Am I Required to Register as an Employer?

An Employer can be a person or a legal entity such as a:

• Sole Proprietor
• Partnership
• Corporation
• Nonprofit and charitable organization
• Limited Liability Company (LLC)
• Limited Liability Partnership (LLP)
• Limited Partnership (LP)
• Public entity (including state and federal agencies)
• School
• Association and Trust
• Estate
• Joint venture
• Indian tribe

A Household Employer is a person or legal entity (as listed above) that hires someone to work as an employee in or around their home for the benefit of their personal household and not their business. Household employment may occur in a variety of settings, such as a:

• Private home
• Apartment
• Boat or mobile home
• Summer or winter home
• Condominium
• Local college clubs
• Local chapters of college fraternities or sororities
• Hotel room (where the worker is employed by you, not the hotel)

For more information on household employers, refer to the Information Sheet: Household Employment (DE 231L) (PDF).

Generally, a business must pay State payroll taxes when it pays more than $100 in wages in a calendar quarter to one or more employees. Wages consist of compensation for services performed, including:

• Cash payments.
• Commissions.
• Bonuses.
• Reasonable cash value of noncash payments (like meals and lodging) for services.

Examples of when a business is required to pay state payroll taxes can include:

• A sole proprietor hires an employee in March and pays wages of $75 in March. No registration is required as the employee was not paid wages in excess of $100 for the first quarter (January-March). In April, the same employee is paid $500 in wages. The employer is now required to register effective April 1 since the employer paid over $100 during the second quarter (April-June).
• A corporation operates without any employees except for the corporate president who is an employee by law. The corporation is required to register as an employer when the corporate president is paid wages of over $100 in a calendar quarter.

Example of when a business is not required to pay state payroll taxes can include:

• A two-person general partnership operates a business in which each partner draws a salary of $1,000 during the first quarter of the year. An employee is hired and paid $95 during the same first quarter. The partnership is not required to register as an employer since partnership draws are not considered wages, even if labeled as a salary, and the employee did not receive wages of over $100 in the calendar quarter.

For More Information

You can learn more about wages, subject wages, and Personal Income Tax (PIT) wages from the following resources:

• What are Wages?
• Information Sheet: Wages (DE 231A) (PDF)
• Information Sheet: Personal Income Tax Wages Reported on the Quarterly Contribution Return and Report of Wages (Continuation) (DE 9C) (DE 231PIT) (PDF)
• Information Sheet: Types of Employment (DE 231TE)
• Information Sheet: Types of Payments (DE 231TP)
• California Employer's Guide (DE 44)
• Household Employer's Guide (DE 8829)

As a household employer, you must pay State payroll taxes when you hire someone to work in or around the home for the benefit of your personal household and pay them cash wages of $750 or more in a calendar quarter. Once you meet the $750 in cash wage limit, you must include all cash and noncash payments as subject wages.

The amount of subject wages you pay in a calendar quarter will determine the employer payroll taxes you are required to withhold and pay.

If you pay (in a Quarter):

• $750 to $999.99 in a calendar quarter - Withhold State Disability Insurance (SDI) for the remainder of the current year and through the following year, even if wages fall below $750 in a quarter.
• $1,000 or more in a calendar quarter - Withhold SDI and pay Unemployment Insurance (UI) and Employment Training Tax (ETT) for the remainder of the current year and through the following year, even if wages fall below $1,000 in a quarter.

For More Information

You can learn more about wages, subject wages, and personal income tax wages from the following resources:

• What are Wages?
• Household Employer
• Information Sheet: Wages (DE 231A) (PDF)
• Information Sheet: Personal Income Tax Wages Reported on the Quarterly Contribution Return and Report of Wages (Continuation) (DE 9C) (DE 231PIT) (PDF)
• Information Sheet: Household Employment (DE 231L) (PDF)
• Household Employer's Guide (DE 8829) (PDF)
• Information Sheet: Types of Employment (DE 231TP) (PDF)

Find out how to successfully register. Choose from the following business types to learn more:

• Commercial Employers-Individual Owners, Co-Ownerships, General Partnerships
• Commercial Employers-Corporations, Limited Liability Company (LLC), Limited Liability Partnerships (LLP), Limited Partners (LP)
• Employers of Household Workers
• Non-Profit Employers
• Agricultural Employers
• Church and Religious Order Employers
• Disability Insurance Elective Coverage (DIEC)
• Public Entity Employers
• Employers Depositing Only Personal Income Tax (PIT Only) Withholding (Including Payers of Pensions and Annuities)
• Public School Employers
• Indian Tribe Employers

1. Go to e-Services for Business.
2. Select Enroll.
3. Enter the required information and select Continue.
4. Choose your security questions and answer each question, then select Continue.
5. Review the Enrollment Summary and print a copy for your records, then select Submit.
6. Select the verification link in the email we sent you 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.

1. Select New Employer, then select Next.
2. Select Register for Employer Payroll Tax Account Number.
3. Complete the online registration application.
4. Select Submit.

This process will create an employer payroll tax account number.

Once you have registered your business with the Employment Development Department (EDD), you will be issued an eight-digit employer payroll tax account number (example: 000-0000-0), also known as a State Employer Identification Number(SEIN) or State ID number. Your employer payroll tax account number is required for all interactions with the EDD, including filing your payroll tax returns, wage reports, submitting payments, filing adjustments, and updating your account.

• Report wages paid to your employees and withholdings on the tax return and wage report.
• Pay Unemployment Insurance (UI) and Employment Training Tax (ETT) on your employee’s wages (as applicable).
• Withhold and remit State Disability Insurance (SDI) (as applicable) and Personal Income Tax (PIT) due on wages paid to your workers (see Rates, Withholding Schedules, & Meals and Lodging Values).
• Report all new employees to the New Employee Registry within 20 days of their start-to-work date.
• Report independent contractor information (if applicable). Refer to Independent Contractor Reporting to learn more.
• Post notices in your workplace and provide your employees with benefit information. Refer to Required Notices and Pamphlets to learn more about posting requirements.
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For More Information

• E-file and E-pay Mandate for Employers
• Required Filings and Due Dates
• Helpful Resources for the New Employer
• Payroll Tax Seminars

e-Services for Business is your fast, easy, and secure way to manage your employer payroll tax accounts online.

Features:

• Register, close, or re-open an employer payroll tax account.
• File, adjust, and print returns and reports.
• Make payments.
• Protest Unemployment Insurance benefit charges or rates.
• Authorize a power of attorney.
• Report changes to your business.
• View notices and letters.
• Report new employees or independent contractors.
• Request a transfer of a reserve account.

For more information or to enroll, refer to e-Services for Business.

Encourage your employees to withhold the correct amount of state income tax. Have your employees fill out the following form:

• California Employee’s Withholding Allowance Certificate (DE 4) (PDF)

You can find California Withholding Schedules on Rates & Withholding for more information.

If you are a corporate officer and the sole shareholder (or the only shareholder other than your spouse) of a private corporation, you can choose to be excluded from SDI coverage for benefits and contributions. Refer to the Sole Shareholder/Corporate Officer Exclusion Statement (DE 459) (PDF) for more information.

If you have already registered online, do not use this alternate method.

Mail-in Registration

Complete the registration form for your type of business:

• Commercial Employer Account Registration and Update Form (DE 1) (PDF)
• Agricultural Employer Account Registration and Update Form (DE 1AG) (PDF)
• Governmental Organizations, Public Schools, and Indian Tribes Registration and Update Form (DE 1GS) (PDF)
• Employers of Household Workers Registration and Update Form (DE 1HW) (PDF)
• Nonprofit Employers Registration and Update Form (DE 1NP) (PDF)
• Employers Depositing Only Personal Income Tax Withholding Registration and Update Form (DE 1P) (PDF)

Include your Federal Employer Identification Number (FEIN) on the registration form to ensure unemployment insurance tax credits apply correctly when claimed on your Employer’s Annual Federal Unemployment (FUTA) Tax Return (IRS Form 940).

• Contact the IRS for information on federal filing requirements.

Mail or fax your completed registration form to the address or fax number below.

Mail to:
Employment Development Department
Account Services Group, MIC 28
PO Box 826880
Sacramento CA 94280-0001

Fax: 1-916-654-9211

Note: Registration by mail may take 10-14 days to process.

• E-file and E-pay Mandate for Employers
• CalGOLD The Gold Standard For Permit Assistance
• Striking Gold in California (PDF) – What You Need to Know About Taxes and Your Small Business.
• California Tax Service Center – Guiding Taxpayers to the Forms and Services They Need
• Payroll Tax Seminars – No cost seminars to help employers follow California’s payroll tax laws.
• Changes to Your Business
• Required Filings and Due Dates
• e-services for Business - Tutorials 

For More Help

Call the Taxpayer Assistance Center at 1-888-745-3886 or visit your local Employment Tax Office.