Updated August 6, 2026 — registration steps, deadlines, and rates below were verified against official California agency sources in August 2026. Confirm current figures with the agencies before filing.
California employers must register with the Employment Development Department (EDD) within 15 days of paying more than $100 in wages in a calendar quarter.
Registration happens online through e-Services for Business and produces an eight-digit employer payroll tax account number (SEIN).
One EDD account covers all four state payroll taxes: UI and ETT (employer-paid) and SDI and PIT (withheld from employees).
As of August 2026, new employers pay a 3.4% UI rate on the first $7,000 per employee, 0.1% ETT, and withhold 1.3% SDI with no wage cap.
Report every new hire to the EDD on Form DE 34 within 20 calendar days of their start-of-work date.
California requires electronic filing and payment through e-Services for Business unless you have an approved waiver.
Why California requires payroll tax registration before your first payroll
Hiring your first employee in California triggers a state registration requirement almost immediately. Under EDD rules, a business becomes a subject employer once it pays more than $100 in wages in a calendar quarter, and it must register for an employer payroll tax account within 15 days of crossing that threshold. In practice, that means registration belongs on your checklist before you run your first payroll, not after. If you are also still sorting out federal EINs, pay schedules, and withholding setup, this state registration is one piece of the broader process of running payroll for the first time.
Registering late is not just a paperwork problem. Without a state account number, you cannot file returns or remit the taxes you are already legally accruing, and the EDD applies penalties and interest to late payments.
The accounts you need and the agency that issues them
California is simpler than many states in one respect: a single agency, the Employment Development Department (EDD), administers all four state payroll taxes, and one registration covers them. The EDD issues an eight-digit employer payroll tax account number (format 000-0000-0), also called a State Employer Identification Number or SEIN.
That one account covers four distinct taxes, which is the unusual part. Most states have unemployment insurance and income tax withholding; California adds two more. The four, per the EDD's overview of state payroll taxes, are:
Unemployment Insurance (UI) — employer-paid, funding temporary payments to people unemployed through no fault of their own.
Employment Training Tax (ETT) — employer-paid, funding training for employees in targeted industries.
State Disability Insurance (SDI) — withheld from employee wages, covering non-work-related illness, injury, or pregnancy, and including Paid Family Leave.
California Personal Income Tax (PIT) — withheld from employee wages based on each employee's DE 4 withholding certificate.
As of August 2026, the numbers look like this: new employers are assigned a 3.4% UI rate for their first two to three years, on a taxable wage base of $7,000 per employee per year. ETT is 0.1% on the same $7,000 limit. The SDI withholding rate is 1.3%, and since January 1, 2024, SDI has no taxable wage limit — all wages are subject, which surprises founders paying market engineering salaries. Current figures are published on the EDD rates and withholding page.
How to register, step by step
Confirm you meet the threshold: more than $100 in wages paid in a calendar quarter (the trigger is $750 for household employers). Your 15-day registration window starts here.
Gather your information: your Federal Employer Identification Number (FEIN), legal entity details, and the date you first paid wages. The EDD uses your FEIN to make sure your federal tax credits are applied properly.
Register online through e-Services for Business, the EDD's portal, which is available 24/7. Commercial employers complete the DE 1 registration; there are separate versions for agricultural, household, and nonprofit employers. Paper registration exists but can take 10 to 14 days to process.
Receive your eight-digit account number and add it to your payroll setup. Most payroll software files state returns and deposits automatically once this account number exists.
Ongoing obligations after you register
Registration is the start, not the end. California employers file two quarterly reports together: the DE 9 (Quarterly Contribution Return and Report of Wages), which reconciles taxes paid, and the DE 9C, which reports each employee's wages. As of August 2026, these are due the first day of the month after each quarter ends and become delinquent after that month's last day — for example, Q3 returns are due October 1 and delinquent after the start of November.
Tax deposits are made with the DE 88. UI and ETT are due quarterly, but SDI and PIT withholding deposits often come due faster: your California deposit schedule follows your federal deposit schedule plus the amount of PIT you accumulate. A quarterly depositor that accumulates $350 or more in PIT, for instance, must deposit monthly. Late payments draw a 15% penalty plus interest. California also mandates electronic filing and payment through e-Services for Business unless you hold an approved waiver, which is a big reason most startups let payroll software handle filings once the account is open.
Finally, new-hire reporting: every new or rehired employee must be reported to the EDD on Form DE 34 within 20 calendar days of their start-of-work date, per the EDD's new hire reporting rules. Rehires count if the employee was separated for at least 60 consecutive days. Penalties run $24 per unreported employee, or $490 for intentional non-compliance.
A note for remote and out-of-state employers
If your startup is incorporated or headquartered elsewhere but employs someone who works in California, the same rules generally apply: paying more than $100 in a calendar quarter in wages subject to California law makes you a subject employer with the same 15-day registration clock, the same four taxes, and the same DE 34 new-hire reporting. Registration details are on the EDD's registration requirements page. Where an employee splits time across states, situs rules get complicated quickly, and it is worth confirming your specific facts with the EDD or an advisor before assuming California does not apply.
FAQ
How long does it take to get a California employer account number?
Registering through e-Services for Business is the fastest route and can be done any time, since the portal is available 24 hours a day. Paper registration by mail may take 10 to 14 days to process. Because the registration deadline is 15 days after you cross the $100-per-quarter wage threshold, the online route is the safer choice for a startup that has already made its first hire.
Do employees pay any of these taxes themselves?
Two of the four are withheld from employee paychecks: SDI (1.3% of all wages as of August 2026, with no cap) and California PIT, which depends on the employee's DE 4 withholding certificate. The employer pays UI and ETT out of its own funds. The employer is responsible for withholding, depositing, and reporting all four through its EDD account.
Is California new-hire reporting separate from payroll tax filings?
Yes. The DE 34 Report of New Employee(s) is a standalone filing due within 20 calendar days of each employee's start-of-work date, separate from your quarterly DE 9 and DE 9C returns. It can be submitted through e-Services for Business, and most payroll systems file it automatically when you onboard an employee, but the legal obligation stays with the employer.