All businesses are classified as monthly, semiweekly or quarterly depositors. This determines when they must pay their payroll taxes. Most businesses will either be monthly or semiweekly. Very few businesses will be classified as quarterly because the employer would have to owe less than $2,500 in taxes for the quarter in order to be quarterly depositors. To decide how a business will be classified, the IRS uses a rule called the look-back period rule. They will look back at a one year period from the previous year. This period will fall between July 1 and June 30th of the previous year. So if you are in 2014, they would look back at June 30, 2012 to July 1, 2013. Then, if during that period, the employer paid less than $50,000 in payroll
