EmploymentQuestion 929 of 1605
A contractor hires her first employee. When must she register as an employer with the EDD for payroll tax purposes?
a.Only at the end of the calendar year
b.Never, if she pays in cash
c.Within a short period after paying more than $100 in wages in a calendar quarter
d.Only after paying $10,000 in total wages
Explanation
Under EDD rules, an employer must register with the EDD within a short window (generally 15 days) after paying more than $100 in wages to one or more employees in a calendar quarter. Registration is required regardless of whether wages are paid in cash. Paying employees off the books to avoid registration is illegal and exposes the contractor to back taxes and penalties.
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Sen Lin, PrepPass Founder · Verified against California CSLB Contractor License Law & Business Exam · How we review
Reviewed by Abraham Chen — Licensed California General Contractor (CSLB License #1101856 — verify)