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CalSavers Retirement Program

Overview

CalSavers is California's state-facilitated retirement savings program for employees. Beginning July 2026, all eligible employers can register. Employers with five or more employees must either provide a retirement plan or register for CalSavers and facilitate employee contributions to Individual Retirement Accounts.

Program Requirements

Employers must register with CalSavers and provide:

  • Banking information
  • Pay cycle details
  • Employee census information

Resources

Setting Up the Deduction

Employer deduction setup

  1. Go to Employer > Deductions Setup.
  2. Select any available deduction field (Ded1-Ded19).
  3. Enter the following settings:
  • Description: CalSavers
  • Taxability: Leave all boxes unchecked (this is an after-tax deduction)
  • W-2 Column: Leave blank — CalSavers Roth IRA contributions are after-tax and are NOT reported on the W-2 (no Box 12 code applies).
  • Check if used: Check this box

CalSavers contributions are after-tax Roth IRA payroll deductions and are not reported on the W-2. Do not assign a Box 12 code, and do not check the "Retirement plan" box (Box 13) for a CalSavers-only participant. (Payroll-deduction IRAs are excluded from W-2 retirement-plan reporting per the IRS General Instructions for Forms W-2 and W-3.)

Note: There is no employer match allowed with the CalSavers program.

Employee setup

After the employer registers for CalSavers and submits their employee census, each employee receives a letter from California EDD with three options:

  1. Select their contribution percentage
  2. Do nothing (automatically enrolled at 5% contribution rate)
  3. Opt out of the program

Currently, only percentage rate contributions are accepted. Flat amount contributions will be available at a later date.

Configuring employee deductions

  1. Go to Employees > Add or Change > select the employee.
  2. Click the Deduct/Reim tab.
  3. Under Type, enter P (percentage).
  4. Enter the employee's contribution percentage.
  5. Enter the annual limit based on the employee's age.

Contribution Rates and Limits

Default rate

If an employee doesn't choose their own rate, the standard savings rate is 5% of gross pay, deducted on an after-tax basis.

Custom rates

Employees can adjust their rate at any time to as little as 1% or as much as they want, within IRS limits.

2026 contribution limits

Because CalSavers accounts are Roth IRAs, contributions must be within federal limits:

  • Under age 50: $7,000 per year
  • Age 50 or older: $8,000 per year

Income limits

Contribution limits are based on Modified Adjusted Gross Income (MAGI). Refer to IRS Publication 590-A, Chapter 2 for the worksheet to calculate MAGI and determine maximum contribution amounts.

Payment Setup

Configuring agency payments

When entering the CalSavers deduction, the system asks if you want this paid to an agency. Click Yes.

  1. Fill in the agency information for CalSavers.
  2. Enter the program address for contributions.
  3. This information only needs to be entered once.

Adding additional employees

When adding CalSavers for additional employees:

  1. Click Yes to make payable to agency.
  2. Click Add on the next popup.
  3. Click Master List at the bottom of the agency screen.
  4. Scroll down to find the CalSavers entry.

Using the Master List ensures all CalSavers deductions are grouped together on one check rather than printing multiple checks.

Exporting CalSavers Files

Export employee information

  1. Go to Client Functions > CalSavers.
  2. Click Export CalSavers Employees.
  3. The program creates an export file and displays it.
  4. If there are errors, the system asks if you want to email the file to the employer.

Export contribution information

  1. Click Export CalSavers Contribution.
  2. The program creates an export file and displays it.
  3. The system asks if you wish to upload it to the state.

Agency Report

An agency report prints with each check, showing the payroll deductions for the pay period. This report matches the CalSavers contribution file.

Important Notes

  • CalSavers is a Roth IRA (after-tax deduction)
  • No employer matching contributions
  • Employees must actively opt out or they are automatically enrolled
  • Files must be submitted to CalSavers according to your pay cycle
  • Keep records of all employee elections and opt-outs

Related Topics

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