If you pay wages to people who work in or around your home, you may be considered a household employer. Refer to the table below for a list of workers and whether they are or are not considered household employees. A household employee may perform services on a temporary or less than full-time basis.
|*These Are Household Employees||*These Are Not Household Employees|
*This list is not intended to be a complete list of household employees.
- Reports wages quarterly and pays taxes annually.
- Pays household wages of $20,000 or less annually and elects to be an annual Household Employer.
- Reports wages quarterly and pays taxes quarterly.
- Pays household wages that exceed $20,000 annually or pays household wages of $20,000 or less annually and does not elect to be an annual Household Employer.
A household employer must report when he/she employs one or more individuals to perform work and pays cash wages of $750 or more in a calendar quarter. Cash wages include both checks and cash. Do not include noncash wages, such as meals and lodging, when calculating whether you have reached $750 in cash wages.
Once subject, a household employer must register with the EDD within 15 days after paying $750 in total cash wages. Register online with e-Services for Business.
The following examples will help you decide when you must register with the EDD, begin reporting employee wages and withholdings, and paying payroll taxes:
|Cash Wages||Meals & Lodging||Am I Required to Register?|
|$700||$149||You are not required to register, report employee wages, or withhold/pay any California payroll taxes because the cash wage limit of $750 in a quarter has not been met (the value of meals and lodging is not included in reaching the $750 cash wage limit).|
You must register, report employee wages, and withhold SDI on the entire $825. You are not required to pay UI and ETT because the cash wage limit of $1,000 in a quarter has not been met.
|$900||$150||You must register, report employee wages, and withhold SDI on the entire $1,050. You are not required to pay UI and ETT because the cash wage limit of $1,000 in a quarter has not been met (the value of meals and lodging is not included in reaching the $1,000 cash wage limit).|
|$1,000||$100||You must register, report employee wages, and pay UI and ETT and withhold SDI on the entire $1,100.|
Obtain more information about wages, subject wages, and personal income tax wages from the following:
Use e-Services for Business to register for your employer payroll tax account number. It’s fast, easy, secure, and available 24 hours a day, 7 days a week.
- Create a username and password.
- Go to e-Services for Business.
- Select the “Enroll” link.
- Enter the required information and select “Continue.”
- Select the verification link in the email sent to you by the EDD to complete the enrollment process.
Important: If you do not verify your email address within 24 hours, you will need to restart the enrollment process.
- Select “New Employer.”
- Select the “Click here to register for Employer Payroll Tax Account Number” link.
- Complete the online registration application.
- Select “Submit.”
This process will create an employer payroll tax account number.
If you have already registered online, do not use this alternate method.
Complete the registration form Employers of Household Workers Registration and Update Form (DE 1HW). For annual household employers must also complete the Employer of Household Worker Election Notice (DE 89) if election is made after filing DE 1HW.
Mail or fax your completed registration form to the address or fax number below.
Employment Development Department
Account Services Group, MIC 28
PO Box 826880
Sacramento CA 94280-0001
Note: Registration by mail may take 10-14 days to process.
The amount of wages you pay in a calendar quarter will determine the payroll taxes you are required to withhold and pay.
|If You Pay (in a Quarter)||Then|
|$750 to $999.99*||Withhold State Disability Insurance (SDI).|
|$1,000 or more**||Withhold SDI. In addition, pay Unemployment Insurance (UI) and Employment Training Tax (ETT).|
*If wages fall below $750 in a following quarter, you must continue to withhold SDI from your employees’ wages through the remainder of the current year and through the following calendar year.
**If wages fall below $1,000 in a following quarter, you must continue to withhold SDI from your employees’ wages and pay UI and ETT through the remainder of the current year and through the following calendar year.
Household employers are not required to withhold Personal Income Tax (PIT); however, they are required to report PIT wages for each household employee. If a household employee wishes to have PIT withheld from his or her wages and you agree to withhold it, you need to report and send the PIT withheld to the EDD. The California Withholding Schedules are available online.
As of January 1, 2018, all employers are required to electronically submit employment tax returns, wage reports, and payroll tax deposits to the Employment Development Department. You can use e-Services for Business to comply with the e-file and e-pay mandate. It’s a fast, easy, and secure way to file, pay, and manage your employer payroll tax accounts online. For more information and approved electronic filing and payment methods, visit E-file and E-pay Mandate for Employers.
Quarterly Household Employers
Quarterly household employers will file the Quarterly Contribution Return and Report of Wages (DE 9) and Quarterly Contribution Return and Report of Wages (Continuation)(DE 9C) each quarter and submit payroll tax deposits electronically.
Annual Household Employers
Annual household employers are required to file an Employer of Household Worker(s) Quarterly Report of Wages and Withholding (DE 3BHW) each quarter and an Employer of Household Worker(s) Annual Payroll Tax Return (DE 3HW) annually.
The DE 3BHW is used to report employee quarterly wages subject to Unemployment Insurance (UI), Employment Training Tax (ETT), State Disability Insurance (SDI) taxes, and Personal Income Tax (PIT) wages. If PIT is withheld, that amount is also reported on this form. Even though taxes are paid just once a year, wages must be reported each quarter by state law. For any quarter that you do not have wages, you must still file the report.
The DE 3HW is used by household employers who elect to pay taxes annually. The DE 3HW is used to send UI, ETT, and SDI withheld to the EDD. If Personal Income Tax (PIT) is withheld, that amount is also sent to the EDD with this form. If your total accumulated wages exceed $20,000 during the year, you must notify the EDD immediately that you need to change to a quarterly household employer.
Quarter Reporting Format for Forms and Deposits
Many EDD forms require you to specify the quarter on the report and/or deposit. The date format used on forms for reporting and/or making deposits is the last 2 digits of the year and then one digit representing each quarter. Entering the incorrect format may cause delays, penalties, interest, and/or misapplication of funds.
- 1st quarter of 2018 is entered as 181, which is 18 for 2018 and 1 for the first quarter.
- Subsequent quarters would be 182, 183, and 184.
Electronic forms determine their timeliness by the date they are completed and transmitted; paper forms are determined by their postmark date. When the due date falls on a Saturday, Sunday, or legal holiday, the next business day is considered to be the last timely date.
Penalty and interest will be charged on late reports. For more information, visit the Interest Rate page.
|Report Covering||Filing Due Dates||Delinquent if Not Filed By|
|January, February, March||April 1||April 30, 2018|
|April, May, June||July 1||July 31, 2018|
|July, August, September||October 1||October 31, 2018|
|October, November, December||January 1||January 31, 2019|
If you paid no wages during a quarter, you are still considered an employer and required by law to sign and file the DE 9C and DE 9 for quarterly employers DE 3BHW for annual employers. Check the “No Payroll” box in Item B, sign and mail the report. If you do not expect to pay wages within the next year, complete a Commercial Employer Account Registration and Update Form (DE 1).
|Report Covering||Filing Due Dates||Delinquent if Not Filed By|
|2018||January 1, 2019||January 31, 2019|
For additional information:
Household Employers can obtain more information on reporting requirements from the following:
- E-file and E-pay Mandate for Employers
- Information Sheet – Household Employment (DE 231L)
- Household Employer’s Guide (DE 8829)
Additional information is also available through our no-fee payroll tax seminars, or by calling the Taxpayer Assistance Center at 1-888-745-3886.