Am I Required to Register as an Employer?

Employers who operate a business can be a person or a legal entity and include:

• Sole Proprietors
• Partnerships
• Corporations
• Nonprofit and charitable organizations
• Limited Liability Companies (LLC)
• Limited Liability Partnerships (LLP)
• Public entities (including state and federal agencies)
• Schools
• Associations and trusts
• Estates
• Joint ventures
• Indian tribes

Household Employers who hire household workers can be:

• Private households
• Local college clubs
• Local chapters of college fraternities or sororities

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.

An employer must register with us within 15 days of becoming an employer who has met this requirement.

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

• A sole proprietor (employer) hires an employee in March at a wage of $75 per month. The employer is required effective April 1 since the employer did not pay the employee over $100 during the first quarter of the year (January-March) but will pay over $100 during the second quarter (April-June).
• A corporation operates without any employees except for the corporate president. The corporation is an employer and is required to register if the corporate president is paid wages of over $100 in a calendar quarter.
• A two-person partnership operates a business in which each partner draws a salary of $1,000 during the first quarter of the year. When one partner goes on vacation, an employee is hired and paid $95 during the quarter. The partnership is not required to register as an employer since partnership draws are not considered wages and the employee who was hired 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 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)

As a household employer, you must report when you employ one or more people to perform work and pay cash wages of $750 or more in a calendar quarter.

Register with us using e-Services for Business. You must submit a Employers of Household Workers Registration and Update Form (DE1 HW) (PDF) within 15 days after you pay $750 in total cash wages.

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 Next.
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 us, 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 of your interactions with us to make sure your account is accurate.

You must provide your employer payroll tax account number when filing tax returns and making deposits in all electronic and paper filings. If an agent, bank, or payroll service prepares your tax return they must also include your employer payroll tax account number when filing on your behalf.

• Report wages paid to your employees and State Personal Income Tax (PIT) withheld from their wages.
• Pay Unemployment Insurance (UI) and Employment Training Tax (ETT) on your employee’s wages, as well as withholding and remitting State Disability Insurance (SDI) 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.
• If you use the services of independent contractors, you may also have to report them. Refer to Independent Contractor Reporting to learn more.
• Post notices in your workplace and to provide your employees with benefit information. Refer to Required Notices and Pamphlets to learn more about posting requirements.

State law requires all employers to electronically submit employment tax returns, wage reports and payroll tax deposits to us.

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 forms:

• California Employee’s Withholding Allowance Certificate (DE 4) (PDF)
• Federal IRS Form W-4

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 State Disability Insurance 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.

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 FUTA Tax Return (IRS Form 940).

Contact the IRS for information on federal filing requirements.

Mail-in Registration

Complete the registration form for your type of business:

• Commercial Employer Account Registration and Update Form (Including Pacific Maritime, and Fishing Boats) (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)
• Nonprofit Employers Registration and Update Form (DE 1NP) (PDF)
• Employers Depositing Only Personal Income Tax Withholding Registration and Update Form (DE 1P) (PDF)
• Employer of Household Workers (DE1HW) (PDF)

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 – Business Permits Made Simple
• 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-fee seminars to assist employers in complying with California’s payroll tax laws.
• Changes to Your Business
• Required Filings and Due Dates

For More Help

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