Cannabis Industry Payroll Tax Reporting

We are here to help business owners in the cannabis industry follow California’s payroll tax laws and avoid unexpected tax liabilities. California businesses that hire employees to perform services are required by law to withhold, report, and pay payroll taxes to us.

Cannabis businesses include distributors, transporters, and dispensaries and includes employees like managers, plant caretakers, budtenders, security guards, salespersons, and delivery persons.

Select from the topics below for more detailed information.

An employee includes:

  • Any officer of a corporation.
  • Any worker who is an employee under the ABC test.
  • Any worker whose services are specifically covered by law.

An employee may perform services on a less than full-time or temporary basis. The law does not exclude services from employment which are commonly referred to as day labor, part-time help, casual labor, temporary help, probationary, or outside labor.

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Wages are all compensation for an employee’s personal services.

Wages include, but are not limited to:

  • Salaries, hourly pay, piece rate, or payments by the job.
  • Commissions and bonuses.
  • Overtime and vacation pay.
  • The reasonable cash value of compensation other than cash.

An employee’s wages are subject to all payroll taxes and reportable as Personal Income Tax (PIT) wages unless otherwise stated.

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If you operate a business and employ one or more employees, you must register as an employer with us when you pay wages of more than $100 in a calendar quarter. An employer must register with us within 15 days of becoming an employer who has met this requirement.

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California businesses that hire employees to perform services are required by law to withhold, report, and pay payroll taxes.

Note: If you are unable to get a checking account, you are still required to pay payroll taxes. Contact your local Employment Tax Office to make arrangements with one of our representatives.

All employers are required to electronically submit employment tax returns, wage reports, and payroll tax deposits to us.

e-Services for Business is your fast, easy, and secure way to manage your employer payroll tax account online 24 hours a day, 7 days a week.

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e-Services for Business

Use e-Services for Business to manage your employer payroll tax account online.

Contact Us

If you have questions, Contact Payroll Taxes. You can also contact the Taxpayer Assistance Center at 1-888-745-3886 or visit your local Employment Tax Office.

Last Revised: 03/07/2022