California State Payroll Taxes

California state payroll taxes are an important aspect that employers need to be well informed about. These taxes are levied on both employers and employees and play a crucial role in funding various state programs and services. Stubsondemand.com covers all the information required for California state withholding taxes and provides you with the exact details to keep payroll under your control.

In addition to the federal withholding, employers in California are also accountable for the following state payroll tax requirements:

California State New Hire Reporting

20 days after hiring a new or rehired employee, employers must submit a new hire report to the state agency.

In California, employers have the option of reporting new hires electronically or on paper. To report new hires to the state agency, the California Employment Development Department requires Form DE 34.

Both employees and contractors must submit new-hire reporting to the California state agency.

Filing the New Hire Report DE 34 Form Online

Report on new hires (DE 34) Using the California state e-services for business, forms can be submitted online.

Mail the completed Form DE 34 to the following address:

EMPLOYMENT DEVELOPMENT DEPARTMENT
PO Box 997016, MIC 96
West Sacramento, CA, 95799-7016

If an independent contractor was employed by the employer, new hire reporting must be completed by submitting a DE 542 to the EDD.

California’s State Minimum Wage Requirements

Employers in California have to meet the minimum wage requirements as required by California state labor law, apart from the federal requirement.

The minimum wage requirement for California is $14.00 per hour for 2022.

In a few cities and counties in California, the minimum wage is higher than the federally mandated amount.

California pay stub requirements

California state law mandates every employer to provide an accurate itemized wage statement, i.e., a pay stub, to employees when paying wages.

Here are the pay stub requirements for California (CA):

Gross wages earned
Hours worked in total (not required for salaried, exempt employees)
If the employee is paid on a piece-rate basis, the number of piece-rate units earned and any applicable piece rates
Every deduction (all deductions made on written orders of the employee may be aggregated and shown as one item)
Net wages earned.
The period for which the employee is paid, including all dates,
His or her employee identification number, which is not a social security number, or the last four digits of their social security number
the name and location of the business that represents the employer.
The employee’s hours worked at each hourly rate during the pay period, as well as all applicable hourly rates that were in effect at that time.

Employers must also show available sick leave on the employee’s pay stub. If an employer provides unlimited paid sick leave or unlimited paid time off, the employer may indicate “unlimited” on the pay stub.

California’s State Withholding Tax

In addition to the federal Form W-4, the employer should obtain the Form DE 4 (Employee’s Withholding Tax Exemption Certificate) from their employees in order to determine the taxable income of their staff.
The California State Tax Rate for Supplemental Wages is 6.6%.

California’s State Unemployment Insurance Tax (SUI)

The California SUTA wage base limit for 2022 is $7,000 per employee.
The California SUTA Minimum Tax Rate for 2022 is 0.31 percent. The maximum tax rate for 2022 is 6.31 percent.

California’s State Employment Training Program (ETP)

ETT Rate: In 2022, the ETT rate will be 0.1 percent. The annual cap on ETT taxable wages is $7,000 for each employee.
The 2022 ETT rate is 0.1 percent (.001) on the first $7,000 of each employee’s wages. The 2022 SDI withholding rate is 1.1 percent (.011). The rate includes Paid Family Leave (PFL) and Disability Insurance (DI).

California’s State Disability Insurance Tax (SDI)

California SDI wage base limit for 2022 is $122,909. 1.0%

Other California State Payroll Requirements

California Termination Pay: If an employee is fired, pay immediately. If the employee quits, pay within 72 hours.
Remit withholding for child support to

California State Disbursement Unit (SDU)

PO Box 419064, Rancho Cordova, CA 95741

When are California’s State Payroll Tax Payments Due?

The tax deposits that have an employer contribution, such as State Unemployment Insurance (SUI) and the Employment Training Tax (ETT), are basically due for each quarter.

If the withheld amount exceeds $350, employers must deposit employee withholdings of personal income tax (PIT) and state disability insurance (SDI) as per the federal tax deposit schedule.

All California payroll taxes must be deposited electronically with the Employment Development Department (EDD). Depending on the federal deposit schedule and state withholding percentage, different state income tax deposits have different due dates. Please see below:

For Semi-Weekly Federal Depositors

If the state income tax withholding is less than $350, then the taxes are due quarterly (on the last day of the month following the end of the quarter).
Taxes are due monthly if $350 to $500 of state income tax is withheld on the 15th day of the following month.
Taxes are due if the state withholds more than $500 from your paycheck for state income tax.

Wednesday
(if the payday was Wednesday, Thursday, or Friday)

Friday
(if the payday was Saturday, Sunday, Monday, or Tuesday)

For Monthly, Quarterly, or Annual Federal Depositors

If the state income tax withholding is less than $350, the taxes are due quarterly.
If the state income tax withholding is more than $350, the taxes are due monthly.

For Next-Day Federal Depositors

If the state income tax withholding is less than $350, then the taxes are due quarterly (on the last day of the month following the end of the quarter).
Taxes are due monthly if $350 to $500 of state income tax is withheld on the 15th day of the following month.
Taxes are due by the next business day if the state income tax withholding is greater than $500 (next working day).

Quarterly California Payroll Tax Filings

Each quarter, employers must submit DE 9 and DE 9C forms.

DE 9 is used to compare each quarter’s reported wages and tax payments.
The DE 9C reports the quarterly salaries for each employee.

Employers can electronically submit DE 9 and DE 9C forms for faster processing. In the case of paper filing, mail the forms to the following address:

State of California Employment Development Department
PO Box 989071
West Sacramento, CA 95798-9071

Due Date for California Forms DE 9 and DE 9C

Employers are required to file DE 9 and DE 9C each quarter.

For Quarter 1, the forms are due by April 30.
For Quarter 2, the forms are due by July 31.
For Quarter 3, the forms are due by November 2.
For Quarter 4, the forms are due by January 31.

The forms must be submitted by the end of the next business day if the due date falls on a weekend or a legal holiday.

Annual California payroll tax filings

The annual filing of Form W-2 with the state is not necessary in California. However, Form 1099-MISC reporting to the state is necessary.

Employers have two options for submitting Form 1099-MISC: electronically or by mailing the document to the following address:

Franchise Tax Board,
PO Box 942840, Sacramento,
CA 94240-6090.

Conclusion

It is important for employers in California to be aware of the specific requirements for annual payroll tax filings. While Form W-2 does not need to be filed with the state, employers must submit Form 1099-MISC. This form can be submitted electronically or by mail to the Franchise Tax Board in Sacramento. By following these guidelines, employers can ensure compliance with California payroll tax regulations.