Cannabis Industry Payroll Tax Reporting

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.

For More Information

• Employment Status
• California Employer's Guide (DE 44) (PDF)
• Information Sheet: Employment (DE 231) (PDF)
• Information Sheet: Statutory Employees (DE 231SE) (PDF)
• Information Sheet: Casual Labor (DE 231K) (PDF)
• California Unemployment Insurance Code – section 621(b)
• Labor Code – section 2775

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.

For More Information

• What Are Wages?
• Information Sheet: Wages (DE 231A) (PDF)
• Information Sheet: Types of Payments (DE 231TP) (PDF)
• California Employer’s Guide (DE 44 )(PDF)

If you operate a business and employ one or more employees, you must register as an employer and set up an EDD payroll tax account within 15 days of paying wages of more than $100 in a calendar quarter. The registration will allow you to report and pay the required payroll taxes.

For More Information

• Am I Required to Register as An Employer?
• e-Services for Business

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

• Reporting Requirements
• Required Filings and Due Dates
• Calendar – Payroll Tax Due Dates
• New Employee Registry Reporting
• Independent Contractor Reporting

Note: If your cannabis business is unable to open a checking account, you are still required to pay payroll taxes. Contact your local Employment Tax Office to make payment arrangements with one of our representatives to make your Payroll Tax Deposit (DE 88) payments.

• E-file and E-pay Mandate for Employers
• FAQs – E-file and E-pay Mandate
• E-File and E-Pay Mandate Waiver Request (DE 1245W) (PDF)

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.