Wage plan codes are letter indicators (S,U,J,L,R,A, and P), used by California's Employment Development Department (EDD) to determine whether an employee's total subject wages can be used for state mandated Unemployment and Disability benefit claims, including Paid Family Leave. Employers are required to include a wage plan code for each employee when submitting certain EDD forms electronically, including Form DE 9C, Quarterly Contribution Return and Report of Wages.
Most commonly, an employee’s total subject wages can be used for SDI, UI, and PFML benefit purposes. These employees are categorized using wage plan code "S". With this in mind, OnPay reports wage plan code "S" for all employees when filing Form DE 9C, unless another code is selected in their profile.
How to Determine the Wage Plan Codes for Your Account
The EDD has provided an Information Sheet to help you determine the correct wage plan code for each employee on your account.
Wage plan codes are correlated to the UI, DI, and PIT reporting on each employment payroll tax account. The Employer Account and Wage Plan Code Correlation Table (page 3 of the Information Sheet) is used to determine which wage plan codes are valid, and can be used for the employees on your account.
The Plan Code Descriptions Table (page 4 of the Information Sheet) includes a description of each of the individual plan codes. Review the wage plan codes carefully. Reporting the incorrect wage plan code may cause employee benefits to be delayed or denied.
To report a code other than "S" for any employee(s), update the code in their profile.
If you pay employees who live or work in California, their wage plan code can be entered in the State Withholdings section of their profile. If this field is left blank, OnPay will use code "S" when filing Form DE 9C each quarter with the state. But if you have, for example, employees who are exempt from SIT and SDI, but are still subject to UI, you may need to select code "A". Use the tables on pages 3 and 4 of the EDD Information Sheet to determine the correct wage plan code for each employee.
How to update an employee's wage plan code
In the employee profile, click Tax Withholding.
Scroll down to "State Withholding", and click the menu below "Wage Plan Code".
Select the wage code for this employee based on the Information Sheet provided by the EDD.
Summary of Wage Plan Codes
- S – This employee’s total subject wages can be used for SDI (State Disability Insurance) and UI (Unemployment Insurance) benefits. This is the default selection, as it applies to most employees.
- U – This employee’s total subject wages can be used for VPDI (Voluntary Plan for Disability Insurance) or UI benefit purposes. For VPDI accounts covered by a State Tax-Rated or Reimbursable UI plan.
- J – This employee’s total subject wages can only be used for SDI (State Disability Insurance) benefits. For accounts not covered by a State Tax-Rated or Reimbursable UI plan.
- L – This employee’s total subject wages can only be used for VPDI benefits. For VPDI accounts not covered by a State Tax-Rated or Reimbursable UI plan.
- R – This employee’s total subject wages can only be used for UI benefit purposes, AND they qualify for one of the following DI exclusions when reported on an account subject to UI and SDI or VPDI:
- Sole Stockholders who've filed a Sole Shareholder/Corporate Officer Exclusion Statement and have been approved for a DI exclusion under section 637.1 of the CUIC (California Unemployment Insurance Code).
- Third Party Sick Pay recipients who claim an exclusion under section 931.5 of the CUIC.
- Religious Employees who have a Religious DI exclusion under section 2902 of the CUIC.
- A – This employee’s total subject wages can only be used for UI benefit purposes. For accounts not covered by SDI or VPDI.
- P – The employee wages and/or withholdings are reported under an account that is only subject for PIT withholding purposes.
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