California Payroll Instructions

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Goldenseal Payroll Software Info

US Federal Withholding Tables

Free 2021 Payroll Tax Table Updates

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Turtle Creek Software provides free annual updates for California and federal payroll tax tables. To download the latest version, click here.

California has state income tax withholding. Rates changed in 2021, as they have done consistently every year since we introduced our payroll software back in 1988. The California payroll tax tables use "stepped" rates similar to the federal withholding tax tables (CA added a new step in 2005, and then two more steps in 2013).

There is also a state disability insurance withholding (SDI) and an employer training tax. Worker's comp insurance is also issued through a state agency, with rates that depend on the type of work done by each employee.

For a few years, San Francisco added a payroll expense tax of 0.38%, but it has been repealed for 2021.

HINT-- Goldenseal is set up to base worker's comp rates on the type of work done on an hourly basis. That is usually cheaper than using a flat rate for each employee, especially if they do work that uses a variety of worker's comp rates.

California State Withholding Instructions

To enter California withholding information for an employee in your Goldenseal company file, follow these steps:

  1. Choose Employees from the Accounts menu.
  2. Locate the employee record.
  3. Click the Payroll Setup button.
  4. Enter the employee's marital status into the Marital Status field (see note below).
  5. Enter the number of federal dependents into the Federal Exemptions field.
  6. Enter the number of California dependents into the State Exemptions field.
  7. Enter the California Tax Package into the Tax Package field. HINT-- If you don't see it in the list, you'll need to import the tax info first.
  8. Click OK.

Additional California allowances are claimed by the employee on the DE-4 or W-4 form, and each may be allocated as either an Estimated Deduction or as a Tax Exemption Credit (see CA Employers Guide, Method B).

Allowances to be used as Tax Exemption Credits should be entered into the State Exemptions field in the Employee Account. Allowances to be used as Estimated Deductions should be entered into the Other Exemptions field in the Employee Account.

California State Unemployment Tax Instructions

California charges SUTA on the first $7,000 of wages for each employee. The percentage rate depends on the employer's experience rating. In 2020 UI taxes are 3.4% for new companies, and between 1.5% and 6.2% for established firms.

To enter your California SUTA tax rate into our California payroll software, follow these steps:

  1. Choose Payroll Setup from the Costs menu, and choose Tax Items from the submenu.
  2. You'll see a list of Tax Items. Locate California SUTA tax in the list, and double-click on it. HINT: If you don't see California SUTA in the list, you'll need to import your state's payroll info first.
  3. Enter the percentage rate that you pay into the percentage field to the right of Calculation method.
  4. If the cutoff amount has changed, enter it into the dollar field to the right of First Adjustment.

California State Disability Insurance (SDI)

California has a compulsory state disability insurance which is a fixed percentage of wages, up to a cutoff amount. This is an employee deduction.

California Worker's Compensation

California Worker's Comp Insurance charges different rates for different types of work. in Goldenseal, you can handle that by entering the comp rates as a category tax, with different rates for different types of work. You set the rates in the Category Systems that you use for your job costs.

For some industries there are two different comp rates for experienced and inexperienced employees (with a cutoff wage rate to distinguish between them). You can enter two different rates into each Category System to handle that.

Click the link for more about setting up California Worker's Comp Rates.

Other California Taxes

California assesses an employment training tax. This tax is paid by the employer, and is in the CA Employee Training tax item. In 2021 this tax is .1% of wages, applied only to the first $7,000 in wages.

California Marital Status

Use the following to determine the value for the Marital Status popup menu in each Employee account:

  • Single- single employee with one personal exemption
  • Married- married employee with two personal exemptions
  • Dual Income- married employee with one personal exemption
  • Head of House- employee claims Head of Family status or is single and claims 2 or more withholding allowances
  • Other- not used

California Tax Contacts

Withholding tax website

Payroll Tax Office-- 916 255-1965
Worker's Comp-- 415 777-0777

State of California-- Employment Dev. Dept
Box 942880 Sacramento CA 94280

Official State Lawn Ornament

Northern California-- Medical Recreational marijuana plant.
Southern California-- Pink plastic flamingo, wearing shades, carrying movie script and smoking pink medical marijuana joint.