I missed a payroll tax deposit. What kind of penalties am I facing?

As a business owner with employees in Oklahoma City, you are likely required to make payroll tax deposits. The frequency of these deposits is based upon the amount of income tax that is withheld and the social security liability for a 12-month “look back” period for each calendar year that ends on or before June 30th. Deposits are made quarterly with the quarterly employment tax returns, monthly on the 15th of the following month, semi-weekly on either Wednesday or Friday, or the next day. When these deposits are missed or paid late, penalties accrue.

Penalties Are Significant

The penalty that is owed for a missed payroll tax deposit varies based upon how late the deposit is. Generally, penalties are applied as follows:

  1. The penalty amount is 2 percent if the deposit is between 1 and 5 days late.
  2. The penalty amount is 5 percent if the deposit is between 6 and 15 days late.
  3. The penalty amount is 10 percent if the deposit is more than 15 days late.
  4. The penalty amount is 15 percent if the overdue deposit is not paid within 10 days of notice and demand by the IRS.


If you wish to ask for abatement of the penalties that accrued as a result of missed payroll tax deposits, you must demonstrate that there was reasonable cause for the delay as well as a lack of willful neglect. Attempting to obtain abatement can be a complicated process for those who are not familiar with working with the IRS. Fortunately, the Law Offices of Travis W. Watkins can help. We encourage you to view our free guide, The Ultimate Survival Guide for IRS Problems and contact us for a tax consultation.

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