The payroll money count is singled out for deductions. Money taken out is a percentage of some types of payments, not all.
Payroll wages make up only some of the typical paycheck.
Regular wages paid in cash or in a check count as wages in California. The cash value of payments not made in cash, such as meals and lodging, also are wages. Workers can earn wages by the hour, the day, or the month or in a set salary.
Also on the wages list are the payments an employer gives a worker in addition to the regular payments. Bonuses and sick pay are two typical additions to a paycheck. Overtime pay for those hours put in after closing time adds to the total.
On The Taxable Payroll
Employers calculate the standard payroll deductions using only wages subject to tax. Not all payments and benefits given to the worker. The California government uses taxable payroll wages to count out its dollars for unemployment insurance, disability insurance and paid family leave, and income tax.
Regular wages paid by the hour or in base salary are on the payroll.
Unemployment and Disability Insurance Deductions
California takes a percentage of most wages to pay for the common insurance funds that cover unemployment and disability. Some smaller amounts are set aside and kept out of the deduction calculation.
But not all. Bonuses and commissions count on the payroll. So do the cash values of meals and lodging. A percentage gets taken out of tips above $20 in a month.
The most typical additional payments are on the taxable payroll. Pay for vacation time, sick leave, and holidays. Unless not paid until after employment ends.
Health plans and gifts given for good will are not on the taxable payroll. Neither is a list of fringe benefits:
- bus passes
- athletic facilities
- free coffee
Educational assistance stays untouched by the California government. Neither are reimbursements for business expenses and long term travel expenses.
Personal Income Tax Deduction
The amount withheld from a paycheck for personal income tax comes out of a different total than the insurance funds. Again, most the full paycheck counts. But, meals and lodging an employer makes standard for its workers and gives to workers on its premises for convenience are kept out of the total used for an income tax deduction, not the total used for insurance deductions.
On the other hand, long term travel expenses count.
The Work Pay Figure
Workers hold on to most their pay. The government's hidden hand reaches in to take a percentage of the main pay plus many typical small payments.
California Employment Development Department, California Employer's Guide 2011 (January 2011).