Failure-to-Deposit Penalty Calculator
Last updated · Reviewed for accuracy against IRS.gov guidance
The IRS failure-to-deposit penalty on late payroll tax deposits is 2%, 5% or 10% of the late amount depending on whether it's 1–5, 6–15 or more than 15 days late, rising to 15% if still unpaid 10 days after an IRS notice. Enter a deposit amount and days late to estimate the charge.
Educational estimate. Your IRS notice and account transcript show the actual penalty assessed.
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Get a free reviewHow the tiers work
The penalty is a one-time percentage of the amount deposited late — it doesn't grow monthly like the failure-to-pay penalty. The tier is set by how many calendar days after the due date the deposit lands. Once the IRS sends a notice and the tax stays unpaid more than 10 days, the rate jumps to 15%. See the IRS failure-to-deposit penalty page and Publication 15 for deposit schedules.
Why one missed deposit becomes several penalties
A missed deposit usually also means a Form 941 filed without full payment, which adds the failure-to-pay penalty of 0.5% a month, and if the return is late, a failure-to-file penalty of 5% a month. Repeated misses — pyramiding — draw a revenue officer. Use the free business tax relief assessment if you're behind on more than one period.
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Start the calculatorFrequently asked questions
What is the IRS failure-to-deposit penalty?
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A penalty under IRC section 6656 for employment tax deposits that are late, short or made the wrong way. It's 2% for deposits 1–5 days late, 5% for 6–15 days, 10% for more than 15 days, and 15% if the tax is still unpaid more than 10 days after the first IRS notice or the day you receive a demand for immediate payment.
Does the penalty apply if I paid with my Form 941 instead of depositing?
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Generally yes — paying with the return instead of depositing on time is treated as a deposit failure, unless your quarterly liability was small enough to qualify for paying with the return under Publication 15. Deposits not made through EFTPS or another approved electronic method can also be penalized at 10%.
Can the failure-to-deposit penalty be removed?
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Often. First Time Abate applies to one period for employers with a clean recent history, and reasonable cause relief covers events outside your control. You can also ask the IRS to apply deposits to the most recent liability in the period, which can reduce the penalty.
Is interest charged on top?
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Yes. Interest at the IRS underpayment rate (7% now) runs on the unpaid tax and on the penalty until paid.
Does this penalty count toward the Trust Fund Recovery Penalty?
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No. The TFRP equals the unpaid trust fund taxes only — not penalties or interest.
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TaxSettlementCalculator.com is not a tax firm, law firm, CPA, or government agency and is not affiliated with the IRS or any state tax agency. Estimates are for educational purposes only and are not tax, legal, or financial advice. Results vary based on individual circumstances, and no outcome is guaranteed. We connect users with independent tax relief professionals.