues in a timely manner based on the employer's payroll size.

A fixed schedule does not apply universally to all employers; it varies depending on how much they owe, which highlights the importance of accurate reporting and adherence to the categorization set by the IRS. This nuanced requirement aims to balance the cash flow needs of the government with the operational capabilities of various employers.