There are two types of employers: those who run a business ("employers") and those who hire household workers ("household employers"):

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

• Employers who hire household workers can be:

If you are a household employer, you can obtain registration information and reporting requirements from our Information Sheet: Household Employment (DE 231L) or Household Employer's Guide (DE 8829). You may also call our Taxpayer Assistance Center at (888) 745-3886.

Generally, a business becomes subject to state payroll taxes upon paying wages over $100 in a calendar quarter to one or more employees. Wages consist of compensation for services performed, including cash payments, commissions, bonuses, and the reasonable cash value of noncash payments (like meals and lodging) for services. Once subject, an employer must complete and submit a registration form to EDD within 15 days.

Examples of when a business becomes subject:

• A sole proprietor hires an employee during the month of March at a wage of $75 per month. The employer is subject 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.

Registration

You can register online and, upon successful registration, receive a California employer account number and tax rate information immediately through EDD’s Online Services. You may call (888) 745-3886 or your nearest Employment Tax Office to get a registration form. You may also download one or order one on our Internet Order Form. Please complete the registration form for your type of business:

• Commercial Employers, Pacific Maritime, and Fishing Boats (DE 1)
• Agricultural (DE 1AG)
• Governmental Organizations, Public Schools, & Indian Tribes (DE 1GS)
• Nonprofit Employers (DE 1NP)
• Personal Income Tax Withholding Only (DE 1P)
• Employer of Household Workers (DE1HW)

Include your federal employer identification number (FEIN) on the registration form so that unemployment insurance tax credits can be properly applied when claimed on your Employer’s Annual FUTA Tax Return (IRS Form 940). For information on federal filing requirements, contact the IRS.

Mail or fax your completed registration form to the address or fax number below, also listed at the top of the registration form. You may also register by telephone by calling EDD's Tele-Reg at (916) 654-8706. When you use Tele-Reg, you will receive your EDD employer account number over the telephone and your new employer packet in three separate mailings.

After EDD receives your registration form, you will receive an eight-digit employer account number (example: 123-4567-8), sometimes called a State Employer Identification Number, SEIN, state ID number, or reserve account number. This number will be printed on all reporting forms sent to you and on all notices relating to former employees. Use it in all correspondence with EDD. If a bank or payroll service prepares your return, be sure to provide them with your employer account number. EDD will also send you a New Employee Registry letter and form (DE 34), a California Employer’s Guide (DE 44), and a new employer packet. The packet contains EDD's required posters and booklets, blank deposit coupons (DE 88ALL), and brochures about EDD services, including payroll tax seminars to help you comply with federal and state payroll tax laws. A personalized Payroll Tax Deposit (DE 88) coupon booklet will be mailed to you 4 - 6 weeks after you register.

As an employer, you are responsible for reporting wages paid to your employees and for paying Unemployment Insurance (UI) and Employment Training Tax (ETT) on those 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). You must also 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.

Encourage your employees to withhold the correct amount of state income tax by having them fill out a California Employee's Withholding Allowance Certificate (DE 4) in addition to the federal Form W-4. You can download the DE 4 or use the online calculator (Microsoft Excel required).

If you are a corporate officer and the sole shareholder (or the only shareholder other than your spouse) of a private corporation, you may elect to be excluded from State Disability Insurance coverage for benefits and contributions; see Sole Shareholder/Corporate Officer Exclusion Statement (DE 459).

If you’re a new business owner, you may find these Web sites helpful:

CalGOLD – "one stop" state, local, regional, and federal permit, licensing, and tax requirements.

Striking Gold in California – what you need to know about taxes and your small business.

California Tax Information Center – simplified income, payroll, and sales and use tax information.

If you are buying or acquiring an existing business, see Purchasing a Business With Employees.

For assistance, call our toll-free number (888) 745-3886 or visit your local Employment Tax Office.

Other EDD Payroll Tax Information