2019 CALIFORNIA EMPLOYER’S GUIDE

Please note: Page 3 The Ventura self-service office has moved from 2901 N. Ventura Road to 4820 McGrath Street, Suite 200, 93003. Page 41 In Example E, Step 3 in "TABLE 3 - STANDARD DEDUCTION TABLE" all entries in this step for $8,808 should be decreased $6 to $8,802. Adjust all totals derived using this figure on both Step 3 and Step 4. We apologize for the inconvenience.

2019 CALIFORNIA

EMPLOYER'S GUIDE

DE 44 Rev. 45 (1-19) (INTERNET)

Cover + 120 pages

Important Information

Electronic Reporting and Payment Requirement: As of January 1, 2018, employers must electronically submit employment tax returns, wage reports, and payroll tax deposits to the EDD. For more information on the e-file and e-pay mandate and related noncompliance penalties, visit edd.EfileMandate or refer to page 49.

e-Services for Business: Employers can register, view, and manage their employer payroll tax account, file reports, make deposits, and pay liabilities online. For more information, visit edd.e-Services_for_Business or refer to page 50.

State Information Data Exchange System (SIDES): Employers and third-party administrators can elect to electronically receive and respond to the EDD Notice of Unemployment Insurance Claim Filed (DE 1101CZ) using SIDES. For more information, visit edd.SIDES.

New Employee Registry (NER): All employers are required by law to report all newly hired or rehired employees to the NER within 20 days of their start-of-work date. For more information, visit edd.payroll_taxes/faq_-_california_new_employee_registry.htm or refer to page 53.

Tax Seminars: The EDD offers no-cost seminars to help employers comply with state payroll tax laws. For more information, visit edd.payroll_tax_seminars/ or refer to page 1.

Fraud Prevention, Detection, Reporting, and UI Rate Manipulation: For information on how to prevent and detect UI fraud, visit edd.unemployment/fraud_and_penalties_what_you_need_to_know.htm or refer to page 86.

Improper Payment of UI Benefits is a serious problem that has a financial impact on employers and can result in higher UI taxes for all employers. You can help by responding timely to requests for wage information. For more information, visit edd.unemployment/responding_to_ui_claim_notices.htm.

California Employer Newsletter: For the latest news and helpful information, refer to the quarterly online newsletter at edd.payroll_taxes/california_employer_newsletter.htm.

2019 Payroll Tax Rates, Taxable Wage Limits, and Maximum Benefit Amounts

Unemployment Insurance (UI) The 2019 taxable wage limit is $7,000 per employee. The UI maximum weekly benefit amount is $450. The UI tax rate for new employers is 3.4 percent (.034) for a period of two to three years. The employer rates are available online at edd.e-Services_for_Business.

Employment Training Tax (ETT) The 2019 ETT rate is 0.1 percent (.001) on the first $7,000 of each employee's wages.

State Disability Insurance (SDI) The 2019 SDI withholding rate is 1.0 percent (.01). The rate includes Disability Insurance (DI) and Paid Family Leave (PFL). The SDI taxable wage limit is $118,371 per employee, per year. The 2019 DI/PFL maximum weekly benefit amount is $1,252.

California Personal Income Tax (PIT) Withholding California PIT withholding is based on the amount of wages paid, the number of withholding allowances claimed by the employee, and the payroll period. Please refer to page 13 for additional information on PIT withholding. The California PIT withholding schedules are available on page 17 and online at edd.payroll_taxes/rates_and_withholding.htm#withholding.

For additional rate information, refer to page 10 or visit edd.payroll_taxes/rates_and_ withholding.htm.

DE 44 Rev. 45 (1-19) (INTERNET)

Inside Cover + 120 pages

CALIFORNIA LABOR AND WORKFORCE DEVELOPMENT AGENCY

Gavin Newsom Governor

Dear California Employer:

The Employment Development Department (EDD) appreciates your continued contribution to the economic well-being of this great state. We are proud to provide you with innovative and convenient services to ensure you are well informed and in compliance with your payroll tax responsibilities.

With the Assembly Bill (AB) 1245 electronic mandate in effect, you can take advantage of e-Services for Business to electronically submit your employment tax returns, wage reports, and payroll tax deposits. e-Services for Business is a fast, easy and secure way to manage your employer payroll tax account online 24 hours a day, 7 days a week. For detailed step-by-step instructions on how to complete common tasks within e-Services for Business such as creating a username and password, filing a tax return and wage report, or making a payroll tax deposit, please refer to the e-Services for Business User Guide (DE 160) available at edd.pdf_pub_ctr/de160.pdf.

In addition to payroll taxes, our website contains information critical for employers and their employees on topics such as Unemployment Insurance, Disability Insurance, jobs and training, labor market information, tax seminars, and EDD forms and publications. We encourage you to visit our website at edd., or call the Taxpayer Assistance Center at 1-888-745-3886 to take advantage of our resources.

We appreciate your commitment to doing business in California and wish you continued success in the year ahead.

Sincerely,

PATRICK W. HENNING Director

DE 44 Rev. 45 (1-19) (INTERNET)

Director's Letter + 120 pages

MANAGE YOUR EMPLOYER PAYROLL TAX ACCOUNT ONLINE!

Use the EDD e-Services for Business to electronically file reports, make deposits, update addresses, and much more.

Enroll today! edd.e-Services_for_Business

DE 44 Rev. 45 (1-19) (INTERNET)

EDD Info. + 120 pages

Seminars to Help Employers Succeed ................................................................................................................. 1 Introduction ............................................................................................................................................................. 2 Quick and Easy Access for Tax Help, Forms, and Publications ........................................................................ 3 How to Get Started ................................................................................................................................................. 4

Flowchart ........................................................................................................................................................... 5

2019 Forms and Due Dates .................................................................................................................................... 6

Who Is an Employer and When to Register ......................................................................................................... 7

Who Is an Employee? ............................................................................................................................................ 8 "Common Law" Employee or Independent Contractor ...................................................................................... 8

What Are State Payroll Taxes? .............................................................................................................................. 9 Unemployment Insurance (UI) ........................................................................................................................... 9 Employment Training Tax (ETT) ......................................................................................................................... 9 State Disability Insurance (SDI) ......................................................................................................................... 9 California Personal Income Tax (PIT) ................................................................................................................ 9 State Payroll Taxes (table) ................................................................................................................................. 10 Help Us Fight Fraud ........................................................................................................................................... 10

What Are Wages? ................................................................................................................................................... 11 Subject Wages ................................................................................................................................................... 11 Personal Income Tax (PIT) Wages .................................................................................................................... 11 Are Subject Wages and PIT Wages the Same? ................................................................................................ 11 Employers Subject to California Personal Income Tax (PIT) Only ..................................................................... 11 Meals and Lodging ............................................................................................................................................. 12 Additional Information ........................................................................................................................................ 12

Personal Income Tax (PIT) Wages Subject to California Withholding ............................................................... 13 How to Determine Which Wages Require PIT Withholding ............................................................................... 13 Marital Status, Withholding Allowances, and Exemptions Form W-4 and DE 4 ................................................ 13 Employer's Obligations for the Form W-4 and DE 4 .......................................................................................... 14 How to Determine PIT Withholding Amounts ..................................................................................................... 15 What if Your Employee Wants Additional PIT Withholding? ........................................................................ 15 How to Withhold PIT on Supplemental Wages .................................................................................................. 15 Quarterly Estimated Payments .......................................................................................................................... 15 Wages Paid to: California Residents .................................................................................................................................... 16 Nonresidents of California ........................................................................................................................... 16 PIT Withholding on Payments to Nonresident Independent Contractors ........................................................... 16 Additional Information ........................................................................................................................................ 16

California Withholding Schedules for 2019 .......................................................................................................... 17

Electronic Filing and Payment Requirements E-file and E-pay Mandate for Employer ............................................................................................................. 49

Online Services e-Services for Business ..................................................................................................................................... 50

Required Forms ...................................................................................................................................................... 52 Report of New Employee(s) (DE 34): .................................................................................................................

Overview ................................................................................................................................................................... 53 Sample DE 34 Form .................................................................................................................................... 54

Report of Independent Contractor(s) (DE 542): Overview ...................................................................................................................................................... 55 Sample DE 542 Form .................................................................................................................................. 56

edd. DE 44 Rev. 45 (1-19) (INTERNET)

i + 120 pages

Taxpayer Assistance Center 1-888-745-3886

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