Most growth-stage companies do not configure payroll around a complete list of the taxes they actually owe. They configure it around the taxes someone remembered. The gap between those two lists is where back-deposit liability, missed state registrations, and misclassified pass-through withholding all originate, and none of it shows up until an agency notice does.
This guide walks through five procedures in the order a company actually executes them: identifying which taxes apply, calculating the employer's own liability, registering with the right agencies, depositing and filing on schedule, and auditing the whole system for accuracy. Each procedure states what you need before you start, the steps in order, and what you should have when you're done.
For definitions of the individual terms used throughout, Asure's employer payroll tax glossary covers FICA, FUTA, SUTA, wage bases, and the rest in more depth. This guide assumes you know roughly what those terms mean and focuses on the order of operations for getting them right.
How to Identify Which Payroll Taxes an Employer Must Pay
Before any calculation, registration, or filing can happen correctly, you need a confirmed inventory of which taxes actually apply to your specific business. Skipping this step is what causes every later procedure to misfire, since you can't calculate, register for, or file a tax you never identified in the first place.
What you need first: a confirmed business entity type (LLC, S-corp, C-corp, sole proprietor), an EIN issued by the IRS, a list of every state where employees actually work or are based, and payroll software or a manual register ready for configuration.
Start by confirming your federal employer status. An active EIN and at least one W-2 employee establish your baseline federal FICA and FUTA obligations; a business with only 1099 contractors and no W-2 payroll doesn't carry these obligations at all, which is worth confirming explicitly rather than assuming.
From there, map your FICA obligation. The employer share is 6.2% for Social Security, up to the annual wage base, plus 1.45% for Medicare with no cap, on every W-2 employee's wages. Confirm FUTA applies next. It applies if you paid $1,500 or more in wages during any calendar quarter, or employed at least one worker for 20 or more weeks in the current or prior year, per the IRS Instructions for Form 940. Either condition alone triggers FUTA liability, at up to 6.0% on the first $7,000 of each employee's wages per year.
The step most companies get wrong isn't federal, it's state. List every state where an employee actually performs work, not just the state where the company is incorporated, and confirm each one's SUTA registration requirement separately. A remote hire working from a state where you have no office still creates a SUTA obligation in that state. Once you have that list, check each state for additional employer-paid taxes beyond SUTA. Common examples include:
- State disability insurance, in states such as California, New Jersey, and New York
- Paid family leave contributions, in states that require them
- Local payroll taxes, in cities including New York City, Philadelphia, and Denver
These vary by state and city, so confirm current requirements directly with each jurisdiction's own department of revenue or labor rather than treating this list as exhaustive.
Last, explicitly exclude what doesn't belong on this list. Federal and state income tax withholding, and the employee's own FICA share, are pass-through remittances you collect and forward, not employer costs. Conflating the two is one of the more common ways a payroll budget ends up wrong from the start.
What you should have when you're done: a single reference document listing every tax that applies to your specific footprint, its rate, its wage base, and the agency you file it with. AsureCentral keeps this obligation inventory accurate as your state footprint and entity data change, so it stays current instead of becoming a one-time document someone has to remember to revisit.
How to Calculate Employer FICA, FUTA, and SUTA Contributions
Once you know which taxes apply, the next procedure is computing exactly what you owe on each payroll run. This produces the per-period liability figure that everything downstream, deposits, filings, audits, depends on.
What you need first: the completed tax obligation inventory from the previous procedure, confirmed gross wages for the pay period, the current year's Social Security wage base, and each employee's year-to-date wages tracked in your payroll register.
For 2026, the Social Security wage base is $184,500, up from $176,100 in 2025, per the Social Security Administration. Multiply each employee's gross wages by 6.2% for the employer's Social Security share, and stop once that employee's year-to-date wages cross the wage base for the year, no employer Social Security tax applies above it. Multiply by 1.45% for Medicare, with no wage cap at all, on every dollar. Add the two together for total employer FICA per employee for the period.
FUTA works differently. The gross rate is 6.0% on the first $7,000 of each employee's wages per year, but employers who pay their state unemployment tax on time generally receive a credit of up to 5.4%, bringing the typical net rate to 0.6%, per the IRS Instructions for Form 940. Stop accruing FUTA the moment an employee's year-to-date wages cross $7,000, continuing past that point is the single most common FUTA calculation error, and it overstates your payroll tax expense every time it happens. SUTA is calculated the same way conceptually, applying your state-assigned experience rate to wages up to that state's own wage base, which varies by state and has no relationship to the federal $7,000 figure.
Sum FICA, FUTA, and SUTA together for the total employer payroll tax liability for the period, and post it to your payroll register as an accrued expense at the time payroll runs.
What you should have when you're done: a per-period liability figure, broken out by FICA, FUTA, and SUTA, ready to schedule for deposit. Treat manual recalculation as a periodic spot-check against your payroll software's output. A misconfigured software rule will keep producing the same wrong number every period until someone independently checks it. On AsureCentral, this check is lighter, since the platform tracks each employee's year-to-date wages against the current wage base for you, so a spot-check is confirming the number rather than rebuilding it from scratch.
How to Register for Federal and State Payroll Tax Accounts
Before you issue a single paycheck, you need active accounts with every agency identified in your tax obligation inventory. Operating without them doesn't delay your obligation, it just creates retroactive liability once you do register.
What you need first: the completed tax obligation inventory, a legally formed business entity, Social Security numbers or ITINs for the business owners, and a physical or registered-agent address in every state where you'll have employees.
Confirm or apply for your EIN through the IRS's online EIN application, if you don't already have one. Then enroll that EIN in the Electronic Federal Tax Payment System, EFTPS, which handles federal payroll tax deposits; enrollment typically takes up to five business days to activate, so this isn't a same-day task to complete the week before your first payroll run.
From there, register for each state's income tax withholding account, typically through that state's Department of Revenue or Taxation, for every state where you have employees. Separately register for SUTA in each of those states, typically through the state's Department of Labor or workforce agency, which is what assigns your initial experience rate. Register for any additional state-specific employer programs your inventory identified from the previous procedure, state disability insurance, paid family leave, or similar programs; requirements and program names vary by state, so confirm each one directly with that state's own agency rather than assuming your state's rules match a neighboring one.
Record every account number, portal URL, and login credential in a secure reference document, along with the first filing due date for each one. Then configure your payroll software with each account number so deposits and filings route automatically to the right agency instead of depending on someone remembering to enter it correctly at filing time.
What you should have when you're done: active EFTPS enrollment and state employer tax accounts for every jurisdiction where you operate, all entered into your payroll system and documented in one place. If you'd rather not manage this registration process yourself, AsureWorks specialists handle federal and state account setup directly as part of onboarding a new client, while you remain the employer of record throughout.
How to Deposit and File Employer Payroll Taxes on Schedule
This is the recurring procedure, executed every pay period and at every quarterly and annual deadline, that actually remits what you calculated and files the returns that report it.
What you need first: active EFTPS enrollment and state deposit accounts, a calculated liability figure for the period, and your confirmed IRS deposit schedule.
Your federal deposit schedule, monthly or semiweekly, is set by your lookback period, the total taxes reported across the four preceding quarters. For the 2026 deposit year, employers with $50,000 or less in cumulative liability during that lookback are monthly depositors; employers above that threshold are semiweekly. Regardless of your assigned schedule, any employer that accumulates $100,000 or more in liability on a single day must deposit by the next business day, per IRS Notice 931. New employers default to monthly until they have a full lookback period on record.
Deposit combined employer FICA, employee FICA, and federal income tax withholding through EFTPS by your schedule's deadline, monthly depositors by the 15th of the following month, semiweekly depositors by the Wednesday or Friday tied to your payday. Deposit state income tax withholding and SUTA contributions on each state's own schedule, which varies and doesn't necessarily match the federal calendar.
File Form 941 quarterly, by the last day of the month following each quarter's end, April 30, July 31, October 31, and January 31, per the IRS Instructions for Form 941. File Form 940 annually, due January 31 for the prior year, though an employer that deposited all FUTA tax on time during the year gets a 10-calendar-day extension, moving the practical deadline to on or about February 10, per the IRS Instructions for Form 940. Issue W-2s to employees and file Copy A with the Social Security Administration by that same January 31 deadline, per the Social Security Administration's W-2 filing deadlines.
What you should have when you're done: every deposit made on schedule, every quarterly and annual return filed, and W-2s issued, producing a compliance record with no late-deposit penalties attached to it. If a deposit deadline has already been missed, escalate to a licensed payroll professional or CPA before attempting to self-correct, since penalty abatement has its own procedure and guessing at it can make the underlying exposure worse.
How to Audit Employer Payroll Tax Accuracy
The first four procedures tell you what to do. This one tells you whether you actually did it correctly, and it's the only procedure that catches an error introduced anywhere in the preceding four before it becomes an IRS notice or a state assessment.
What you need first: your payroll register for the audit period with per-employee gross wages and year-to-date totals, EFTPS deposit confirmations for the period, your filed or draft Form 941, and state deposit confirmations and quarterly return drafts.
Reconcile total gross wages in your payroll register against what's reported on your draft Form 941 and state quarterly returns; any mismatch points to a data-entry or payroll-run error somewhere upstream. Independently recalculate employer FICA for each employee, 6.2% up to the wage base, 1.45% uncapped, and compare it against what your software actually produced, flagging anything more than a dollar off. Confirm FUTA accrual actually stopped at $7,000 year-to-date for each employee who crossed that threshold during the period; over-accrual past the cap is one of the more common configuration errors this audit exists to catch.
Verify the SUTA rate your software applied in each state matches the current-year rate notice you actually received from that state, and that the wage base used is current. Then match total deposits made, federal and state, against total computed liability for the period; any shortfall needs to be deposited immediately, with interest, and any overpayment should be applied forward or claimed as a credit.
The last check deserves its own line item, not an afterthought. Spot-check that any worker classified as a 1099 contractor isn't actually performing work that meets the IRS's control test for employee status. Misclassification is a common and expensive source of retroactive employer payroll tax liability, and a review that skips this step is incomplete regardless of how clean the FICA and FUTA math comes out.
Document what you found, what you corrected, and confirmation that deposits and filings now match the verified liability figures.
What you should have when you're done: a signed payroll tax accuracy report, either confirming everything ties out or documenting a specific correction plan for whatever didn't. Run this quarterly, before each Form 941 filing, and again before year-end W-2 issuance. That recurring check is a modest, predictable cost against the alternative of finding the same error a year later, at much higher stakes.
Sequencing the Five Procedures
Run these in order for a new employer. Start with identifying obligations, since skipping it is what causes every later procedure to misconfigure against the wrong tax footprint. Calculate contributions immediately after, since that produces the figures deposit scheduling depends on. Register accounts before issuing any wages at all, not after your first payroll run. Once accounts are active, depositing and filing becomes the recurring procedure you repeat every pay period and at every filing deadline. Run the accuracy audit quarterly, ahead of each Form 941 filing, to catch what the first four procedures missed before an agency does.
If you're inheriting an existing payroll setup rather than building one from scratch, start at the audit instead, confirm the current configuration is actually correct before running the other four procedures on a corrected basis.
Bottom Line
Employer payroll tax compliance is an ordering problem as much as a knowledge one. Identify what applies, calculate it correctly, register before you owe it, deposit and file on the schedule that's actually yours, and audit the whole system on a quarterly rhythm rather than waiting for a notice to tell you something was wrong. None of this promises a guaranteed compliance outcome, and no responsible vendor should claim one. What it produces is a documented, repeatable process you can hand to a new hire, a CPA, or an auditor and have it hold up.
AsureCentral carries this same obligation-inventory-through-audit logic as one connected system, so the sequence above runs as one accountable process instead of five separate manual efforts stitched together after the fact. If you'd rather have Asure specialists execute the calculation, registration, deposit, and filing work directly, AsureWorks handles it as a managed service, with you remaining the employer of record throughout. Talk to Asure about which path fits how your team runs payroll today. Either way, the employer payroll tax glossary is the place to go for term-by-term definitions of anything referenced above.
Related Questions
What is not an employer payroll tax?
Federal and state income tax withholding is not an employer payroll tax. It's the employee's own liability, collected and remitted by the employer as a pass-through. The employee's own FICA share, 6.2% for Social Security and 1.45% for Medicare, works the same way. It's deducted from the employee's wages and remitted alongside the employer's separate matching contribution, a single deduction plus a single employer match, not a doubled-up employer cost.
What do employers have to pay for payroll beyond taxes?
Beyond payroll taxes themselves, employers typically pay payroll processing fees, workers' compensation insurance premiums, and their own contributions toward benefits such as health insurance, 401(k) matching, or HSA contributions. These are real payroll-related costs, but they're not payroll taxes and aren't remitted to a tax agency.
What payroll taxes must an employer pay for a remote employee in another state?
You register for and pay SUTA in the state where the remote employee actually performs work, withhold and remit that state's income tax, and comply with any other employer-paid tax that state requires, state disability insurance in California, for example. Federal FICA and FUTA obligations don't change based on the employee's state; those apply the same way regardless of where the work happens.
