California Business Portal

What does California consider as wages?

Wages are all compensation for an employee’s personal services, whether paid by check or cash, or the reasonable cash value of non-cash payments such as meals and lodging. The method of payment, whether by private agreement, consent, or mandate, does not change the taxability of wages paid to employees. Payments are considered wages even if the employee is: a casual worker, a day or contract laborer, part-time or temporary worker, or paid by the day, hour, or any other method or measurement. Supplemental payments, including bonuses, overtime pay, sales awards, commissions, and vacation pay are also considered wages.

Important: If you pay your employee’s share of Social Security, Medicare, and/or State Disability Insurance (SDI) without deducting the amounts from their wages, these payments may also be wages. For more information refer to the Information Sheet: Social Security/Medicare/SDI Taxes Paid by an Employer (DE 231Q)

For more information, refer to the Information Sheet: Wages (DE 231A) or call the Employment Development Department's toll-free number 1-888-745-3886.

 

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