E-Commerce & DTC Brands: Managing Payroll During Peak Season (2026)

What the data says about e-commerce company seasonality

Five retail trade industries that hire for holiday demand added 492,000 jobs during October, November and December 2024 and shed 463,000 in the following January and February, a net retention of 29,000. Between 2018 and 2021 the average holiday buildup was 605,000 jobs.

Payroll mechanics of a spike

Non-exempt employees must receive overtime at not less than time and one-half the regular rate for hours worked over 40 in a workweek, and hours cannot be averaged across weeks. When an employee works at two or more different straight-time rates in one week, the regular rate is the weighted average of those rates.

Every seasonal hire is a full onboarding: W-4, I-9 within three business days, new hire report inside the state deadline, and a pay code from day one. A wave of hires also moves the employer across headcount lines if it persists: the ACA and COBRA tests look at the prior year's average, so a seasonal peak can raise next year's count. Deposits scale with liability; a payroll that reaches $100,000 in accumulated liability on any day owes a next-business-day deposit and moves to the semiweekly schedule.

Seasonal employers do not have to file Form 941 for quarters in which they paid no wages and have no tax liability. To use this treatment the employer must check the box on line 18 on every Form 941 it files.