CALIFORNIA PAYROLL ADMINISTRATOR
CERTIFICATION PRACTICE EXAM WITH
ACTUAL QUESTIONS AND VERIFIED
ANSWERS, PLUS EXPLAINED
RATIONALES/EXPERT VERIFIED FOR
GUARANTEED 100% PASS 2026/LATEST
UPDATE/INSTANT DOWNLOAD PDF
1. California State Payroll Tax Registration
A California employer begins operations on March 3, 2026, and hires
three employees. During the first quarter, the employer pays $8,500 in
total wages. The company has not yet registered for a California payroll
tax account because management believes registration is unnecessary
until the business has a larger workforce. Which statement is most
accurate?
A. The employer may wait until it pays $50,000 in wages before
registering.
B. The employer must register only if it becomes subject to California
unemployment insurance.
C. The employer generally must register with the EDD within 15 days
after becoming an employer that pays more than $100 in wages in a
calendar quarter.
D. Registration is optional if a third-party payroll service files all payroll
reports.
Answer: C. The employer generally must register with the EDD
within 15 days after becoming an employer that pays more than
$100 in wages in a calendar quarter.
Rationale: California employers meeting the statutory wage threshold
must establish the appropriate EDD payroll tax account and comply
1
,with withholding, reporting, and deposit obligations. Using a payroll
service does not eliminate the employer's underlying legal
responsibility for accurate registration and payroll compliance.
2. 2026 California Minimum Wage
A California employer pays all nonexempt employees $16.25 per hour
beginning January 1, 2026. The employer argues that the federal
minimum wage is lower and therefore the rate is lawful. Which
conclusion is correct?
A. The rate is lawful because employers may use the higher of federal or
state minimum wage only when the difference exceeds $1.00.
B. The rate is unlawful because California's statewide minimum wage
effective January 1, 2026, is $16.90 per hour, subject to applicable local
or industry-specific higher rates.
C. The rate is lawful if employees sign a written agreement accepting it.
D. The rate is lawful for employers with fewer than 50 employees.
Answer: B. The rate is unlawful because California's statewide
minimum wage effective January 1, 2026, is $16.90 per hour, subject
to applicable local or industry-specific higher rates.
Rationale: California's statewide minimum wage is $16.90 per hour
effective January 1, 2026. A local ordinance or industry-specific law
may require an even higher minimum wage. Employee consent cannot
waive a statutory minimum wage requirement.
3. California UI Taxable Wage Limit
An employee earns $18,000 in wages during 2026. The employer's
California UI contribution rate is 3.4%. Ignoring any special
circumstances and assuming the employee has no prior wages from
2
,another employer, which amount is subject to the employer's California
UI tax?
A. $18,000
B. $11,000
C. $7,000
D. $3,400
Answer: C. $7,000.
Rationale: California UI contributions generally apply to the first
$7,000 of wages paid to each employee during the calendar year. Once
the employee reaches the applicable annual UI taxable wage limit,
additional wages are not subject to California UI contributions for that
employee for that year.
4. California ETT Calculation
A California employer has a positive UI reserve account balance and
therefore has a 2026 Employment Training Tax rate of 0.1%. An
employee earns $9,000 during the year. What is the maximum ETT
amount attributable to that employee for 2026?
A. $9.00
B. $7.00
C. $90.00
D. $0 because ETT is always employee-paid
Answer: B. $7.00.
Rationale: The 2026 ETT rate is 0.1%, or 0.001, and the ETT taxable
wage limit is $7,000 per employee. The calculation is $7,000 × 0.001 =
$7.00. ETT is an employer payroll tax, not an employee withholding.
5. California SDI Withholding in 2026
3
, An employee earns $250,000 in California wages during 2026. The
payroll administrator believes California SDI should stop once the
employee reaches the historical annual wage ceiling. Which treatment is
correct?
A. SDI stops after $7,000 of wages.
B. SDI stops after $168,600 of wages.
C. SDI applies only to the first $200,000 of wages.
D. All wages are subject to California SDI contributions at the
applicable 2026 rate.
Answer: D. All wages are subject to California SDI contributions at
the applicable 2026 rate.
Rationale: Effective January 1, 2024, California removed the SDI
taxable wage limit and maximum withholding limitation. For 2026, all
wages subject to SDI contributions are generally included in the
calculation.
6. 2026 California SDI Rate
A payroll administrator is processing a California payroll dated June 30,
2026. The employee has $10,000 of SDI-taxable wages for the pay
period. Assuming the standard 2026 California SDI withholding rate
applies, what is the employee's SDI withholding?
A. $130.00
B. $100.00
C. $65.00
D. $1,300.00
Answer: A. $130.00.
Rationale: California's 2026 SDI withholding rate is 1.3%. The
calculation is $10,000 × 0.013 = $130.00. The calculation is not limited
by the former annual SDI wage ceiling.
4
CERTIFICATION PRACTICE EXAM WITH
ACTUAL QUESTIONS AND VERIFIED
ANSWERS, PLUS EXPLAINED
RATIONALES/EXPERT VERIFIED FOR
GUARANTEED 100% PASS 2026/LATEST
UPDATE/INSTANT DOWNLOAD PDF
1. California State Payroll Tax Registration
A California employer begins operations on March 3, 2026, and hires
three employees. During the first quarter, the employer pays $8,500 in
total wages. The company has not yet registered for a California payroll
tax account because management believes registration is unnecessary
until the business has a larger workforce. Which statement is most
accurate?
A. The employer may wait until it pays $50,000 in wages before
registering.
B. The employer must register only if it becomes subject to California
unemployment insurance.
C. The employer generally must register with the EDD within 15 days
after becoming an employer that pays more than $100 in wages in a
calendar quarter.
D. Registration is optional if a third-party payroll service files all payroll
reports.
Answer: C. The employer generally must register with the EDD
within 15 days after becoming an employer that pays more than
$100 in wages in a calendar quarter.
Rationale: California employers meeting the statutory wage threshold
must establish the appropriate EDD payroll tax account and comply
1
,with withholding, reporting, and deposit obligations. Using a payroll
service does not eliminate the employer's underlying legal
responsibility for accurate registration and payroll compliance.
2. 2026 California Minimum Wage
A California employer pays all nonexempt employees $16.25 per hour
beginning January 1, 2026. The employer argues that the federal
minimum wage is lower and therefore the rate is lawful. Which
conclusion is correct?
A. The rate is lawful because employers may use the higher of federal or
state minimum wage only when the difference exceeds $1.00.
B. The rate is unlawful because California's statewide minimum wage
effective January 1, 2026, is $16.90 per hour, subject to applicable local
or industry-specific higher rates.
C. The rate is lawful if employees sign a written agreement accepting it.
D. The rate is lawful for employers with fewer than 50 employees.
Answer: B. The rate is unlawful because California's statewide
minimum wage effective January 1, 2026, is $16.90 per hour, subject
to applicable local or industry-specific higher rates.
Rationale: California's statewide minimum wage is $16.90 per hour
effective January 1, 2026. A local ordinance or industry-specific law
may require an even higher minimum wage. Employee consent cannot
waive a statutory minimum wage requirement.
3. California UI Taxable Wage Limit
An employee earns $18,000 in wages during 2026. The employer's
California UI contribution rate is 3.4%. Ignoring any special
circumstances and assuming the employee has no prior wages from
2
,another employer, which amount is subject to the employer's California
UI tax?
A. $18,000
B. $11,000
C. $7,000
D. $3,400
Answer: C. $7,000.
Rationale: California UI contributions generally apply to the first
$7,000 of wages paid to each employee during the calendar year. Once
the employee reaches the applicable annual UI taxable wage limit,
additional wages are not subject to California UI contributions for that
employee for that year.
4. California ETT Calculation
A California employer has a positive UI reserve account balance and
therefore has a 2026 Employment Training Tax rate of 0.1%. An
employee earns $9,000 during the year. What is the maximum ETT
amount attributable to that employee for 2026?
A. $9.00
B. $7.00
C. $90.00
D. $0 because ETT is always employee-paid
Answer: B. $7.00.
Rationale: The 2026 ETT rate is 0.1%, or 0.001, and the ETT taxable
wage limit is $7,000 per employee. The calculation is $7,000 × 0.001 =
$7.00. ETT is an employer payroll tax, not an employee withholding.
5. California SDI Withholding in 2026
3
, An employee earns $250,000 in California wages during 2026. The
payroll administrator believes California SDI should stop once the
employee reaches the historical annual wage ceiling. Which treatment is
correct?
A. SDI stops after $7,000 of wages.
B. SDI stops after $168,600 of wages.
C. SDI applies only to the first $200,000 of wages.
D. All wages are subject to California SDI contributions at the
applicable 2026 rate.
Answer: D. All wages are subject to California SDI contributions at
the applicable 2026 rate.
Rationale: Effective January 1, 2024, California removed the SDI
taxable wage limit and maximum withholding limitation. For 2026, all
wages subject to SDI contributions are generally included in the
calculation.
6. 2026 California SDI Rate
A payroll administrator is processing a California payroll dated June 30,
2026. The employee has $10,000 of SDI-taxable wages for the pay
period. Assuming the standard 2026 California SDI withholding rate
applies, what is the employee's SDI withholding?
A. $130.00
B. $100.00
C. $65.00
D. $1,300.00
Answer: A. $130.00.
Rationale: California's 2026 SDI withholding rate is 1.3%. The
calculation is $10,000 × 0.013 = $130.00. The calculation is not limited
by the former annual SDI wage ceiling.
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