Payroll deposit schedules: monthly, semiweekly, and the $100k rule

The IRS does not let employers hold withheld payroll taxes until the quarterly return. It assigns each employer a deposit schedule — monthly or semiweekly — based on a backward-looking measurement called the lookback period, and requires deposits through EFTPS on that rhythm. Your schedule is determined once a year, before the year starts, and it depends on the size of your past liabilities, not your current ones.

The lookback concept

Each November-ish, before the new year, determine your status from the lookback period: for Form 941 filers, the twelve months ending the previous June 30 (so for calendar 2026, the four quarters from July 2024 through June 2025). Total the employment taxes reported on those four 941s:

New employers have no lookback history, so they start as monthly depositors. The measurement is what you reported, which is one more reason the 941s must be right — see /bookkeeping/payroll-compliance/form-941-basics. Full mechanics are in Publication 15.

What each schedule requires

Monthly: deposit each calendar month's accumulated liability by the 15th of the following month. One deposit a month, easy to systematize.

Semiweekly: deposits follow paydays.

You always get at least three business days, and legal holidays push the date. Semiweekly filers also report liability by payday on Schedule B of the 941 — liability incurred, not deposits made.

The $100,000 next-day rule

Accumulate $100,000 or more of undeposited liability on any day within a deposit period, and the deposit is due the next business day — your regular schedule is irrelevant. This is the rule that catches growing businesses off guard: a large bonus run or an acquisition-driven jump in headcount can trigger it once, unexpectedly. Two side effects make it worse: a monthly depositor who trips the rule immediately becomes a semiweekly depositor for the rest of the year and all of the next, and the failure-to-deposit penalty tiers apply from day one.

What to do

1. Recompute your status each December from the lookback quarters; don't assume last year's answer.
2. Calendar the deposit dates for the year (they belong on the master calendar at /bookkeeping/payroll-compliance/compliance-calendar-small-business).
3. Before any unusually large payroll — bonuses, severance — check whether the run crosses $100,000 of accumulated liability.
4. Match every EFTPS confirmation to the ledger's liability accounts, so the 941 reconciliation is clean.

Deposit penalties tier up with lateness, and they arrive by mail months later; reading those notices is covered in /bookkeeping/payroll-compliance/penalty-notices-payroll.