CSLB Law & Business ExamEmployment RequirementsHard
Which statement correctly describes California's Employment Training Tax (ETT)?
- AIt is paid solely by the employer at a rate of 3.4% and applies only to new employers
- BIt funds the state's workers' compensation program
- CIt is paid solely by the employer at a rate of 0.1% on the first $7,000 of wages per employee
- DIt is withheld from the employee's wages each pay period
Show answer & explanationAnswer & explanation
Correct answer: C. It is paid solely by the employer at a rate of 0.1% on the first $7,000 of wages per employee
The Employment Training Tax is an employer-paid tax (not withheld from employees) set at 0.1% of the first $7,000 in wages paid to each employee annually, and it funds job training programs administered through EDD.
Why the other options are wrong
- A. 3.4% is a typical new employer SUI rate, not the ETT rate.
- B. ETT funds job training benefits, not workers' compensation.
- D. ETT is not deducted from employee paychecks.
Employment Training Tax (ETT)
A California payroll tax paid entirely by the employer at 0.1% on the first $7,000 of each employee's wages, funding job training programs.
- Employer-paid only, never withheld from employees
- Rate: 0.1% on first $7,000 of wages per employee
- Reported alongside SUI and SDI on EDD payroll tax returns
Memory trick: ETT: Employer Trains Talent, and Employer pays the Tab.