What payroll taxes does a California employer pay?

On the employer side you pay matching FICA — 6.2% Social Security (to $168,600) and 1.45% Medicare — plus federal FUTA, California State Unemployment Insurance (UI), and the Employment Training Tax (ETT). California SDI is withheld from the employee's wages, not paid by the employer.

What is the California new-employer UI rate?

New California employers pay a State Unemployment Insurance rate of 3.4% on the first $7,000 of each employee's annual wages for the first two to three years. After that the EDD assigns an experience-rated rate between 1.5% and 6.2% based on your layoff history.

How does FUTA interact with California UI?

FUTA is 6.0% on the first $7,000 of wages, but employers normally get a 5.4% credit for paying state UI on time, leaving an effective 0.6% ($42 per employee). California has at times lost part of this credit as a credit-reduction state, raising the effective FUTA rate.

What is the Employment Training Tax (ETT)?

California's Employment Training Tax is 0.1% on the first $7,000 of each employee's wages, capped at $7 per employee per year. It funds workforce training programs. Most positive-balance employers pay it; it is small but part of your total employer cost.

Does the employer pay California SDI?

No. State Disability Insurance (1.1% in 2024) is withheld from the employee's paycheck, not paid by the employer. As an employer your California-specific costs are UI and ETT, both on the first $7,000 of wages, plus federal FICA matching and FUTA.

California Employer Payroll Tax Calculator

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Hiring in California costs more than the headline salary. On top of the wage you pay matching FICA, federal FUTA, California State Unemployment Insurance, and the Employment Training Tax. This calculator totals the employer-side payroll tax so you can see the true cost of an employee.

How it works

Employer payroll taxes stack on top of gross wages, each with its own wage base:

Employer FICA = 6.2% (Social Security, to $168,600) + 1.45% (Medicare, all wages)
FUTA          = 0.6% effective on first $7,000   (6.0% gross − 5.4% state credit)
California UI  = your UI rate (3.4% new employer) on first $7,000
California ETT = 0.1% on first $7,000 (max $7)

FICA matching is the largest component and applies to all wages up to the Social Security cap. The California-specific taxes — UI and ETT — apply only to the first 7,000 dollars of each employee’s annual wages, so they are flat dollar amounts once the employee earns above that threshold.

Example

For an employee earning 60,000 dollars a year, employer FICA is about 4,590 dollars (6.2% + 1.45%), FUTA is 42 dollars, California UI at 3.4% is 238 dollars, and ETT is 7 dollars. Total employer payroll tax is roughly 4,877 dollars, making the all-in cost about 64,877 dollars.

Notes

This estimates employer payroll taxes only — not workers’ compensation insurance, benefits, or the employee-side withholdings (which include SDI). California has occasionally been a FUTA credit-reduction state, raising the effective FUTA rate above 0.6 percent. Your experience-rated UI rate may differ from the 3.4 percent new-employer default. Confirm with your EDD rate notice.