What are overdue payroll tax penalties?

Employers who do not meet their tax commitments may be subject to fines in the form of payroll tax penalties, which are more accurately known as employment tax penalties. These fines are collected by government agencies.

Which types of payroll taxes do you need to make payments for?

Employers are obligated to deduct and pay any and all employment taxes that are relevant to their particular company. Taxes on income, unemployment insurance, and contributions to the Federal Insurance Contribution Act (FICA) are examples of the types of taxes that could fall under this category.

Consequences for failing to pay payroll taxes

Companies that contravene employment tax laws could be subject to the following penalties:

  • Financial repercussions
  • Amounts owed as interest on back taxes
  • Liens against property
  • Sanctions of both a civil and criminal nature
  • Jail sentences

How much of a financial hit would an employment tax penalty deliver?

The amount that must be paid in employment tax penalties often is determined by a number of aspects, including the nature of the violation, the magnitude of the debt, the size of the company, and whether or not payment was made late or was never received. Learn more with and plan a better course of action.

Exemptions from the penalties

Businesses who have been issued a TFRP notice have the opportunity to contest the penalties by demonstrating that there was a valid excuse for the failure to declare taxes or make payments on time. The following are examples of common explanations:

  • Blazes and other natural calamities
  • A lack of access to the relevant records
  • Loss of life and serious illnesses
  • Absence of the taxpayer or a member of their immediate family that cannot be avoided.

Employers are required to give proof, which may take the form of a letter from a physician, a record from a hospital or court, or tangible evidence of a calamity.

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