Payroll taxes are due from every employer paying wages to employees, no matter how many employees are on the payroll. These taxes are reported on Form 941, which includes federal income tax withholding, Social Security and Medicare. Employers will pay either monthly, semi-weekly or quarterly, depending on their lookback period. Monthly depositors must pay each month's liability by the 15th of the following month, unless the 15th is on a weekend or holiday. All depositors must file Form 941 quarterly.
Calculate the gross amount of earnings for the month for each employee. For example, if you are making your tax deposit on the 15th of February, you are paying for January. Thus, you are looking solely at January's wages for each employee.
Calculate your employee's Social Security withholding. Multiply gross wages by 6.2 percent. Withhold the result from the employee's wages. Your company will match that for a total of 12.4 percent.
Figure the amount of Medicare tax to withhold. Multiply the gross wages by 1.45 percent. Again, your company will match that, for a total of 2.9 percent.
Calculate the amount of federal tax to withhold. This is more difficult than calculating Social Security or Medicare taxes because federal withholding is different for each employee. You will have to use the information provided on Form W-4 that each employee completed. You will withhold based on the number of withholding allowances listed. Use the federal withholding tables starting on page 39 of Circular E, the Employer's Tax Guide (See Resources).
Fill out your monthly 941 deposit coupon, Form 8109-B, with the correct deposit amount and take the coupon, along with a check in the correct amount, to your bank to deposit. If you are a new business or do not have any federal tax deposit coupons, call the Internal Revenue Service at 800-829-4933 to order coupons. Allow about six weeks to receive your coupon book. As of Dec. 31, 2010, federal tax deposit coupons will no longer be accepted. Some financial institutions are already refusing to accept them; thus, you will need to enroll in the IRS' Electronic Federal Tax Payment System to make 941 tax payments, as well as other tax payments.
Enroll in the Electronic Federal Tax Payment System by visiting their website and entering your business information. Once your account has been created you can make your federal tax deposits online using your credit card or scheduling electronic funds transfers from your bank account.