What is an Employer payroll tax deferral?
Employer payroll tax deferral is a federal relief program that allows eligible businesses to temporarily postpone payment of the employer portion of Social Security taxes (6.2% of employee wages) while maintaining standard withholding and deposit schedules for employee tax portions. These programs provide immediate cash flow relief during economic disruptions without eliminating underlying tax obligations, and require structured repayment schedules that typically begin 12 to 24 months after the end of the deferral period. Qualifying businesses must meet specific size and industry criteria while maintaining detailed documentation of deferred amounts and compliance with reporting requirements. S Corporations and C Corporations can leverage deferral programs to manage working capital needs while preserving business operations during challenging periods.
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