Electronic Funds Transfer (EFT)
Electronic Funds Transfer (EFT) is an electronic method for making payments to the Employment Development Department (EDD). There are two methods for making EFT payments:
- Automated Clearing House (ACH) Debit: Initiate a payment by authorizing the State of California to electronically debit your bank account.
- Payment transactions must be completed before 3 p.m., Pacific Time for the funds to settle on the next business day.
- There is no cost to use this method.
- Automated Clearing House (ACH) Credit: Initiate a payment by instructing your bank to debit your bank account and transfer those funds to the state’s bank account.
- Contact your bank to determine when you should originate your payment so that it will settle into the state’s bank account on time.
- Check with your bank for any charges and/or fees.
California law currently requires employers who meet certain criteria to submit all State Disability Insurance (SDI) and Personal Income Tax (PIT) deposits by EFT. Important changes have been made to this requirement beginning January 1, 2017, see “New E-file and E-pay Mandate” below for more information.
Effective July 1, 2016 the Employment Development Department’s (EDD) depository bank for the Electronic Funds Transfer (EFT) program will change to Union Bank with a new State Data Collector, First Data Government Solutions. The change will impact both Automated Clearing House (ACH) credit and ACH debit filers for Payroll Tax Deposit (DE 88) payments as stated below. This does not impact e-Services for Business customers. This does not impact e-Services for Business customers.
ACH Credit Filers
ACH credit payments must contain the EDD’s new bank account number and routing transit number.
To avoid any returned payment transactions and possible late payment penalty and interest, you must provide your bank with the EDD’s new bank account information. You will need to give sufficient notice, to ensure timely settlement of your ACH credit payments, during the conversion period.
Important: If you are using a bank program to make your payments to EDD, check with your bank to ensure that they are using your valid eight-digit EDD employer payroll tax account number to submit your payments and NOT your Federal Employer Identification Number.
ACH Debit Filers
Although the overall process for making ACH debit payments will remain the same, be sure to make a note of the following:
- State Data Collector’s Website: There will be a new look to the State Data Collector’s website. Registered users using the current vendor’s system are required to create a new profile on the new vendor system (www.govone.com/PAYCAL) with their EDD employer payroll tax account number and current security code on or after July 1, 2016.
Note: If you pay by phone, your payment process remains the same. Continue to use 1-800-554-7500 to pay.
- One-Time Payment through First Data: If you are not registered in the Statewide EFT program or need to make an online payment right away, you may submit your electronic payment through First Data’s website by using the One-Time Pay option. To submit your payment, visit www.govone.com/PAYCAL.
- Warehousing Payments: Warehousing your ACH debit payment with a settlement date of July 5, 2016, or after will not be allowed. Once the transition to Union Bank is made, you may warehouse your payments as usual.
- Fedwire Payments: Fedwire payments are also impacted by the bank change. Contact the e-Pay Group at 916-654-9130 before initiating the Fedwire request to ensure the banking information is correct.
Important: You must have a valid EDD employer payroll tax account number before registering for the ACH debit method. You may register online for a payroll tax account number by using e-Services for Business.For more information on this change, visit Bank Change for Electronic Funds Transfer Filers or contact our Taxpayer Assistance Center at 1-888-745-3886.
Each year your account is reviewed to determine if you meet the requirement for mandatory EFT filing.
- If the average (per payment) deposit for SDI and PIT is $20,000 or more for the prior State Fiscal Year (July 1 through June 30), you are required to submit all SDI and PIT deposits by EFT during the next calendar year, regardless of the dollar amount.
- If you meet the requirement above, you will be notified by October 31 prior to the year of mandatory EFT participation.
- You will be subject to a 15 percent (10 percent for periods prior to 3rd quarter 2014) noncompliance penalty if a SDI/PIT deposit is made by any other means (e.g., check, cash, credit card, etc.).
- Unemployment Insurance (UI) and Employment Training Tax (ETT) payments are not subject to the noncompliance penalty.
Note: If you meet the requirement for mandatory EFT filing of your payroll taxes with the EDD, you must also remit all child support wage withholding payments by EFT to the Department of Child Support Services’ State Disbursement Unit.
A new state law requires all employers to electronically submit employment tax returns, wage reports, and payroll tax deposits to the EDD.
- Beginning January 1, 2017, employers with 10 or more employees will be required to electronically file and pay.
- Beginning January 1, 2018, all remaining employers will be required to electronically file and pay.
- For more information, visit E-file and E-pay Mandate for Employers.
Any employer required under existing law to electronically submit wage reports and/or EFT to the EDD will remain subject to those requirements.
e-Services for Business is your fast, easy, and secure way to manage your employer payroll tax accounts online.
- The EDD’s EFT program (ACH Debit Method).
- Simple one time online enrollment. Enroll now!
- Store and update your bank account information online.
- View your Payroll Tax Rates.
- Make Payroll Tax Deposit (DE 88) and all other account payments.
- Submit bulk payments.
- And more…
The State Data Collector is a third party vendor contracted by the State of California to collect EFT payments on behalf of the EDD and other state agencies. Payments made through the State Data Collector are for Payroll Tax Deposit (DE 88) only.
The following payment options are available:
- Web Payer: Initiate your DE 88 payment using a username and password on the State Data Collector’s secure website. Online enrollment is required to use this option.
- Phone Payer: Initiate your DE 88 payment using a security code by calling the State Data Collector’s at 1-800-554-7500. Online enrollment is required to use this option.
- One-Time Pay: Initiate your DE 88 payment on the State Data Collector’s website. No enrollment necessary.
- Bulk Filer Solution: Payroll agents or payroll services who initiate DE 88 payments on behalf of multiple taxpayers must register and create their own unique Bulk Filer ID.
- Each of their clients must:
- Have an active employer payroll tax account number and
- Be enrolled in the Statewide EFT Program before a payment will be accepted.
To enroll in the State Data Collector Program, submit an Electronic Funds Transfer (EFT) State Data Collector Program – Vendor (Third Party) New Enrollment Request Form (DE 26) by fax to 916-654-7441 or mail to the address below:
Employment Development Department
e-Pay Group, MIC 15-A
P.O. Box 826880
Sacramento, CA 94280-0001
The State Data Collector, First Data, is not under the control of the EDD, and the EDD is not responsible for the contents or links contained in their website. The EDD recommends that you review the vendor’s security and confidentiality statements.
The ACH Credit method allows you to make a payment by instructing your bank to debit your bank account and transfer those funds to the state’s bank account. You do not have to complete an Electronic Funds Transfer (EFT) State Data Collector Program – Vendor (Third Party) New Enrollment Request Form (DE 26) to use this method.
In order to report your DE 88 payment correctly, your bank must originate your payment using the approved National Automated Clearing House Association (NACHA) CCD+TXP Addenda record format. You need to provide your bank with an Information for Your Bank (DE 532). The DE 532 provides your bank with specific instructions on how to transmit your DE 88 payment to the EDD.
To ensure your payment is applied correctly to your employer payroll tax account, be sure to provide the following payment details to your bank:
- Employer payroll tax account number.
- Eight (8) digits, no spaces or hyphens.
- If you do not have an employer payroll tax account number, visit e-Services for Business to register.
- Deposit schedule
- Next-Day, Semiweekly, Monthly, or Quarterly.
- Payroll Date
- For SDI/PIT deposits, this is the date you paid your employees.
- For UI/ETT deposits, this is the quarter end date (03/31/YY, 06/30/YY, 09/30/YY, or 12/31/YY).
- For Penalty and Interest deposits, this is the quarter end date.
- Deposit amount for each tax type and the total, for example:
- SDI amount, PIT amount, and total.
- UI amount, ETT amount, and total.
- Penalty amount, Interest amount, and total.
The timeliness of your EFT payment is determined by the settlement date (the date funds are credited to the State’s bank account).
ACH Debit payments that are completed before 3 p.m., Pacific Time, can settle the next business day.
For ACH Credit payments, check with your bank to ensure a timely settlement date.
|If Your Federal Deposit Schedule/Requirement is:||PIT and SDI Must Settle in the State’s Bank Account|
|Next-Day||On or before the third business day following the payroll date.|
|Semi-weekly, Monthly, or Quarterly||On or before the next business day following the due date.|
If the last timely settlement date falls on a Saturday, Sunday, or legal holiday, the settlement date is extended to the next business day. Refer to the Legal Holidays page for a schedule of the current tax year or call the EDD’s Taxpayer Assistance Center at 1-855-866-2657. For more information, visit 2016 Calendar – Payroll Tax Due Dates.
For more information, visit the FAQ - Electronic Funds Transfer or call the e-Pay Group at 916-654-9130. The Electronic Funds Transfer Program Information Guide (DE 27) also provides detailed information on the EDD EFT Program.