California asks more of household employers than federal law does. The state has its own registration threshold, its own disability insurance withheld from every dollar of wages, a minimum wage of $16.90 an hour for 2026, and an overtime rule written for personal attendants. Searches for "California payroll services" often come from families trying to work out whether they need to pay someone to handle all this.
This post sets out the rules from the EDD and the Department of Industrial Relations (DIR), then compares the three ways to meet them. Federal rules for household employers (Social Security, Medicare, FUTA and Schedule H) apply on top; our caregiver payroll and nanny tax posts cover those.
California's household employer thresholds
The EDD counts cash wages paid to all household workers in a calendar quarter. Register with the EDD within 15 days after you first pay $750 in total cash wages in a quarter.
| Cash wages in a quarter | What you do |
|---|---|
| Under $750 | Not yet required to register with the EDD |
| $750 to $999.99 | Register and withhold State Disability Insurance (SDI) |
| $1,000 or more | Withhold SDI and pay Unemployment Insurance (UI) and Employment Training Tax (ETT) |
| Any amount | California income tax withholding is voluntary: only if the worker asks and you agree. You still report the wages |
| Tax | 2026 rate | Paid by | Wage limit |
|---|---|---|---|
| State Disability Insurance (SDI) | 1.3% | Employee (you withhold it) | None: all wages since 1 January 2024 |
| Unemployment Insurance (UI) | 3.4% for a new employer | Employer | $7,000 per employee per year |
| Employment Training Tax (ETT) | 0.1% | Employer | $7,000 per employee per year |
Reporting depends on the size of your payroll. Household employers paying under $20,000 a year can elect to be annual filers: a quarterly report of wages and withholding (DE 3BHW) and one annual return with payment (DE 3HW). Larger household payrolls file the standard quarterly DE 9 and DE 9C.
Wage rules every California household employer follows
- Minimum wage: $16.90 an hour from 1 January 2026 for all employers, regardless of size. Many cities and counties set a higher local minimum, and the higher one applies.
- Overtime for personal attendants: under the Domestic Worker Bill of Rights, a personal attendant gets 1.5 times the regular rate for hours over 9 in a day or over 45 in a week. A personal attendant mainly supervises, feeds or dresses a child or a person who needs care; someone who spends more than 20% of their time on other household work, such as cleaning, cooking or laundry, isn't one.
- Family members of the employer (parent, grandparent, spouse, sibling or child) are excluded from that overtime rule.
- Other household workers, such as housekeepers and many nannies who do general housework, fall under the DIR's wage order for household occupations, which has its own overtime rules for live-in and live-out workers.
- An itemized wage statement every payday: gross and net wages, total hours, each deduction, the pay period dates, the employee's name and last four digits of their Social Security number, your name and address, and every hourly rate with the hours worked at it.
Your three options, compared
| Agency employs the worker | Household payroll service | Do it yourself | |
|---|---|---|---|
| Who is the employer | The agency | You | You |
| Who registers with the EDD and files | The agency | The service, on your behalf | You |
| Typical cost | Built into the agency's hourly rate | A monthly fee | Your time; per-document cost for any tools |
| Who chooses the worker | Usually the agency | You | You |
| Wage statement each payday | Agency provides it | Service provides it | You provide it |
| Best for | Families who want no employer role | Families who want to hire directly but not file | One worker, steady hours, comfortable with forms |
If you go the do-it-yourself route, the yearly rhythm is: register with the EDD and get a federal EIN, withhold SDI (and federal Social Security and Medicare once you reach the federal threshold) each payday, give a wage statement each payday, file the EDD reports on schedule, and at year end give the worker a Form W-2 and file Schedule H with your federal return.
A worked example
A nanny is paid $25 an hour for 40 hours a week, $1,000 gross. California SDI withheld is 1.3%, or $13.00. Once the year's federal threshold is expected to be met, Social Security (6.2%, $62.00) and Medicare (1.45%, $14.50) are withheld too. With no income tax withholding agreed, net pay is $910.50. On your side you owe the matching $76.50 of federal Social Security and Medicare, and UI and ETT on the first $7,000 of wages in the year. The California paycheck calculator works out the employee side for any pay and schedule.
Where PayDocs fits
If you run household payroll yourself, PayDocs covers the documents: a pay stub each payday with hours, rates, every deduction and year-to-date totals, and Form W-2 copies at year end. PayDocs works out federal income tax, Social Security, Medicare and supported state taxes for 2026 pay dates (see what we calculate). Every line stays editable, so leave income tax withholding off if you haven't agreed to it. You preview free and pay per document, with no subscription.
PayDocs doesn't register you with the EDD, pay or file state or federal payroll taxes, or decide whether a worker is a personal attendant. Check that your pay stub layout shows every item Labor Code section 226 lists before you hand it over.
Questions
When does a California household employer have to register with the EDD?
Within 15 days after paying $750 or more in total cash wages to household workers in a calendar quarter.
What is the California SDI rate for 2026?
1.3% of wages, withheld from the employee's pay. There is no wage limit: SDI applies to all wages.
Do I have to withhold California income tax for my nanny?
No. For household workers, California income tax withholding is voluntary: you withhold only if the worker asks and you agree. You still report the wages to the EDD.
Does my caregiver get overtime in California?
If they are a personal attendant, yes: 1.5 times the regular rate after 9 hours in a day or 45 hours in a week, unless they are a close family member of yours. Other household workers follow the household occupations wage order.
Sources
- California EDD: Household employer payroll taxes
- California EDD: Rates and withholding (2026)
- California DIR: Minimum wage FAQ
- California DIR: Domestic Worker Bill of Rights FAQ
- California DIR: Paydays, pay periods and the final paycheck (wage statements)
- California DIR: IWC Wage Order 15, household occupations
- IRS: Publication 926, Household Employer's Tax Guide (2026)
Sources checked October 4, 2026. This article explains how pay documents work; it is not tax or legal advice.
