What is EFTPS?

The Electronic Federal Tax Payment System, EFTPS, is operated by the U.S. Department of the Treasury. Businesses use it to make federal tax deposits and payments, including payroll taxes, corporate income tax and estimated taxes. The IRS describes it on its EFTPS page.

Why it matters

Federal employment tax deposits generally must be made by electronic funds transfer. EFTPS is the most common way to do it, along with payments initiated by a payroll provider or through a bank's same-day wire.

Enrollment

Businesses enroll online with their EIN and bank details. A PIN is mailed to the business address on file with the IRS, so enrollment should be completed well before the first deposit is due. Many businesses are pre-enrolled when they obtain an EIN.

Timing

EFTPS payments must generally be scheduled by 8 p.m. Eastern time at least one calendar day before the due date to be on time. Missing that cutoff can mean a late deposit and a penalty; see payroll tax deposits basics.

Good practice

• Record the EFTPS confirmation number for every payment
• Pay each tax type and period separately, with the correct form and period selected
• Reconcile EFTPS history to your payroll liability accounts monthly

Payroll providers

If a payroll provider makes deposits for you, you can still use EFTPS to confirm that payments were made under your EIN, which is a useful control. See our payroll services and lookback period.

Related terms

• Lookback Period: The lookback period is the 12-month window the IRS uses to decide whether an employer deposits payroll taxes monthly or semiweekly.

Browse more definitions in the small business glossary.