# Month-end close: federal payroll tax in the US Every US employer does these four federal steps whatever the state, and the deposit schedule comes from the lookback period, not from this year's payroll. This is part of the [payroll checklist](/month-end-close-checklist/payroll). Every US employer does these four steps, whatever the state. The state steps come after them. **Rate.** For 2026, Social Security is 6.2% from the employee and 6.2% from the employer on wages up to $184,500 per employee. Medicare is 1.45% each, on all wages. FUTA is 6.0% on the first $7,000 paid to each employee, usually reduced by a credit to 0.6%. **Filing.** The schedule comes from the four quarters ending June 30 of the previous year. $50,000 or less of these taxes in it means deposits monthly, and above $50,000 means semi-weekly. Form 941 is filed every quarter. **Due.** Monthly deposits by the 15th of the following month. Form 941 on April 30, July 31, October 31 and January 31. **The trap.** On any day the undeposited tax reaches $100,000, it's due the next business day, whatever the schedule. And in a "credit reduction" state, the FUTA credit is cut and the extra tax is due by January 31. ## The month-end steps 1. **Withholding: income tax, Social Security and Medicare.** Withhold federal income tax from each wage payment according to the employee's Form W-4 and the correct withholding table in Publication 15-T [1]. For 2026, Social Security is 6.2% withheld from the employee and 6.2% paid by the employer, on wages up to $184,500 per employee. Medicare is 1.45% each, on all wages [1]. The employee alone also pays Additional Medicare of 0.9% on wages over $200,000 in a calendar year; there's no employer share [1]. If employees get tips, as in a café or restaurant, cash tips are generally subject to withholding. Cash tips include tips paid by cash, check, debit card and credit card, and an employee must report them to the employer by the 10th of the month after they're received. Tips go on the W-2 and on Form 941, lines 5b and 5c [1]. Done when the month's federal income tax withheld, Social Security and Medicare withheld, and the employer's match all tie to the payroll register, including reported tips, and no employee's Social Security wages go over $184,500 for the year. 2. **The deposit schedule.** The client's schedule comes from its lookback period: the four quarters ending June 30 of the previous year. For 2026, that's July 1, 2024 to June 30, 2025 [1]. An employer that reported $50,000 or less of these taxes in it deposits monthly, by the 15th of the following month. Above $50,000, it deposits semi-weekly: taxes on Wednesday, Thursday or Friday paydays by the following Wednesday, and on Saturday to Tuesday paydays by the following Friday [1]. On any day the undeposited tax reaches $100,000, it's due the next business day [1]. An employer whose tax for the current or prior quarter is under $2,500 may pay with the return instead [1]. A deposit due on a weekend or legal holiday is on time if made the next business day [2]. Done when the federal payroll liability accounts are at zero after the month's deposits, or equal tax not yet due. 3. **Form 941, every quarter.** It's due April 30, July 31, October 31 and January 31 for the quarters ending March, June, September and December. If every deposit for the quarter was on time, it may be filed by the 10th of the second month after the quarter ends. A due date on a weekend or legal holiday moves to the next business day [2], so the return for October to December 2026 is due on the business day after Sunday, January 31, 2027. The IRS matches the year's four Forms 941 against the W-2 totals on Form W-3 [2]. Done when each 941 ties to the quarter's payroll register and deposits, and the four quarters add up to the year's W-2s. 4. **Federal unemployment tax (FUTA).** It's 6.0% on the first $7,000 paid to each employee in a year. A credit for state unemployment tax usually brings it to 0.6% [3] [4]. In a "credit reduction" state, one that hasn't repaid federal unemployment loans, the credit is cut by 0.3% in the first year and more each year after. The Department of Labor names those states each November on its [FUTA credit reductions page](https://oui.doleta.gov/unemploy/futa_credit.asp), and the extra tax is due by January 31 [3]. When the year's FUTA tax is more than $500, deposit at least one quarterly payment; a quarter with $500 or less carries over to the next [4]. The annual return is Form 940 [4]. Done when the FUTA liability account equals 0.6% of each employee's wages up to $7,000, plus any credit reduction, less deposits made. ## Sources 1. IRS, Publication 15 (2026), Employer's Tax Guide, read 2026-10-19: Social Security 6.2% each, wage base $184,500; Medicare 1.45% each, no wage base; Additional Medicare 0.9% over $200,000, no employer share; lookback period July 1 to June 30 and the $50,000 test (Table 1, lookback period for 2026: July 1, 2024 to June 30, 2025); Form W-4 and Pub. 15-T for income tax withholding; cash tips reported by the 10th of the following month, subject to withholding, and on Form 941 lines 5b and 5c; monthly and semi-weekly deposit rules; $100,000 next-day rule; under $2,500 may pay with the return. 2. IRS, Instructions for Form 941, read 2026-10-19: quarterly due dates; the 10th of the second month if all deposits were timely; weekend and legal holiday rules for filing and deposits; the IRS matches the four Forms 941 with the W-2 totals on Form W-3. 3. IRS, FUTA credit reduction, read 2026-10-19: FUTA is 6.0% on the first $7,000, 0.6% net after the 5.4% credit; credit reduction of 0.3% in the first year and more after; the DOL announces the states after November 10 on its FUTA Credit Reductions page; the extra tax is due by January 31. 4. IRS, Instructions for Form 940 (2025 edition), read 2026-10-19: the $7,000 wage base per employee; deposit at least one quarterly payment when the year's FUTA tax is more than $500; carry a quarter of $500 or less to the next. --- Published 2026-10-24. Web page: https://www.bookkeepingforsmallbusiness.com/month-end-close-checklist/payroll/united-states Part of [Month-end close: payroll liabilities by jurisdiction](https://www.bookkeepingforsmallbusiness.com/month-end-close-checklist/payroll).