• IRS Publication 15, Employer’s Tax Guide (also called Circular E), explains an employer’s federal payroll-tax responsibilities: withholding, depositing, reporting, paying and correcting federal employment taxes for employees.
– Publication 15 covers federal income tax withholding, Social Security and Medicare (FICA), and guidance on federal unemployment (FUTA) reporting/deposits; it does not set state or local tax withholding rules.
– Since 2020, the withholding tables and step-by-step withholding methods were moved into Publication 15‑T (Federal Income Tax Withholding Methods); Publication 15 describes employer obligations and where to get the tools.
– Employers should use Pub. 15 together with Form W‑4, Publication 15‑T, Publication 15‑A (supplement) and IRS forms (941/944/940, W‑2, etc.). Use EFTPS to make federal tax deposits and file corrections with forms such as 941‑X and W‑2c.
What is IRS Publication 15?
IRS Publication 15, Employer’s Tax Guide, is the IRS’s primary reference for employers on how to handle federal payroll taxes. It explains:
– Which taxes you must withhold from employees (federal income tax, Social Security, Medicare).
– How and when to deposit withheld taxes (schedules, thresholds, and use of EFTPS).
– Which returns to file (for most employers: Form 941 quarterly or Form 944 annually; Form 940 for FUTA).
– Recordkeeping and reporting obligations, including Forms W‑2 and W‑3 and year‑end requirements.
– How to correct payroll errors and handle special situations (e.g., sick pay, fringe benefits—with additional guidance in Publication 15‑A).
What Publication 15 does and does not cover
Covers:
– Federal income tax withholding rules and employer obligations.
– FICA (Social Security and Medicare) withholding and employer matching.
– Employer deposit rules (how and when to deposit federal payroll taxes).
– Filing requirements (Form 941/944, Form 940, Forms W‑2/W‑3) and basic recordkeeping.
– Correcting payroll tax returns and W‑2s.
Does not cover:
– State and local income tax withholding — consult your state or local tax authority for those rules.
– Detailed withholding computation tables (moved to Publication 15‑T).
– Extensive special‑situation rules (some are detailed in Publication 15‑A or other IRS publications).
Notable update
– Beginning in 2020 the Percentage and Wage Bracket withholding tables and the step‑by‑step withholding computation methods were removed from Publication 15 and moved to Publication 15‑T, Federal Income Tax Withholding Methods. Employers should use Pub. 15‑T or the IRS’s Income Tax Withholding Assistant for Employers to compute federal withholding.
How to use Publication 15 — practical steps for employers
Below is a practical, step‑by‑step guide to set up and maintain compliant payroll processes using Publication 15 and related IRS guidance.
Before you run payroll (setup)
1. Obtain an EIN and register as an employer.
• If you don’t have one, apply for an Employer Identification Number (EIN) from the IRS.
2. Collect employee information.
• Have each employee complete Form W‑4 (Employee’s Withholding Certificate) and verify Social Security numbers.
• If an employee doesn’t submit a W‑4, follow the default withholding rules described in Pub. 15 / 15‑T (typically single with no adjustments).
3. Choose pay frequency and determine payroll schedule.
• Your deposit schedule for federal taxes (semiweekly vs. monthly) depends on total tax liability — Pub. 15 explains these thresholds.
4. Set up payroll accounts and tools.
• Enroll in EFTPS for federal tax deposits: /
• Choose payroll software or a payroll service that supports Form 941/940 filings, W‑2 generation, and deposit scheduling.
Computing withholding for each payroll
5. Determine federal income tax withholding.
• Use the employee’s Form W‑4 and Publication 15‑T (or IRS Withholding Assistant) to compute federal income tax to withhold from each paycheck:
• Include FICA amounts: Social Security and Medicare withholding/matching percentages are covered in Pub. 15.
6. Account for pre‑tax items and other adjustments.
• Apply rules for pretax benefits (e.g., retirement plan deferrals, cafeteria plans) as explained in Pub. 15 and Pub. 15‑A for some fringe‑benefit details.
Depositing taxes
7. Determine deposit schedule and deposit method.
• Based on your tax liability and the IRS guidance in Pub. 15, determine whether you must deposit monthly or semiweekly and the due dates for deposits.
• Make deposits electronically via EFTPS: /
Filing returns and reports
8. File required returns on time.
• Form 941 (Employer’s Quarterly Federal Tax Return) is the common quarterly filing; small employers may file Form 944 annually if eligible. See Pub. 15 for filing criteria and due dates.
• File Form 940 for FUTA (annual) if applicable.
• Provide Forms W‑2 and W‑3 to employees and the SSA by year‑end deadlines.
Recordkeeping and compliance
9. Keep required payroll records.
• Retain records of wages, tax withholding, tax deposits, W‑4s, Forms W‑2/W‑3 and payroll tax returns as specified in Pub. 15.
• Maintain records to support tax treatments of fringe benefits, sick pay, third‑party payments and similar items (Pub. 15‑A covers examples).
Correcting mistakes
10. Correct payroll tax filings and W‑2s promptly.
• To correct an incorrect Form 941, use Form 941‑X (Adjusted Employer’s QUARTERLY Federal Tax Return or Claim for Refund):
• To correct a W‑2, file Form W‑2c to amend the employee’s wage statement:
• Follow Pub. 15 guidance on adjustments, penalties and interest; consult a tax professional for complex corrections.
When to consult other IRS publications or a tax professional
– Publication 15‑T: For the official methods and tables to calculate federal income tax withholding:
– Publication 15‑A: Supplemental guidance on fringe benefits, third‑party sick pay, and other employer issues:
– Form‑specific instructions (941, 944, 940) and the IRS website for up‑to‑date rates, deposit thresholds and filing deadlines.
– If you have complex payroll situations (multi‑state employees, expatriates, complicated fringe benefits, or large payroll corrections), consult a payroll tax advisor or CPA.
Practical employer checklist (quick)
– Get EIN and set up EFTPS.
– Collect W‑4s and verify SSNs.
– Choose payroll frequency and software/service.
– Use Pub. 15 and Pub. 15‑T to set up withholding and FICA amounts.
– Make timely federal tax deposits via EFTPS.
– File Form 941/944 and Form 940 on schedule; provide W‑2s to employees.
– Keep payroll records and respond quickly to audits or notices.
– Correct errors with 941‑X and W‑2c as needed.
Where to access Publication 15 and related resources
– IRS Publication 15 (Employer’s Tax Guide):
– IRS Publication 15‑T (Federal Income Tax Withholding Methods):
– IRS Publication 15‑A (Employer’s Supplemental Tax Guide):
– Form W‑4 information:
– EFTPS (electronic federal tax payments): /
– Forms and instructions (Forms 941, 944, 940, W‑2, etc.)
Additional reading
– Investopedia overview of Publication 15 (background and context)
Final note
Publication 15 is the starting point for federal payroll compliance. Because tax rates, deposit thresholds, and withholding procedures can change annually (or more often for special tax law changes), always use the most current version of Pub. 15, Pub. 15‑T and the IRS website when preparing payroll. If you are unsure about specific or complex payroll tax situations, get professional tax or payroll‑service help.