How to Run Payroll Yourself in 2026, Step by Step

Running payroll yourself in 2026 means you withhold Social Security at 6.2% and Medicare at 1.45%, pay the same two rates again as the employer, and deposit both shares by electronic transfer. On a $4,000 paycheck the employer share is $306 before federal unemployment tax. A payroll company can file the forms, and a missed deposit is still yours.

The worked example is one biweekly paycheck with no tips, no pre-tax deductions, and wages under the Social Security wage base. Federal income tax stays out of the dollar totals, because it comes from each employee's 2026 Form W-4 and Publication 15-T, not from a flat rate. State income tax and state unemployment are real bills, and they are not one national number, so the federal totals here are the floor.

Toolradar data: As of 17 October 2026, the payroll category on Toolradar contains 74 tools. 16% are free, freemium, or open source. The median cheapest paid plan is $22/mo, measured across the 22 tools with a public price. Most of those products will calculate a paycheck. Fewer of them change who owes the deposit.

What running it yourself still includes

Payroll here means paying W-2 employees: gross wages, employee withholdings, the employer taxes, an electronic deposit, and the returns. Paying yourself as an owner, or paying a contractor, is a different form.

Publication 15 (2026) is the federal rulebook, and it is blunt about outsourcing. You remain responsible for the returns and the deposits if a payroll service fails to make them. A certified professional employer organization is the exception, and only for wages that organization pays under its contract. A normal payroll login is not that exception, so the debt stays on your EIN. The PEO fee, if that is the path you want instead, is in how much a PEO costs and best PEO services.

Set the account up before anyone is paid

Get an employer identification number if you must report employment taxes or give tax statements to employees. It is nine digits, and you apply online at the IRS EIN page, or fax or mail Form SS-4. Do not use a Social Security number in its place, or the deposit sits on a person.

Publication 15 requires you to confirm each new employee may work in the United States, which includes Form I-9, and E-Verify is optional on that form, so hold the first paycheck until the form is done. The federal check has no per-case price, and what software charges around it is covered in is E-Verify free. Ask for the 2026 Form W-4, and record the name and Social Security number from the card when the employee has one.

All 50 states, and most territories, have a new-hire registry, and you report each new employee to the designated agency. That report does not enroll you for state income-tax withholding or state unemployment, so open those separate state accounts before the first wage. State unemployment is also what makes the federal unemployment credit, below, available.

Every federal tax deposit has to be an electronic funds transfer. Publication 15 names three routes the government does not charge for: EFTPS, IRS Direct Pay, and an IRS business tax account. A bank or a payroll service can send the transfer, and that party may charge a fee. A credit or debit card can pay a balance due on a return, and it cannot make the deposit, so a card payment on the due date still leaves the deposit undone.

A payroll period is the span you usually pay, and you withhold income tax for that period even if the person missed some days. Weekly, biweekly, semimonthly, and monthly all work, and paying people every two weeks does not, by itself, make you a semiweekly depositor, because the deposit schedule comes from your lookback, not from payday.

Run the paycheck in this order

Start from gross wages, take employee taxes out of the check, set the employer taxes aside on top of gross, and then pay the net. The employer share is not a deduction from the paycheck, so net pay alone will not fund the deposit.

Line	2026 rule	Who pays
Social Security	6.2% until wages hit the wage base	Employee, withheld, and employer again
Medicare	1.45%, no wage cap	Employee, withheld, and employer again
Additional Medicare	0.9% after wages pass $200,000 in the year	Employee only
Federal income tax	2026 Form W-4 and Publication 15-T	Employee, withheld
Federal unemployment	6.0% of the first $7,000, usually credited down	Employer only

The 2026 Social Security wage base is $184,500, and both the employee share and the employer match stop once wages for the year reach it, or you over-withhold that employee. Medicare keeps going past that base, and Additional Medicare Tax starts in the pay period where wages cross $200,000, and you withhold it through year-end, with no employer match on that 0.9%.

A bonus is supplemental wages, withheld at a flat 22%, or 37% after supplemental wages to that employee pass $1 million in the year. Overtime, including the premium half of time-and-a-half, is still subject to both shares of Social Security and Medicare. Publication 15 points employers to an updated Form W-4 if the employee wants the income-tax deduction for qualified overtime reflected in withholding. Tips of $20 or more in a month are generally subject to both shares as well.

What one $4,000 paycheck costs the employer

The table is our arithmetic on the Publication 15 rates, not a filled-in Form 941. One employee, this gross, under the wage base, and the full 5.4% federal unemployment credit: state unemployment paid in full, on time, on the same wages, and the state is not a credit reduction state.

Tax	Rate	On this paycheck
Employee Social Security, withheld	6.2%	$248
Employee Medicare, withheld	1.45%	$58
Employer Social Security	same rate, paid again	$248
Employer Medicare	same rate, paid again	$58
FICA deposit, both shares		$612
Federal unemployment, after the full credit	0.6%	$24

Employee FICA withholding is $306, so the check is $3,694 before federal income tax and any other deduction. The company sends that withholding in and matches it with its own share, so budget the match on top of the net check. Federal income tax from Publication 15-T goes on the same deposit, on top of the FICA total in the table. This page cannot print that income-tax amount without the W-4.

Four employees at the same gross produce a FICA deposit of $2,448 for the payday, before income tax. The employer cash on top of gross for those four people is $1,224, plus federal unemployment. In a quarter with six biweekly paydays, one employee already generates $3,672 of FICA before income tax. That is over the $2,500 line in the next section, so this employer deposits during the quarter instead of paying the whole bill with Form 941.

When the money has to reach the IRS

Social Security, Medicare, and withheld income tax follow a monthly schedule or a semiweekly schedule. For a 2026 Form 941 filer, the lookback runs from 1 July 2024 through 30 June 2025. Tax of $50,000 or less on Form 941, line 12, for that period makes you a monthly depositor, and more than $50,000 makes you a semiweekly depositor. A new employer is a monthly depositor for the first calendar year, because earlier quarters count as zero.

A monthly depositor sends the month's taxes by the 15th of the next month. A semiweekly depositor uses the payday: Wednesday, Thursday, or Friday wages are due the following Wednesday, and Saturday through Tuesday wages are due the following Friday. Split the deposit if one of those paydays falls in a new quarter.

If you accumulate $100,000 of employment tax on any day in a deposit period, that amount is due the next business day, whether you were monthly or semiweekly. You then stay on the semiweekly schedule for the rest of that year and all of the next year, and the threshold is measured before nonrefundable credits.

A due date that falls on a Saturday, Sunday, or legal holiday in the District of Columbia moves to the next business day, and a state holiday does not move a federal deposit. Publication 15's printed dates are not already shifted for weekends, and Publication 509 is the calendar that shows the shifted dates.

You may pay the quarter's tax with Form 941, rather than deposit during the quarter, when line 12 for the current quarter or the prior quarter is under $2,500 and you did not hit the next-day rule. The biweekly example above does not stay under that line. If you might go over, and the prior quarter was not under the line, deposit on your schedule.

Form 941 is due on 30 April, 31 July, 31 October, and 31 January. Deposit on time and you may file 10 days later, on 10 May, 10 August, 10 November, or 10 February. File a return even for a quarter with no wages, unless you have filed a final return or you are a seasonal employer who marked the form that way. Form 944, the annual employment tax return, is allowed only after written notice from the IRS. If you expect the year's employment taxes to be $1,000 or less, ask in the first quarter, then wait for the notice.

Federal unemployment is a second clock

You do not withhold federal unemployment tax. For 2026 the rate is 6.0% of the first $7,000 paid to each employee. A credit of up to 5.4% for state unemployment leaves 0.6% when the state tax was paid in full, on time, and on the same wages, and the state is not a credit reduction state. Publication 15 sends you to the Form 940 instructions for that state list. Wages excluded from state unemployment can be taxed at the full 6.0%.

At 0.6%, one employee who earns at least $7,000 costs $42 for the year, eleven employees cost $462, and twelve cost $504. Deposit the tax by the last day of the month after the quarter if the undeposited amount, including any carryover, is over $500, and carry a balance of $500 or less forward. On these figures the 11-person company never crosses that line and pays the year with Form 940. Twelve people push the annual total over it, so the quarter in which the undeposited balance crosses $500 needs a deposit. The paycheck in the table owes $24 of this tax, and later paychecks stop once that employee has been paid the federal wage base.

Publication 15 lists Form 940 with the 31 January filings, or 10 February if every FUTA deposit was on time. The same weekend and District of Columbia holiday rule applies.

File wage statements on the date the instructions name

The 2026 General Instructions for Forms W-2 and W-3 set the due date for 2026 Forms W-2 and W-3, filed with the Social Security Administration, at 1 February 2027, on paper or electronically, and employee copies are due the same day. If you close the business, those W-2s are due on the due date of your final Form 941 or Form 944, not the following February. An extension to file with the SSA is Form 8809, requested before the due date, and the instructions say it is granted only in limited cases.

For payments made in 2026, Publication 15 says to file Form 1099-NEC for $2,000 or more paid to someone who is not treated as an employee, for services in your trade or business, and contractors are not on the W-2. The 2025 figure on that page was $600. Misclassifying an employee as a contractor is how a missing W-2 becomes employment tax you never withheld.

What payroll software removes, and what it does not

Buy software when you do not want to be the person who remembers the 15th, and the plan has to say that it files. A calculation-only plan leaves the deposit with you, and Publication 15 still leaves a missed deposit with you either way. Prices were read on each vendor's pricing page on 17 October 2026. The four-person column is our arithmetic: published base plus the per-person fee times four. Promotions are excluded.

Plan	Filings listed on the plan	Base	Per person	4 people paid
Patriot Basic Payroll	Tax filing is not listed	$17/mo	$4	$33/mo
Patriot Full Service Payroll	Federal, state, and local filings and deposits	$37/mo	$5	$57/mo
Square Payroll, full service	Federal and state payments and filings	$35/mo	$6	$59/mo
Gusto Simple	Federal, state, and local forms, one state	$49/mo	$6	$73/mo
OnPay Payroll Essentials	Federal, state, and local taxes, all 50 states	$49/mo	$6	$73/mo
Gusto Plus	Multi-state payroll is on this plan card	$80/mo	$12	$128/mo

Patriot Basic lists direct deposit, unlimited payrolls, and contractor pay, which suits an employer who will still prepare the returns. Federal and state filing show up on Full Service, along with year-end forms at no extra fee and $12/mo for each state after the first. The page also offers 30 days free and 50% off for three months, and the table uses the regular rates printed under that offer (Patriot on Toolradar).

Square's full-service plan includes unlimited pay runs and multi-state payroll. Contractor-only payroll on the same page drops the base and bills the per-person fee alone, which fits contractors and leaves a W-2 employer on the full-service row. Paper W-2s or 1099s, if you opt in, are $3 per form mailed (Square on Toolradar).

Gusto Simple is one state, with unlimited payroll runs, month-to-month billing, and no long-term contract. Its pricing FAQ says it files Form W-2, Form 1099, Form 940, and Form 941, plus state and local forms. United States contractors are billed at the per-person rate only in months you pay them. A second state is Plus, at the higher row in the table. Next-day pay is an add-on on Simple and is included in Plus and Premium. See the Gusto review, Gusto pricing, Gusto on Toolradar, and Gusto vs ADP if ADP is the other name on the list.

OnPay Payroll Essentials matches Gusto Simple's base and per-person shape, and the card includes all 50 states at no added state fee, plus unlimited pay runs, Forms 941 and 943, and year-end W-2s and 1099s. The page offers the first month free, and the table uses the ongoing rate. There is no cheaper plan beside Essentials that leaves filing to you, so it is a weak fit when you only wanted the math done (OnPay on Toolradar).

At four people, Square sits $2/mo above Patriot Full Service. Gusto Simple and OnPay land on one monthly total and split on the second state. For a 10-person bill on a different set of plans, use how much payroll costs for a small business. Wider lists: best payroll software and best free payroll software.

What a late deposit costs

Publication 15 gives these failure-to-deposit rates for Form 941, and the same rates for Forms 943, 944, and 945, counted in calendar days from the due date.

• A deposit 1 to 5 days late costs 2% of the tax.
• A deposit 6 to 15 days late costs 5% of the tax.
• A deposit 16 or more days late, but still before 10 days after the first IRS notice, costs 10%, and the same rate applies if you paid the IRS directly, or with the return, when a deposit was required.
• Tax still unpaid more than 10 days after that notice, or after a notice and demand for immediate payment, whichever is earlier, costs 15%.

The rates do not apply when you qualified to pay with the return. A shortfall can also avoid the penalty when it is no more than the greater of $100 or 2% of the amount due, and you pay it by the makeup date, which is a tolerance for a small miss. Keep employment tax records at least four years, including the EIN, wage amounts and dates, and each employee's name, address, Social Security number, and dates of employment.

When to stop doing this yourself

A full-service plan and the monthly schedule are enough while you have one state and someone who will notice a failed transfer. Leave the do-it-yourself setup when a second state appears, or when one payday accumulates $100,000 of tax and the next-day rule takes over. Gusto Simple does not include the second state, Patriot Full Service bills an extra monthly fee per additional state, and OnPay's Essentials card does not.

Quote-only payroll and a PEO are a different purchase. Read ADP pricing, the Paychex review, and Rippling pricing for those products. If payroll sits inside a larger people system, how much an HRIS costs and the best HRIS for a small business cover the rest. Workers' compensation is a state program outside Publication 15, so it is not priced here.

Frequently asked questions

How do you run payroll yourself in 2026?

Get an EIN, complete Form I-9 and the 2026 Form W-4, report the hire to the state, withhold Social Security at 6.2% and Medicare at 1.45%, match both as the employer, and deposit the total electronically on the monthly or semiweekly schedule. File Form 941 each quarter and Form 940 for the year. Publication 15 (2026) is the federal guide, and a payroll service does not remove the liability if it misses a deposit.

How much employer tax is due on a $4,000 paycheck?

Employer Social Security is $248 and employer Medicare is $58, so the employer share of FICA is $306. With the full state-unemployment credit, federal unemployment on that paycheck is $24, and it stops once the employee has been paid the $7,000 wage base. The combined FICA deposit, both shares, is $612 before federal income tax, which depends on the W-4.

When are payroll tax deposits due?

A new employer, and any monthly depositor, deposits by the 15th of the following month. A semiweekly depositor deposits Wednesday-through-Friday paydays on the following Wednesday, and Saturday-through-Tuesday paydays on the following Friday. Tax of $100,000 accumulated on one day is due the next business day. Federal unemployment tax is deposited after the quarter only when the undeposited amount is over $500.

Can you pay payroll taxes with the quarterly return?

Yes, when Form 941 line 12 for the current quarter or the prior quarter is under $2,500 and you did not hit the next-day rule. One person on the paycheck in this guide, paid every two weeks, does not stay under that line: six paydays produce $3,672 of FICA before income tax withholding. If you might cross the line, deposit on your schedule.

Does payroll software file the taxes for you?

Only when the plan says it files, and Patriot Basic does not list tax filing. Patriot Full Service, Square's full-service plan, Gusto Simple, and OnPay Payroll Essentials do. At four people paid, those filing plans are $57/mo, $59/mo, and $73/mo on the regular rates read on 17 October 2026. You remain the employer on a missed deposit unless a certified PEO is paying the wages under its contract.

When are 2026 Forms W-2 due?

File Forms W-2 and W-3 with the Social Security Administration by 1 February 2027, and give employees their copies by the same date, which is the date in the 2026 W-2 instructions. Someone who is not your employee, and who you paid $2,000 or more in 2026 for services, is reported on Form 1099-NEC instead.

How we checked this

Rates, deposit rules, form dates, and the outsourcing warning are from Publication 15 (2026), read on 17 October 2026. The Social Security and Medicare rates are restated in Publication 15-A (2026). The W-2 date is from the 2026 General Instructions for Forms W-2 and W-3. Software prices are from Patriot, Square Payroll's US pricing page, Gusto, and OnPay. The tool count is from Toolradar's payroll ranking, linked above. Paycheck totals and the four-person column are our multiplication of those published rates and fees.

Cite this: HRpresso, "How to Run Payroll Yourself in 2026, Step by Step", October 2026.

More payroll and people-ops guides are at hrpresso.com.

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