COVID-19 Payroll Tax Deferral

The Coronavirus, Aid, Relief and Economic Security Act (CARES Act) allows employers to defer the deposit and payment of the employer's share of social security taxes. In Zenefits Payroll, you’ll have the option to opt in to this deferral by taking the following steps. 

  1. Open the Payroll app from your Zenefits dashboard.
  2. Go to the Settings tab, then click Taxes.
  3. Click the pencil icon in the Federal section.
  4. Next to COVID-19 Tax Deferral, select Enabled.
  5. Save.
Once you've enabled the deferral, it’ll be applied to all pay runs moving forward. The total amount to be deferred from a pay run will appear on your payroll approval page for each pay run, and you will be required to acknowledge the amount to be deferred.

If you are also able to claim credits for COVID-19 emergency paid sick/family leave pay earnings processed in Zenefits Payroll, it’s important to note the hierarchy in which the system will apply the deferments vs the credits.  The Zenefits Payroll system will always defer the employer social security taxes before any credits are applied when payroll administrators have both the deferment and credits on a single pay run.

By enabling the deferral, employers are authorizing Zenefits to defer payment of employer social security liabilities for all payrolls processed while this option is enabled.  Employers are responsible for determining their eligibility for the deferral of these taxes and making any payments by the required due date.

Per U.S. Treasury and IRS guidelines, employers are responsible for keeping detailed records of any deferred tax payments, calculations of qualified credit amounts, or any information related to tax payment relief as a result of the new COVID-19 legislation.

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