Circular E

Circular E was the informal name for the Employer’s Tax Guide, officially known as IRS Publication 15. It provided employers with essential federal payroll tax information, including how to withhold, deposit, report, and pay employment taxes like federal income tax, Social Security, and Medicare. Although commonly referred to as "Circular E" in the past, the IRS has phased out the term, and it is now formally recognized only as Publication 15.

This document is updated annually by the IRS and remains a critical tool for businesses to comply with U.S. payroll tax obligations.

Key Facts

• Formerly Known As Circular E: The name "Circular E" was dropped in favor of “Publication 15”, though many still use the old term informally.
• Published by the IRS: It is one of the IRS’s core publications used by employers across the U.S. to ensure compliance with payroll tax laws.
• Key Contents of Publication 15:
  
  • Federal income tax withholding tables
  • Social Security and Medicare tax rates
  • Employer filing requirements (Forms W-2, W-3, 941, 944)
  • Rules for supplemental wages, fringe benefits, and sick pay
  • Deposit schedules and penalty avoidance
  • Guidance on new hire reporting
• Updated Annually: Reflects changes in tax rates, thresholds, wage bases, and filing deadlines each year.
• Applies to All Employers: Especially useful for small to midsize businesses, accountants, and payroll providers to handle withholding and reporting duties correctly.
• Prevents Tax Penalties: Following the guide helps employers avoid costly fines, stay compliant, and manage audits or inquiries from the IRS.

1. What is Circular E?

Circular E was the old name for IRS Publication 15, the federal guide that instructs employers how to properly withhold and report payroll taxes.

2. Do I still need to use Circular E today?

Yes -though it's now called Publication 15, it still serves the same function. Employers must consult it to stay compliant with the latest federal payroll tax rules.

3. Where can I find Publication 15?

You can download the most recent version of Publication 15 (Employer’s Tax Guide) directly from the IRS website.

4. What taxes does Publication 15 cover?

It covers how to withhold and deposit federal income tax, Social Security tax, and Medicare tax. It also explains employer obligations for FUTA (unemployment tax) and wage reporting.

5. Is there a separate version for agricultural or household employers?

Yes. The IRS issues additional publications for niche employers:

• Publication 51 for agricultural employers
• Publication 926 for household employers