Payroll Compliance Checklist
for Small Business Owners

Once you've got employees set up correctly (see our new hire reporting and payroll setup checklist if you haven't already), the compliance work doesn't stop — it becomes a recurring calendar of deposits, quarterly filings, and year-end deadlines. Here's every one of them in a single reference, organized by frequency, so you can bookmark this page and check it each quarter.

Federal Deposit Schedule: Monthly or Semiweekly

Federal income tax and FICA (Social Security and Medicare) withheld from paychecks has to be deposited on a schedule the IRS assigns based on your "lookback period" — your total tax liability over a specific prior 12-month window.

• $50,000 or less in the lookback period: you're a monthly depositor. Deposit by the 15th of the following month.
• More than $50,000 in the lookback period: you're a semiweekly depositor. If payday falls Wednesday–Friday, deposit by the following Wednesday. If payday falls Saturday–Tuesday, deposit by the following Friday.
• New employers start as monthly depositors by default.
• If your accumulated liability hits $100,000 or more on any single day, you must deposit by the next business day, regardless of your normal schedule — and you're bumped to semiweekly for the rest of that year and all of the next.

Quarterly: Federal Form 941

Form 941 (Employer's Quarterly Federal Tax Return) reports the income tax, Social Security, and Medicare tax withheld from employee paychecks, plus the employer's matching FICA share. It's due four times a year:

• Q1 (Jan–Mar): due April 30
• Q2 (Apr–Jun): due July 31
• Q3 (Jul–Sep): due October 31
• Q4 (Oct–Dec): due January 31 of the following year

If you've made all your deposits on time and in full, you get a 10-day grace period to file. If a due date falls on a weekend or federal holiday, it shifts to the next business day.

Quarterly: Maryland Unemployment Insurance Contribution Report

Separately from federal filings, Maryland requires every employer to file a Quarterly Contribution Report through the BEACON portal, reporting total gross wages and taxable wages (the first $8,500 paid to each employee per year) and paying the state unemployment insurance tax due. The deadlines match the federal 941 schedule:

• Q1: due April 30
• Q2: due July 31
• Q3: due October 31
• Q4: due January 31

One detail that trips people up: this report is required every quarter, even if you paid no wages that quarter — you simply file a zero report. Late payments trigger penalties and interest, though a waiver can be requested if you have reasonable cause.

Annual: W-2s and 1099-NECs — Due January 31

By January 31 each year, you must:

• Provide W-2 forms to every employee who worked for you during the prior year
• File those W-2s with the Social Security Administration
• Provide Form 1099-NEC to every contractor you paid $600 or more during the year
• File those 1099-NECs with the IRS

If you're filing 10 or more W-2s, e-filing with the SSA is required rather than optional. This is one of the least forgiving deadlines on the calendar — plan to have your books reconciled well before January so you're not scrambling to pull numbers together in the final days of the month.

Recordkeeping: How Long to Keep Payroll Records

Once a filing is done, the paperwork isn't finished — you're required to retain it. As a general rule, keep employment tax records for at least 4 years after the tax becomes due or is paid, whichever is later. That includes:

• Copies of filed 941s, W-2s, and 1099-NECs
• Payroll registers and pay stub records
• Timesheets and hours records
• Records supporting any tax deposits made

I-9 forms have their own, shorter retention rule (3 years after hire, or 1 year after termination, whichever is later) — see our new hire checklist for details.

The Annual Payroll Compliance Calendar

• Every payday: deposit federal withholding per your monthly or semiweekly schedule
• April 30: Q1 Form 941 due · Q1 Maryland UI Contribution Report due
• July 31: Q2 Form 941 due · Q2 Maryland UI Contribution Report due
• October 31: Q3 Form 941 due · Q3 Maryland UI Contribution Report due
• January 31: Q4 Form 941 due · Q4 Maryland UI Contribution Report due · W-2s to employees and SSA · 1099-NECs to contractors and IRS
• Ongoing: retain all employment tax records for a minimum of 4 years

Let Payroll Compliance Run Itself

Every deadline above is manageable on its own. The real risk is losing track of one while you're focused on running your business — a missed 941 deposit or a late UI filing generates penalties and interest that are entirely avoidable with the right system in place.

My Maryland Bookkeeper handles payroll processing, deposits, and quarterly filings for Frederick, MD small businesses so none of these dates ever slip through the cracks.