This paper considers common due-date assignment and scheduling on parallel machines. The main decisions are: (a) deter-mining the common due-date; (b) allocating jobs to machines; and (c) sequencing the jobs assigned to each machine. The objective is to minimize the sum of the penalties associated with common due-date assignment, earliness and tardiness. As an extension of the existing studies on the problem, we consider sequence-dependent setup times that depend on the type of job just completed and on the job to be processed. The sequence-dependent setups, commonly found in various manufacturing systems, make the problem much more complicated. To represent the problem more clearly, a mixed integer programming model is suggested, and due to the complexity of the problem, two heuristics, one with individual sequence-dependent setup times and the other with aggregated sequence-dependent setup times, are suggested after analyzing the characteristics of the problem. Computational experiments were done on a number of test instances and the results are reported.