As of January 1, 2026, every California employer with at least one W-2 employee is legally required to either offer a qualified retirement plan or enroll in CalSavers. The final deadline — December 31, 2025 — applied to businesses with one to four employees, completing a phased rollout that started in 2020. There is no longer a size threshold below which you're exempt.

If you have even a single employee in California and you haven't registered yet, you're already out of compliance and penalties are accruing.

What CalSavers Is

CalSavers is California's state-administered retirement savings program. It's a Roth IRA — contributions come from employee payroll deductions on an after-tax basis, the account belongs to the employee, and it's fully portable when they leave.

For employers, the key facts are:

• No employer fees. The program costs you nothing to facilitate.

• No employer contributions. You cannot contribute to employee accounts even if you want to. CalSavers is employee-funded only.

• No fiduciary responsibility. You're not liable for employees' investment decisions or account performance.

• No admin burden beyond payroll. Your job is to register, upload your employee roster, and remit payroll deductions each pay period.

The default employee contribution rate is 5% of gross pay, deducted automatically. CalSavers has a built-in auto-escalation feature that increases the rate by 1% per year until it reaches 8%, unless the employee changes it. Employees can opt out at any time, change their contribution rate, or adjust their investment choices. Participation is voluntary for employees — not for employers.

Who Is Required to Participate

You must register for CalSavers if all of the following are true:

1. You have at least one California-based W-2 employee (other than yourself as owner)

2. You do not currently offer a qualified retirement plan — 401(k), SEP IRA, SIMPLE IRA, or equivalent

You are exempt if:

• Your business employs only the owner(s), with no W-2 employees

• You already sponsor a qualified retirement plan that covers your California employees

• Your organization is a government entity, religious organization, or tribal organization

If you're exempt, you should still submit an exemption request through the CalSavers employer portal. Without it, CalSavers will keep sending compliance notices.

The 2026 Deadline Landscape

The CalSavers mandate rolled out in phases based on employer size. All deadlines have now passed:

As of January 1, 2026, the mandate is fully in effect. If you missed any of these deadlines and haven't registered, you are currently out of compliance. Register immediately — the penalties grow the longer you wait.

For newly mandated employers: if your business first reported having at least one employee in 2026, your registration or exemption deadline is December 31, 2026. Each year, CalSavers assesses mandate status using EDD payroll filings from the prior year and notifies newly mandated employers in the spring.

Penalties for Non-Compliance

Non-compliance is enforced under California Government Code Section 100033. Penalties are assessed per eligible employee:

• $250 per employee if noncompliance extends 90 days or more after receiving a notice of failure to comply

• Additional $500 per employee if noncompliance continues 180 days or more after the initial notice

• Additional $500 per employee annually for continued noncompliance beyond that

For a 5-person startup, noncompliance past 180 days means $3,750 in fines — before the annual accruals. These add up fast. Registering late is far less costly than ignoring it.

What Employers Are Actually Required to Do

Once you determine you're mandated (not exempt), here's what facilitation looks like in practice:

Register. Go to employer.calsavers.com. You'll need your EIN, your California payroll tax ID from the EDD, and your CalSavers access code (sent by mail/email when you were first notified).

Upload your employee roster. All eligible employees — anyone age 18 or older with California W-2 wages, with no minimum hours or tenure requirements — must be added to the portal. New hires must be added within 30 days of the hire date.

Facilitate the enrollment window. After being added, employees have 30 days to opt out, change their contribution rate, or customize their investment selection. If they do nothing, they're automatically enrolled at the 5% default rate.

Remit payroll deductions. Contributions must be sent to CalSavers within 7 days of each payday. This step can be integrated with most payroll providers.

Maintain the roster on an ongoing. Add new hires within 30 days. Mark departing employees as inactive. If an employee opts out, you don't deduct for them — but you must still maintain the program for other eligible employees.

How to Register: Step-by-Step

Where to go: employer.calsavers.com

Registration takes about 15 minutes. Here's exactly what to do.

What you need before you start:

• Your Federal EIN (Employer Identification Number)

• Your California payroll tax ID — this is the number you use when filing DE9/DE9C reports with the EDD

• Your CalSavers Access Code — a unique code mailed and emailed to you by the program when you were first notified. If you can't find it, request one at employer.calsavers.com

Step 1: Create your employer account

Go to employer.calsavers.com and click Register. Enter your EIN, CA payroll tax ID, and access code. You'll designate one person as the Account Manager — this is whoever will manage the portal day-to-day. You can also add additional administrators (a bookkeeper, payroll provider, or accountant).

Step 2: Upload your employee roster

You have 30 days from registration to upload all eligible employees. Eligible means: age 18 or older, California W-2 wages, any hours, any tenure — part-time and recent hires included. The portal accepts a CSV upload or manual entry.

CalSavers will then contact each employee directly with enrollment information and a 30-day decision window to opt out, adjust their contribution rate, or customize investments. If an employee does nothing, they are automatically enrolled at the 5% default rate.

Step 3: Connect your payroll

Once employees are enrolled, you remit their payroll deductions each pay period. You must send contributions within 7 business days of each payday. Most major payroll providers — Gusto, Rippling, ADP, Paychex — have either full or partial integration with CalSavers. Check with your provider to see if you can automate remittance directly. If not, you can submit manually through the employer portal via bank transfer or check.

Step 4: Maintain the roster on an ongoing basis

• Add new hires within 30 days of their start date

• Mark departing employees as inactive when they leave

• Update contribution rates in the portal when employees request changes

• Even if all your employees opt out, you must keep the program active for any who re-enroll or are hired in the future

If you're exempt (already have a retirement plan):

Don't skip this. Go to the same portal and submit an exemption request instead of registering. You'll need documentation of your existing qualified plan. Without a filed exemption, CalSavers will continue sending compliance notices and may flag your account.

Support: CalSavers has a multilingual client services team reachable at (855) 650-6918, Monday–Friday 8am–8pm PT. They also offer employer webinars and guided registration support for small businesses.

CalSavers vs. a Private Retirement Plan

CalSavers satisfies the mandate, but it's not the only option. Many startups at the point they're hiring their first employees, are also the right size to consider a private plan.

CalSavers (Roth IRA):

• 2026 annual contribution limit: $7,500 ($8,600 if age 50+)

• Employee-only contributions; no employer match allowed

• No employer fees

• Simple to administer

• Lower contribution ceiling than a 401(k)

401(k):

• 2026 annual employee contribution limit: $24,500

• Employer can offer a match (which is a recruiting differentiator)

• Tax-deductible employer contributions

• More administrative overhead and setup cost

• Qualifies as a CalSavers exemption

SEP IRA:

• Employer contributions only; up to 25% of employee compensation

• Simple to set up, common among smaller firms

• Qualifies as a CalSavers exemption

If you're already running payroll through Rippling, Gusto, or a similar provider, many of them offer integrated 401(k) products that can satisfy the mandate with minimal friction. At the early stage, the question is usually whether the recruiting value of offering a 401(k) — especially with a modest match — justifies the setup over defaulting to CalSavers.

Action Steps

If you haven't registered yet: Register immediately at employer.calsavers.com. Late registration limits penalty exposure. If you believe you're exempt, submit an exemption request through the same portal.

If you already offer a retirement plan: Submit an exemption request confirming your qualified plan. You'll stop receiving compliance notices and formally document your exempt status.

If you're a new employer in 2026: Your deadline is December 31, 2026. You should receive registration materials from CalSavers in spring 2026. Register or claim your exemption before the December deadline.

California has made retirement access a baseline employer obligation. CalSavers makes compliance straightforward — no fees, no contributions, minimal administration. The only real cost of non-compliance is the penalties. Register, upload your roster, connect it to payroll, and move on.

Anelya Grant is the founder of AG Accounting Inc., an accounting firm serving tech startups and healthcare organizations. She is also co-founder of JustPaid.ai, an AI-powered billing and contract-to-cash platform for growing companies.