State payroll costs: 2 California employer contributions

• Add Unemployment Insurance (UI) and Employment Training Tax (ETT) to technician labor cost as employer contributions, according to Employment Development Department .
• Keep State Disability Insurance (SDI) and Personal Income Tax (PIT) apart from employer costs, because they are withheld from employees’ wages.
• Use the specific UI rate provided in your tax notice rather than estimating it.
• For Washington State Paid Family and Medical Leave, the minimum employer share is Total premium x .293 according to Washington State Paid Family and Medical Leave .
• New York Paid Family Leave is funded by employees through payroll deductions, so record it as a withholding.

When you build a cost sheet for a technician’s hourly rate, the first line item to separate is the portion of state payroll taxes that falls on your business rather than the worker. According to Employment Development Department , Unemployment Insurance (UI) and Employment Training Tax (ETT) are employer contributions. This distinction matters because these two programs do not reduce the employee’s take-home pay; they increase the total cost of employing that technician beyond the stated wage.

For repair and service businesses operating in California, this means your labor cost calculation must include both UI and ETT as additive expenses. The source explicitly categorizes these two items under employer responsibilities, distinguishing them from other payroll deductions that might be withheld from an employee’s paycheck. You cannot treat these as shared or employee-funded costs in your pricing model. If you price a job based solely on the technician’s gross wage without adding these employer-side contributions, your margin calculations will be incomplete.

The statement that UI and ETT are employer contributions applies specifically to the California context described by the Employment Development Department. Other states may have different structures, different program names, or different funding splits between employers and employees. Therefore, use this specific identification only when calculating costs for California-based operations.

When building a technician labor cost sheet, distinguish between taxes the employer pays and amounts withheld from the employee's paycheck. The Employment Development Department identifies State Disability Insurance (SDI) and Personal Income Tax (PIT) as programs withheld from employees’ wages according to Employment Development Department . These deductions reduce the net pay received by the technician but do not represent additional costs funded by the business owner. Conversely, Unemployment Insurance (UI) is an employer contribution. Most employers are tax-rated employers and pay UI taxes based on their assigned UI rate according to Employment Development Department .

While these two categories differ in who funds them, wages are generally subject to all four payroll taxes according to Employment Development Department . Therefore, when calculating the total burden of technician hours, you must account for both the employer-funded UI and the employee-withheld SDI and PIT. Keeping these distinct prevents conflating take-home pay calculations with true operating expenses. If you mix up which side of the cost sheet each item belongs to, your hourly labor rate will be inaccurate.

Label each line item on your cost sheet clearly as either "employer contribution" or "employee withholding." This distinction matters because only the employer contributions increase your direct labor cost, while withholdings pass through to the state without affecting your profit margin directly. For broader context on how these inputs affect final pricing, see Repair labor tax rules in 4 states before pricing .

Washington State's Paid Family and Medical Leave program defines the minimum employer contribution through a specific formula. According to Washington State Paid Family and Medical Leave , the calculation is Total premium x .293 = minimum employer share. This figure represents the baseline cost an employer must cover before considering any voluntary adjustments or exemptions based on company size. The rule applies specifically to the state's paid leave funding structure, requiring employers to calculate their portion against the total premium rate established for the period.

The program allows flexibility in how the employee share is handled. According to Washington State Paid Family and Medical Leave , you can choose to withhold the entire 70.7% from your employee’s paycheck, or you can cover all or some of the premium on your employee’s behalf. This option lets an employer decide whether to absorb part or all of the employee's financial responsibility for the benefit. When pricing technician labor, this choice directly affects the net wage deduction and the gross payroll expense recorded on your cost sheets.

A specific exemption exists for smaller operations classified by the state agency. According to Washington State Paid Family and Medical Leave , businesses classified by the Employment Security Department as having fewer than 50 employees are not required to pay the employer portion of the premium. If your repair shop falls under this headcount classification, the mandatory employer contribution drops to zero, altering the fixed overhead associated with each technician hour. You should verify your current classification status with the Employment Security Department to confirm whether this exemption applies to your payroll structure.

Record your specific scenario and the corresponding premium allocation on your labor cost sheet to maintain accurate job costing.

When costing technician labor, verify the specific time period for each payroll input. Rates and caps change annually or by fiscal year, so using a figure from the wrong period distorts your labor cost sheet. The following table summarizes the stated periods and specific rules for New Jersey and New York programs.

For fiscal year 2026-2027, a downloadable employer rate notice is available through Employer Access, according to New Jersey Department of Labor and Workforce Development . This notice provides the specific rate for your business rather than a universal figure. A base week is any calendar week (Sunday through Saturday) in the reporting quarter during which the employee earned in employment remuneration equal to or more than 20 times the state hourly minimum wage of the prior year ($310 in 2026 and $319 in 2027), according to New Jersey Department of Labor and Workforce Development . For related wage-cap checks, see Four unemployment wage caps to check before labor rates .

In contrast, New York Paid Family Leave is insurance that is funded by employees through payroll deductions, according to New York State Paid Family Leave . For 2025, employees contribute 0.388% of their gross wages each pay period, with a maximum annual contribution of $354.53, according to New York State Paid Family Leave . Because these figures are explicitly labeled for 2025, do not apply them to 2026 calculations without verification. Paid Family Leave deductions and benefits change on January 1 each year, based on the SAWW reported on March 31 of the previous year, according to New York State Paid Family Leave . Check the agency’s page for updated 2026 figures before finalizing your technician labor costs for the new year.

Record the specific fiscal year or calendar year next to each rate on your cost sheet to prevent mixing expired figures with current ones. For a related checklist, see Payroll record retention: 5 clocks to check before rates .

Assume a technician earns $200 in gross wages for a 10-hour job. Add the employer-paid UI and ETT to the job cost as separate lines. SDI and PIT are withheld from the same $200, so they reduce take-home pay but do not add to the job cost.

Use the table below to match each program’s funding source and period before entering it on a technician cost sheet. The rows distinguish employer contributions from employee withholdings based on each agency’s statement.

The California rows identify Unemployment Insurance and Employment Training Tax as employer contributions, while State Disability Insurance and Personal Income Tax are withheld from employees’ wages according to Employment Development Department . The Washington row specifies the minimum employer share calculation without providing the total premium rate itself according to Washington State Paid Family and Medical Leave . The New York row confirms that the insurance is funded by employees through payroll deductions according to New York State Paid Family Leave . The New Jersey row defines the assignment period as July 1st to June 30 and notes the use of Tax Table C for 2026-2027 according to New Jersey Department of Labor and Workforce Development . Record the specific condition listed in the final column beside each program on your cost sheet to maintain accurate period tracking.

Label the applicable programs on your technician labor cost sheet as employer contribution or employee withholding. Record the period and any employer election beside each entry. For New Jersey, note that the agency is using Tax Table C for 2026-2027 according to New Jersey Department of Labor and Workforce Development . Do not apply the New Jersey table to other states or periods without verifying their specific rates.

Related guides: Texas labor costs: 5 figures for technician sheets · Four technician status mistakes before labor rates .

Which state payroll costs are employer contributions?

Unemployment Insurance (UI) and Employment Training Tax (ETT) are identified as employer contributions by the California agency. These two specific programs fall under the employer’s funding responsibility rather than employee withholding, according to Employment Development Department . When building your labor cost sheet, label these entries distinctly from any wage deductions taken from the technician’s paycheck.

Does the Washington employer premium share apply to my business with fewer than fifty employees?

Businesses classified by the Employment Security Department as having fewer than 50 employees are not required to pay the employer portion of the premium, according to Washington State Paid Family and Medical Leave . If your firm falls into this classification, the standard minimum employer share calculation does not apply to you. Verify your current employee count against the department's classification criteria before adding this cost to your pricing model.

Can a Washington employer cover the employee premium share?

Yes, employers can choose to cover all or some of the premium on their employee’s behalf, according to Washington State Paid Family and Medical Leave . Alternatively, you can withhold the entire 70.7% from the employee’s paycheck. This option allows you to adjust how much of the total premium burden lands on the technician or on the company when setting up your payroll structure.

When do New Jersey contribution rate assignments run?

Ensure your cost sheets reflect the correct fiscal year assignment for the dates you are billing.

What employee contribution figures does New York publish for 2025?

These figures represent the employee-funded portion of the program for that specific calendar year. Do not use these numbers for 2026 projections without checking for updated rates, as these figures are labeled for 2025 only.