Unpaid Tax Liabilities

When you change payroll providers, there might be taxes that your business owes but hasn’t paid yet because they aren’t due. You’re still responsible for those taxes, but we’ll help you handle them.

We handle the filing and depositing of your taxes, taking full responsibility for making payments when they’re due. To ensure we have the necessary funds to do that, we initiate a process called the Unpaid Tax Liability Debit.

The Unpaid Tax Liability Debit is a one-time withdrawal that covers any outstanding payroll tax liabilities carried over from a previous payroll provider. These may include:

  • Federal Unemployment Tax (FUTA)

  • State Unemployment Taxes

  • Local Taxes

  • Federal and State Income Taxes (depending on timing and frequency)

Even if you are starting with Pavillio Payroll at the beginning of a new quarter, you may still require a collection for FUTA or similar taxes, especially if your business pays those taxes annually or doesn’t meet the quarterly filing threshold.

We processes the Unpaid Tax Liability Debit approximately 7-10 business days after the first pay date with us. This ensures we’re properly funded before tax deadlines, helping you avoid penalties for late payments.

You will receive a detailed Unpaid Tax Liability letter with a full breakdown of the debit amount before the funds are withdrawn. This will give you time to review the details, validate the amounts, and determine what, if any, adjustments need to be made.

If any of the listed liabilities have already been paid through a previous provider, just let us know and we'll remove them from the total.

To validate the liability amount:

  1. Refer to the final payroll journal or tax liability report from the prior provider.

  2. Compare it line-by-line with the breakdown in the letter received from us.

  3. Look for any overlaps: if a tax has already been paid, notify us right away.

    We’ll adjust your total before the debit is processed.