California Payroll Compliance Map

California Payroll Compliance Map

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WWT – United States – California Payroll Income Tax Deduction

WWT-US(CA)-01 WWT Tax Entity

Question from client:
Is the United States salary income tax levied in federal or states? Or both federal and states?
Are the federal and states personal income tax that levied separately? Or levied together?
What is the standard withholding tax rate?

Answer from Evershine RD:
The U.S. federal government, and state and local governments in the U.S., use the pay-as-you-go (PAYG) method, also known as the pay-as-you-earn method (PAYE), to collect taxes through deductions from employment income paid to employees that employers must timely transmit to applicable revenue agencies.

Federal
There are several withholding tables applicable for different needs.
If you have an automated payroll system, the table below works for Forms W-4 for all prior, current, and future years.
This table also suitable for any amounts of wages and any number of withholding allowances claimed.
For Example:

Percentage method tables for Automated Payroll Systems (Standard)

Filing Status Adjusted Annual Wage Amount (USD) The tentative amount to withhold is: (USD) Plus this percentage of the amount that the Adjusted Annual Wage exceeds (USD)
At least But less than
Single or Married Filing Separately 0 3,950 0 0% 0
3,950 13,900 0 10% 3,950
13,900 44,475 995 12% 13,900
44,475 90,325 4,664 22% 44,475
90,325 168,875 14,751 24% 90,325
168,875 213,375 33,603 32% 168,875
213,375 527,550 47,843 35% 213,375
527,550 157,804.25 37% 527,550
Married Filing Jointly 0 12,200 0 0% 0
12,200 32,100 0 10% 12,200
32,100 93,250 1,990 12% 32,100
93,250 184,950 9,328 22% 93,250
184,950 342,050 29,502 24% 184,950
342,050 431,050 67,206 32% 342,050
431,050 640,500 95,686 35% 431,050
640,500 168,993.50 37% 640,500
Head of Household 0 10,200 0 0% 0
10,200 24,400 0 10% 10,200
24,400 64,400 1,420 12% 24,400
64,400 96,550 6,220 22% 64,400
96,550 175,100 13,293 24% 96,550
175,100 219,600 32,145 32% 175,100
219,600 533,800 46,385 35% 219,600
533,800 156,355 37% 533,800

States – California

There are two methods of withholding tax.
Method B below may be used to calculate withholding amounts either manually or by computer.
This method will give an exact amount of tax to withhold.

Method B: Exact Calculation Method (Year 2022)

Monthly Payroll Period

Filing Status Taxable Income Amount (USD) The Computed Tax is: (USD)
Over But Not Over Of Amount Over Plus
Single Persons, Dual Income Married, Or Married with Multiple Employers 0 778 1.10% 0 0.00
778 1,842 2.20% 778 8.56
1,842 2,908 4.40% 1,842 31.97
2,908 4,036 6.60% 2,908 78.87
4,036 5,102 8.80% 4,036 153.32
5,102 26,058 10.23% 5,102 247.13
26,058 31,268 11.33% 26,058 2,390.93
31,268 52,114 12.43% 31,268 2,981.22
52,114 83,334 13.53% 52,114 5,572.38
83,334 and over 14.63% 83,334 9,796.45
Married Persons 0 1,556 1.10% 0 0
1,556 3,684 2.20% 1,556 17.12
3,684 5,816 4.40% 3,684 63.94
5,816 8,072 6.60% 5,816 157.75
8,072 10,204 8.80% 8,072 306.65
10,204 52,116 10.23% 10,204 494.27
52,116 62,536 11.33% 52,116 4,781.87
62,536 83,334 12.43% 62,536 5,962.46
83,334 104,228 13.53% 83,334 8,547.65
104,228 and over 14.63% 104,228 11,374.61
Unmarried/ Head of Household 0 1,556 1.10% 0 0
1,556 3,684 2.20% 1,556 17.12
3,684 4,750 4.40% 3,684 63.94
4,750 5,878 6.60% 4,750 110.84
5,878 6,944 8.80% 5,878 185.29
6,944 35,438 10.23% 6,944 279.10
35,438 42,526 11.33% 35,438 3,194.04
42,526 70,876 12.43% 42,526 3,997.11
70,876 83,334 13.53% 70,876 7,521.02
83,334 and over 14.63% 83,334 9,206.59

WWT-US(CA)-02 Registration

Question from client:
The United States salary income tax collection is under the jurisdiction of which government unit?
The registration of the United States salary income tax collection status, that is, the application procedure for the employer withholding certificate number, paper certificate number application, or online account application? Website? Employer withholding certificate?
What is the advance certificate number of the number?
Do you need to use the industrial and commercial certificate e-card to apply?

Answer from Evershine RD:

Federal

United States payroll tax is administered under Internal Revenue Service (IRS).
Employers must have an employer identification number (EIN) before remitting forms and withheld taxes to the IRS.
Employers can apply for an EIN online using the IRS website, by calling 800-829-4933, or by faxing or mailing Form SS-4, Application for Employer Identification Number, to the IRS.
Often, the employer’s federal tax identification number is used as the state identification number.

States – California

An employer must register with Employment Development Department (EDD) within 15 days of becoming an employer who has met the below requirement.
If you operate a business and employ one or more employees, you must register when you pay more than $100 ($750 for household employer) in wages in a calendar quarter.
Use e-Services for Business at https://eddservices.edd.ca.gov/acctservices/AccountManagement/AccountServlet?Command=NEW_SIGN_UP to register for your employer payroll tax account number.
Payroll tax account number also known as State Employer Identification Number (SEIN), or State ID number (EDD account number), which consists of 8-digit.

WWT-US(CA)-03 WWT Order (OD)

Question from client:
What is the order of United States salary income tax withholding declaration (information flow determines tax base) and payment (fund flow)?
Pay first and then declare?
Report first and then pays?
At the same time as the declaration and payment?

Answer from Evershine RD:
Deposit First (DF): Make monthly payments then file the required forms.

WWT-US(CA)-04 Mechanism of Filing (MOF)

Question from client:
United States’ salary income tax withholding declaration (information flow determines the tax base)
What is the method of account return?
Reporting cycle: every month? Every bimonthly? Every season? every half year? Per year?
Electronic filing? Manual filing? Electronic filing and manual filing coexist?
If electronic filing is possible: Web site URL?

Answer from Evershine RD:

Federal

Form 941, Employer’s Quarterly Federal Tax Return, report on federal income tax, social security, or Medicare taxes for each quarter.
Forms W-2, Wage and Tax Statement, to report wages paid to employees each year.
It must be distributed to employees by Jan. 31 of the next year.
Also, file Copy A of all paper and electronic Forms W-2 with Form W-3, Transmittal of Wage and Tax Statements, to the Social Security Administration (SSA).
File Copy 1 to an employee’s state or local tax department.

To submit employment tax form, you need to purchase IRS-approved software.
The software will require your signature to e-file the return. You need to apply for an online signature PIN.
Alternatively, you can use the authorized IRS e-file Provider Locator Service to find a tax professional to submit your forms.

States – California

You must file the below:

  1. DE 9, Quarterly Contribution Return and Report of Wages
  2. DE 9C, Quarterly Contribution Return and Report of Wages (Continuation).
  3. DE 88 (Quarterly) or DE 88 (Monthly) – Payroll Tax Deposit

PIT and SDI deposit due dates based on federal deposit schedule, payday, and state PIT withholding.

Accumulated State PIT Withholding Payday PIT and SDI Deposit Due By California Deposit Schedule
Next-Day Federal Deposit Requirement
Less than $350 Any day April 30, 2021
August 2, 2021
November 1, 2021
January 31, 2022		 Quarterly
$350 to $500 Any day 15th of the following month Monthly
More than $500 Any day Next business day Next-Day
Semi-Weekly Federal Deposit Requirement
Less than $350 Any day April 30, 2021
August 2, 2021
November 1, 2021
January 31, 2022		 Quarterly
$350 to $500 Any day 15th of the following month Monthly
More than $500 Wed, Thurs, or Fri Following Wednesday Semi-weekly
More than $500 Sat, Sun, Mon, or Tues Following Friday Semi-weekly
Monthly, Quarterly, or Annual Federal Deposit Requirement
Less than $350 Any day April 30, 2021
August 2, 2021
November 1, 2021
January 31, 2022		 Quarterly
$350 or more Any day 15th of the following month Monthly

The latest California deposit requirements can be found at: https://edd.ca.gov/Payroll_Taxes/Timely_Payroll_Tax_Deposits.htm

To file, login to the e-Service for Business at https://eddservices.edd.ca.gov/tap/secure/eservices

WWT-US(CA)-05 Mechanism of Payment (MOP)

Question from client:
What is the funding method for the United States salary income tax withholding payment (funding flow)?
Payment cycle: M per month? B every bimonthly? Q every season? H every six months? A every year?
Automatically authorize deduction of ACH (that is, take the initiative of the recipient)?
Electronic remittance to EFT (that is, the payer takes the initiative)?
Bank counter payment OCT? Or the above methods coexist?

Answer from Evershine RD:

Federal

Due date is the same as filing date.
File and Pay at EFTPS via https://www.eftps.gov/eftps/.

States – California

DE88 – Payroll Tax Deposit
Due date refers to question WWT-US-04.
Payment method:

  1. Express Pay
  2. Login to the e-Service for Business at https://eddservices.edd.ca.gov/tap/secure/eservices
  3. Electronic Funds Transfer (EFT)
  4. Credit Card
  5. PayNearMe

BNF – Deduction of Employee Social Welfare

BNF-US(CA)-01 BNF Entity

Question from client:
United States social insurance, medical insurance, pensions, and other employee social welfare levy, is it federal?
Is it states? Or is there a federal plus states?
If there is a federal and states, are they levied separately?
Or levied together? What is the withholding tax rate?

Answer from Evershine RD:
United States social security levied at both federal and states level.

Federal

The federal government enacts laws regarding social taxes under Federal Insurance Contributions Act (FICA), and unemployment taxes under the Federal Unemployment Tax Act (FUTA).
All states, the district and territories are required to assess their own unemployment tax as part of the FUTA program.

Social Security Taxes Employee Employer Maximum wage base (Accumulated)
FICA:
Social Security Tax/ OASDI Tax		 6.2% 6.2% $147,000
FICA:
Medicare Tax/ Hospital Insurance (HI)		 1.45% + 0.9% on excess annual wage $200K 1.45% $200,000 (Single), $250,000 (Married filing jointly), $125,000 (Married filing separate)
FUTA:
Federal Unemployment Tax		 N/A 6% (reduced by credit deduction of 5.4% maximum) $7,000

States – California

Social Security Taxes Employee Employer Maximum wages base (Accumulated)
California Unemployment Insurance (UI)
– Rated
– Unrated		 6.2%
3.4%		  $7,000
California Employment Training Tax (ETT) – 0.1% $7,000
State Disability Insurance (SDI) 1.1% – $145,600

BNF-US(CA)-02 Registration

Question from client:
Social Security Certificate Number? What is the name of the government agency in charge of social insurance?
Medical insurance certificate number? What is the name of the government agency in charge of medical insurance?
Pension certificate number? The name of the government agency in charge of pensions?
How to apply for the social welfare certificate number for employees in the country?
Paper certificate number application? Or online account application? Website?
Need to use the industrial and commercial certificate electronic card to apply?
Are the above three certificate numbers unified or separate?

Answer from Evershine RD:

Federal

The Internal Revenue Service (IRS) oversees collection of FICA (and FUTA) taxes while employers are required to annually report individual covered wage amounts and FICA (and FUTA) taxes withheld to the U.S. Social Security Administration (SSA).
The SSA administers the Social Security benefits program.
Employers can register for an employer identification number (EIN) through online using the IRS website, by calling 800-829-4933, or by faxing or mailing Form SS-4, Application for Employer Identification Number, to the IRS.

States – California

California social security is administered under Employment Development Department (EDD).
Use e-Services for Business at https://eddservices.edd.ca.gov/acctservices/AccountManagement/AccountServlet?Command=NEW_SIGN_UP to register for EDD account number.
EDD account number consists of 8-digit.

BNF-US(CA)-03 BNF Order (OD)

Question from client:
What is the order of the withholding declaration of social welfare for United States employees (information flow determines the tax base) and payment (fund flow)?
Pay first and then declare? Report first and then pays?
At the same time as the declaration and payment?

Answer from Evershine RD:
Same Period: Report and pay at the same time.

BNF-US(CA)-04 Mechanism of Filing (MOF)

Question from client:
What is the method of reporting for withholding of social benefits for United States employees (information flow determines the tax base)?
Reporting cycle: every month? Every bimonthly? Every season? Every half year? Per year?
Electronic filing? Manual filing? Electronic filing and manual filing coexist? If electronic filing is possible: Web site URL?

Answer from Evershine RD:

Federal

Form 941, Employer’s Quarterly Federal Tax Return, report on federal income tax, social security, or Medicare taxes for each quarter.
Report FUTA taxes by filing Form 940, Employer’s Annual Federal Unemployment (FUTA) Tax Return. Due by Jan 31 of the following year.
To submit employment tax form, you need to purchase IRS-approved software.
The software will require your signature to e-file the return. You need to apply for an online signature PIN.
Alternatively, you can use the authorized IRS e-file Provider Locator Service to find a tax professional to submit your forms.

States – California

You must file the below:

  1. DE 9, Quarterly Contribution Return and Report of Wages
  2. DE 9C, Quarterly Contribution Return and Report of Wages (Continuation).
  3. DE 88 (Quarterly) or DE 88 (Monthly) – Payroll Tax Deposit

PIT and SDI deposit due dates based on federal deposit schedule, payday, and state PIT withholding.

Accumulated State PIT Withholding Payday PIT and SDI Deposit Due By California Deposit Schedule
Next-Day Federal Deposit Requirement
Less than $350 Any day April 30, 2021
August 2, 2021
November 1, 2021
January 31, 2022		 Quarterly
$350 to $500 Any day 15th of the following month Monthly
More than $500 Any day Next business day Next-Day
Semi-Weekly Federal Deposit Requirement
Less than $350 Any day April 30, 2021
August 2, 2021
November 1, 2021
January 31, 2022		 Quarterly
$350 to $500 Any day 15th of the following month Monthly
More than $500 Wed, Thurs, or Fri Following Wednesday Semi-weekly
More than $500 Sat, Sun, Mon, or Tues Following Friday Semi-weekly
Monthly, Quarterly, or Annual Federal Deposit Requirement
Less than $350 Any day April 30, 2021
August 2, 2021
November 1, 2021
January 31, 2022		 Quarterly
$350 or more Any day 15th of the following month Monthly

The latest California deposit requirements can be found at: https://edd.ca.gov/Payroll_Taxes/Timely_Payroll_Tax_Deposits.htm
To file, login to the e-Service for Business at https://eddservices.edd.ca.gov/tap/secure/eservices

BNF-US(CA)-05 Mechanism of Payment (MOP)

Question from client:
What is the funding method for United States employee social welfare withholding contributions (funds flow)?
Payment cycle: M per month? B every bimonthly? Q every season? H every six months? A every year?
Automatically authorize deduction of ACH (that is, take the initiative of the recipient)?
Electronic remittance to EFT (that is, the payer takes the initiative)?
Bank counter payment OCT?
Or the above methods coexist?

Answer from Evershine RD:  

Federal

Due date is the same as filing date.
File and Pay at EFTPS via https://www.eftps.gov/eftps/.

States – California
DE88 – Payroll Tax Deposit
Due date refers to question BNF-US-04.
Payment method:

  1. Express Pay
  2. Login to the e-Service for Business at https://eddservices.edd.ca.gov/tap/secure/eservices
  3. Electronic Funds Transfer (EFT)
  4. Credit Card
  5. PayNearMe

Please be aware below Warning:
The above contents are digested by Evershine R&D and Education Center in October 2021.
Regulations might be changed as time goes forward and different scenarios will adopt different options.
Before choosing options, please contact us or consult with your trusted professionals in this area.

Contact Us

San Francisco Evershine BPO Service Limited Corp.
E-mail: sfo4ww@evershinecpa.com
or
Contact us by WeChat or Skype or WhatsApp in the day-work-time of Taiwan (GMT+8)
The Manager of Global Payroll Services
Ms. Kerry Chen, USA Graduate School Alumni & a well-English speaker
Wechat: kchen615
Skype: oklahomekerry

or
For how to exchange data files between your HR System and Evershine Payroll relevant 5-in-1 System,
Please send an email to HQ4sfo@evershinecpa.com
Dale Chen, Principal Partner/CPA in Taiwan+China+UK will be accountable for this exchanging mechanism.
Email address:dalechen@evershinecpa.com
LinkedIn address: Dale Chen

Additional Information

Evershine CPAs Firm Headquarters
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Partner Kerry Chen,  USA Graduate School, and a well-English speaker
Tel No.: +886-2-27170515 ext. 105
Mobile: +886-939357000
Email: kerrychen@evershinecpa.com
Skype: oklahomekerry

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Evershine CPAs Firm is a LEA member headquartered in Chicago, USA, it has 600 member offices worldwide and employs approximately 28,000 people.
Besides, Evershine is Taiwan local Partner of ADP Streamline ®.
(version: 2024/07)
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