| California has four State payroll taxes which are | | | | domestic workers. The SDI benefit period depends on |
| administered by the California Employment | | | | the medical provider's statement of how long the |
| Development Department or EDD. The four taxes are: | | | | employee's disability is expected to last. The medical |
| 1. Unemployment Insurance Tax also referred to as UI | | | | provider can extend this period up to the program |
| tax: UI is paid by the employer and is part of a federal | | | | maximum, which is generally 52 weeks (39 weeks for |
| program administered by the U.S DOL (Department of | | | | elective coverage). |
| Labor) under the SSA (Social Security Act) . The UI | | | | 4. California Personal Income Tax also referred to as |
| program provides temporary payments to individuals | | | | PIT: PIT is a tax levied by the Franchise Tax Board on |
| who are un-employed through no fault of their own. | | | | the income of California residents and on income that |
| The UI taxable wage limit for tax year 2009 is $7,000 | | | | nonresidents derive within California. The state income |
| per employee, per year. The UI tax rate for new | | | | tax rates ranges from 1 percent to 9.3 percent. The |
| employers is 3.4 percent (.034) for up to three years. | | | | Golden State also assesses a 1 percent surcharge on |
| The California UI tax rate for experienced employers | | | | taxable incomes of $1 million or more. For the tax year |
| varies based on each employer's experience and the | | | | 2009 the California income tax rates are as follows: |
| balance in the UI Fund. The 2009 maximum weekly | | | | - 1 percent on the first $7,168 of taxable income. |
| benefit award is $450. If you are using a payroll | | | | - 2 percent on taxable income between $7,168 and |
| solution, then it will automatically calculate UI for you, | | | | $16,994. |
| otherwise you should be able to manually setup a new | | | | - 4 percent on taxable income between $16,994 and |
| tax category inside the software (just make sure that | | | | $26,821. |
| this tax is setup to be paid by the employer only and | | | | - 6 percent on taxable income between $26,821 and |
| not the employee) . | | | | $37,233. |
| 2. Employment Training Tax also referred to as ETT | | | | - 8 percent on taxable income between $37,233 and |
| tax: ETT is also paid by the employer , not the general | | | | $47,055. |
| public, and provides funds to train employees in | | | | - 9.3 percent on taxable income of $47,055 and |
| targeted industries to improve the competitiveness of | | | | above. |
| California businesses and helps firms threatened by | | | | A one percent surcharge is collected on taxable |
| competition from out-of-state and international | | | | incomes of one million dollars or above, making |
| companies. The 2009 ETT rate is 0.1 percent (.001) of | | | | California's highest rate 10.3 percent. California provides |
| the first $7,000 per employee, per year. | | | | two methods for calculating income tax: |
| 3. State Disability Insurance also referred to as SDI tax: | | | | - METHOD A (Wage Bracket Table Method) provides |
| SDI is a deduction from the employee's wages and | | | | a quick and easy way to select the appropriate |
| provides temporary benefit payments to workers for | | | | withholding amount, based on the payroll period, filing |
| non work-related disabilities. The SDI tax also provides | | | | status, and the number of withholding allowances |
| Paid Family Leave (PFL) benefits. Paid Family Leave is | | | | (regular and additional) if claimed. The STANDARD |
| a component of SDI and extends benefits to individuals | | | | DEDUCTION and EXEMPTION ALLOWANCE |
| unable to work because they need to care for a | | | | CREDIT are already included in the wage bracket |
| seriously ill family member or bond with a new minor | | | | tables. Even though this method involves fewer |
| child. The 2009 SDI tax rate (which includes Disability | | | | corruptions than Method B, it can't be used with a |
| Insurance and Paid Family Leave is 1.1 percent ). The | | | | computer in determining amounts to be withheld. |
| SDI taxable wage limit is $90,669 per employee, per | | | | - MEHOD B (Exact Calculation Method) may be used |
| year. The 2009 maximum weekly DI/PFL benefit | | | | to calculate withholding amounts either manually or by |
| award is $959. Most California employees are | | | | a payroll computer program. This method will give an |
| covered by SDI, except for the following categories: | | | | exact amount of tax to be withheld. To use this |
| government employees (in most cases), certain | | | | method one must enter the payroll period, filing status, |
| non-profit employees, those who claim a religious | | | | number of withholding allowances, standard deduction, |
| exemption, interstate Railroad workers and some | | | | and exemption allowance credit amounts. |