Fillable Printable De 231Q Infor Sheet: Ss/Medicare/Sdi Employr
Fillable Printable De 231Q Infor Sheet: Ss/Medicare/Sdi Employr
De 231Q Infor Sheet: Ss/Medicare/Sdi Employr
An employer may pay an employee’s share of Social
Security/Medicare (taxes imposed under the Federal
Insurance Contributions Act [FICA]), State Disability
Insurance* (SDI), and/or federal income taxes without
deduction from the employee’s salary. The payments made
by the employer on behalf of the employee may constitute
additional wages, depending on the type of employer.
HOUSEHOLD OR AGRICULTURAL EMPLOYER
When a household or agricultural employer pays Social
Security and Medicare (FICA) without deduction from
an employee’s wages, the additional amount is not
considered an increase to the employee’s wages
when calculating the Unemployment Insurance (UI),
Employment Training Tax (ETT), or SDI taxes.
When a household or agricultural employer pays SDI
without deduction from the employee’s wages, the
additional amount is considered an increase to the
employee’s wages for payroll tax purposes and is subject to
UI, ETT, and SDI.
Household and agricultural employers are not required to
withhold Personal Income Tax (PIT) from wages. However,
the amount the employer paid in FICA and/or SDI without
deduction from the employee’s pay is to be included as
part of the employee’s wages when reporting PIT wages.
These amounts should be included on the Wage and Tax
Statement, Form W-2, and reported by the employee as
taxable income on his or her personal income tax returns.
ALL OTHER EMPLOYERS
When employers other than household or agricultural
pay the employee’s share of FICA and/or SDI without
deducting it from the employee’s wages, the employee’s
wages increase by the amount of FICA and/or SDI paid. The
amount the employer paid is subject to UI, ETT, and SDI.
This amount is also reportable as PIT wages, is subject to
PIT withholding, should be included on the Form W-2, and
should be reported by the employee as taxable income on
his or her personal income tax returns.
DETERMINING TOTAL SUBJECT WAGES (Wages subject
to UI, ETT, and SDI)
The following formula is used to calculate the total subject
wages:
Formula: S = W
(1 – R)
S = Actual amount of salary paid, without deductions
R = Rate of tax or taxes paid
W = The employee’s reportable wage
(total subject wages)
SOCIAL SECURITY/MEDICARE/STATE DISABILITY INSURANCE/FEDERAL INCOME
TAXES PAID BY AN EMPLOYER
RATE TABLE (R)
2015 2016 2017
SDI ONLY .0090 .0090 .0090
FICA ONLY .0765 .0765 .0765
FICA & SDI .0855 .0855 .0855
NOTE: The rate used in the formula will change
whenever the FICA and/or SDI tax rate changes.
Form W-2
For purposes of the Form W-2, the state wages should
include the increase discussed above based on your
calculations. Also, the SDI paid by the employer should be
shown on the Form W-2 as though the SDI amounts were
actually withheld from the employee’s pay.
Voluntary Plan Disability Insurance (VPDI)
If the employer has an approved VPDI in lieu of SDI,
the amounts paid into the plan by the employer do not
constitute additional wages to the employee. The VPDI
amount shown on the Form W-2 should be zero.
DETERMINING PIT WAGES
Please follow specific example as provided.
EXAMPLES
The following examples illustrate the possible reporting
calculations for employers.
Employer Pays Both the Employee’s Share of FICA and
Employee’s SDI
Example 1
Household or Agricultural Employers
Salary paid to your employee in the first quarter of 2017 is
$1,000. Payments made for FICA for your employees are
not included when calculating UI, ETT, and SDI taxes.
Therefore, to calculate total subject wages (wages subject to
UI, ETT, and SDI), use the “SDI ONLY” rate (.0090 as shown
in the RATE TABLE) and complete the calculation:
$1,000 ÷ (1 – .0090) = $1,009.08
To calculate PIT wages, use the factor rate of 1.08628**
to complete the calculation:
$1,000 x 1.08628 = $1,086.28
**The factor is the result of 1 + ([total subject wages ÷
actual salary paid] x FICA & SDI rate). For the year 2017,
the basis of the factor is:
1+ ([$1,009.08 ÷ $1,000] x .0855) = 1.08628
DE 231Q Rev. 33 (1-17) (INTERNET) Page 1 of 3 CU
*Includes Paid Family Leave (PFL).
Total subject wages of $1,009.08 must be reported on
the Quarterly Contribution Return and Report of Wages
(Continuation), DE 9C, or the Employer of Household
Worker(s) Quarterly Report of Wages and Withholdings,
DE 3BHW. The PIT wages of $1,086.28 must be reported
on the DE 9C or DE 3BHW and included as wages on the
employee’s Form W-2.
Example 2
All Other Employers
Salary paid to your employee in the first quarter of 2017
is $1,000. To calculate total subject wages (wages subject
to UI, ETT, and SDI) and PIT wages, use the “FICA & SDI”
rate (.0855 as shown in the RATE TABLE) and complete
the calculation:
$1,000 ÷ (1 – .0855) = $1,093.49
Total subject wages of $1,093.49 must be reported on
the DE 9C. The PIT wages of $1,093.49 are subject to PIT
withholding, must be reported on the DE 9C, and should be
included as wages on the employee’s Form W-2.
Employer Pays Employee’s Share of FICA Only
Example 3
Household or Agricultural Employers
Salary paid to your employee in the first quarter of 2017 is
$1,000. Payments made for FICA for your employees are
not included when calculating the UI, ETT, and SDI taxes.
Therefore, the total subject wages are $1,000.
To calculate PIT wages, use the factor rate of 1.0765** to
complete the calculation:
$1,000 x 1.0765 = $1,076.50
**The factor is the result of 1 + ([total subject wages ÷
actual wages paid] x FICA Only rate). For the year 2017,
the basis of the factor is:
1 + ([$1,000 ÷ $1,000] x .0765) = 1.0765
Total subject wages of $1,000 must be reported on the
DE 9C or the DE 3BHW. The PIT wages of $1,076.50
must be reported on the DE 9C or DE 3BHW and
included as wages on the employee’s Form W-2.
Example 4
All Other Employers
Salary paid to your employee in the first quarter of 2017 is
$1,000. To calculate total subject wages and PIT wages,
use the “FICA ONLY” rate (.0765 as shown in the RATE
TABLE) and complete the calculation:
$1,000 ÷ (1 – .0765) = $1,082.84
Total subject wages of $1,082.84 must be reported on
the DE 9C. The PIT wages of $1,082.84 are subject to PIT
withholding, must be reported on the DE 9C, and should
be included as wages on the employee’s Form W-2.
Employer Pays the Employee’s SDI Only
Example 5
For All Employers (Including Household and Agricultural
Employers)
Salary paid to your employee in the first quarter of 2017 is
$1,000. To calculate total subject wages and PIT wages,
use the “SDI ONLY” rate (.0090 as shown in the RATE
TABLE) and complete the calculation:
$1,000 ÷ (1 – .0090) = $1,009.08***
Total subject wages of $1,009.08 must be reported on the
DE 9C or DE 3BHW. The PIT wages of $1,009.08 must
be reported on the DE 9C or DE 3BHW and included as
wages on the employee’s Form W-2.
***For all employers except household and agricultural
employers, PIT wages of $1,009.08 are subject to PIT
withholding.
FEDERAL INCOME TAX PAID BY AN EMPLOYER
A
s a result of the changes made to Section 17141.3 of the
Revenue and Taxation Code, effective October 1, 2013,
Section 13009(q) of the California Unemployment Insurance
Code (CUIC) also excludes from gross income, for PIT
purposes only, any amounts received by an employee from
an employer to compensate for additional federal income
taxes the employee incurs on employer-provided benefits
because, for federal income tax purposes, the registered
domestic partner of the employee is not considered a
spouse under Section 105(a) or Section 106(a) of the
Internal Revenue Code. This exclusion is effective until
January 1, 2019.
However, no changes were made to Division 1, Part 1,
of the CUIC. Therefore, the additional federal income
taxes paid by the employer on behalf of the employee are
considered subject wages for UI, ETT, and SDI purposes.
Example:
Chris and Kelly are registered domestic partners. Chris’
employer pays for the cost of health insurance for Kelly.
The cost of Kelly’s insurance is $5,000 for the year 2017.
Kelly is not Chris’ dependent; therefore, the $5,000 cost of
insurance for Kelly is included in Chris’ wages and subject
to federal income tax, UI, ETT, and SDI. Chris’ employer
pays all federal income tax incurred by Chris for the cost
of health insurance for Kelly.
To calculate the total subject wages with regards to the
employer provided health insurance, assume that the
taxpayer is in the 35 percent federal tax bracket and
complete the calculation:
$5,000 ÷ (1 – .3500) = $7,692.31
Total subject wages must include the $7,692.31 when
reported on the DE 9C and included as wages on the
employee’s Form W-2. The total PIT wages should not
include the $7,692.31 as the entire amount is excluded
from gross wages for PIT purposes.
Note: For California income tax purposes, a registered
domestic partner is considered a spouse and the employer-
provided benefits are excluded from gross wages for PIT
purposes.
DE 231Q Rev. 33 (1-17) (INTERNET) Page 2 of 3
REFERENCES
The CUIC governs and defines reportable wages in
California. Section 935 of the CUIC excludes from
wages, for UI, ETT, and SDI purposes, payments made by
household and agricultural employers for the employee’s
share of FICA. Section 926 of the CUIC governs all other
employers when determining wages subject to UI, ETT,
and SDI.
Household and agricultural employers are not required to
withhold PIT from wages. However, these wages should
be reported by the employees as taxable income on their
personal income tax returns. Therefore, the employer
is required to report the wages as PIT subject wages.
Sections 13009, 13009.5, and 13020 of the CUIC govern
PIT withholding and reportable PIT wages.
This information sheet is provided as a public service and is intended to provide nontechnical assistance. Every attempt has been made
to provide information that is consistent with the appropriate statutes, rules, and administrative and court decisions. Any information that
is inconsistent with the law, regulations, and administrative and court decisions is not binding on either the Employment Development
Department or the taxpayer. Any information provided is not intended to be legal, accounting, tax, investment, or other professional advice.
ADDITIONAL INFORMATION
For further assistance, please contact the Taxpayer
Assistance Center at 888-745-3886 or visit the nearest
Employment Tax Office listed in the California Employer’s
Guide, DE 44, and on the Employment Development
Department (EDD) website at
www.edd.ca.gov/Office_Locator/.
The EDD is an equal opportunity employer/program.
Auxiliary aids and services are available upon request to
individuals with disabilities. Requests for services, aids,
and/or alternate formats need to be made by calling
888-745-3886 (voice) or TTY 800-547-9565.
DE 231Q Rev. 33 (1-17) (INTERNET) Page 3 of 3
