California Tax

For California residents, you specify the employee's status and exemptions.

Deltek Modification Date - 12/14/18

Enter the following field information for residents of California on the Withholding grid on the Payroll tab of the Employees hub:

Field	Description
Status	Enter the marital status claimed by the employee on California Form DE 4. Options are: S: Single, dual income married, or married with multiple employers M: Married H: Head of household
Exemptions	Enter the total number of regular allowances claimed by the employee on Line 1 of California Form DE 4. If the employee did not submit Form DE 4, use the total number of allowances claimed by the employee for federal income tax purposes on Form W-4.
Other Exemptions	Enter the total number of regular allowances for estimated deductions claimed by the employee on California Form DE 4. Each allowance reduces the amount of annual wages subject to California personal income tax by $1,000.00. If the employee did not submit any allowance for estimated deductions on Form DE 4, do not make any entry here.

Supplemental Wages

Companies must tax bonus wages at 10.23%, when no regular pay is included in the pay run.

Automatically Calculated Variables

DPS computes the following variables, based on the exemptions and filing status claimed by the employee

Standard Deduction

The standard deduction is a table-based deduction applied to all employees. The amount of the deduction depends on the number of regular exemptions claimed in the first Exemptions field and the employee’s filing status.

If the status is	Then the maximum is
Single, dual income married or married with multiple employers	$4,401
Married (0-1 exemptions)	$4,401
Married (2 or more exemptions)	$8,802
Unmarried head of household	$8,802

Additional Deductions

Additional deductions are based on the number of additional withholding allowances for estimated deductions entered in the Exemptions-2 field. It is determined by multiplying the number of exemptions-2 by $1,000.

Credit

The credit is based on the number of exemptions entered in the first Exemptions field. The amount of the credit is determined by multiplying the number of exemptions by $129.80.

Low Income Exemption

DPS compares the employee's wages, minus 401(k) Plan and 125/Cafeteria Plan contribution amounts, to an amount in the low income exemption table to determine eligibility for tax withholding. The amounts are based on the employee's marital status and the number of exemptions.

Status	Maximum Annual Amount for Exemption
Single, dual income married or married with multiple employers	$14,573
Married (0-1 exemptions)	$14,573
Married (2 or more exemptions)	$29,146
Unmarried head of household	$29,146

How DPS Calculates Tax

To calculate an employee's California State tax, DPS does the following:

1. Multiplies the employee's gross pay per pay period by the number of pay periods in a year to determine annualized gross wages.
2. Compares the employee’s annual gross wages to the low income exemption table. If they are less than or equal to the low income exemption, no tax is withheld.
3. Subtracts the employee's standard deduction, additional deductions, and annualized 401(k) and 125/Cafeteria plan contributions from the employee's annualized gross wages.
4. Calculates the annual income tax, using Tax Calculation Method 1.
5. Subtracts a credit (if applicable) from the annual income tax to determine the annual net income tax.
6. Divides the net annual income tax by the number of pay periods in a year to determine the amount to be withheld for the pay period.