EDD DE 44: California Employer's Guide

businesses. The ETT fund promotes a healthy labor market by helping California businesses invest in a skilled and productive workforce while developing the skills of new and incumbent workers. Who Pays It? ETT is an employer-paid tax. Employers are subject to pay 0.1 percent (.001) for ETT on the first $7,000 in wages paid to each employee in a calendar year. The tax rate is set by statute at 0.1 percent (.001) of UI taxable wages for employers with positive UI reserve account balances and subject to section 977(c) of the California Unemployment Insurance Code (CUIC). The maximum tax is $7 per employee per year ($7,000 x .001). State Disability Insurance Tax What Is SDI Tax? SDI allows the Disability Fund to pay Disability Insurance (DI) and PFL benefits to eligible California workers. DI benefits are paid to eligible California workers who lose wages when they are unable to work due to a non-work- related illness, injury, or pregnancy. PFL benefits are paid to eligible California workers who take time off work to care for a seriously ill child, parent, parent-in-law, grandparent, grandchild, sibling, spouse, or registered domestic partner. Benefits are also available to new parents who need time to bond with a new child entering the family by birth, adoption, or foster care placement. Benefits are also available to California workers who participate in a qualifying event because of a spouse, registered domestic partner, parent, or child’s military deployment to a foreign country. Who Pays It? The SDI program is funded through a payroll deduction from employees’ wages. Employers withhold 1.3 percent (.013) for SDI on all subject wages paid to each employee in a calendar year. The SDI rate is set by law and may change each year. DE 44 Rev. 52 (4-26) (INTERNET) 8 Taxpayer Assistance Center 1-888-745-3886 Page 16 of 132  State Payroll Taxes California Personal Income Tax What Is California PIT? California PIT is a tax imposed on California residents’ income and on income that California nonresidents derive from California. EDD reports, collects, and enforces PIT withholding. Taxes collected by the Franchise Tax Board (FTB) and EDD support California public services, such as schools, public parks, roads, health, and human services. Who Pays It? California PIT is withheld from employee wages based on the Employee’s Withholding Allowance Certificate (DE 4) on file with their employer and based on the flat rate withholding when paying supplemental wages, such as bonuses, refer to page 18. State Payroll Taxes Unemployment Employment State Disability California Insurance Training Tax Personal Income Tax Who Pays? Employer Employer Employee Employee