Every California employer with one or more employees must either register with CalSavers or sponsor a qualified retirement plan and certify an exemption. Missing it costs $250 per eligible employee after 90 days, rising to $750 after 180. Most owners we speak to are surprised to learn they often cannot contribute to CalSavers themselves.
The deadline ladder
The thresholds phased in by employer size. All of them have now passed, which means the question is no longer when but whether you have acted.
| Employer size | Deadline | Status in 2026 |
|---|---|---|
| 100+ employees | 30 September 2020 | Passed |
| 50+ employees | 30 June 2021 | Passed |
| 5+ employees | 30 June 2022 | Passed |
| 1–4 employees | 31 December 2025 | Passed |
| Newly mandated | End of the year you are notified | Rolling, annual |
How the state knows your headcount. Eligibility is set from the average across your four DE9/DE9C filings from the prior year. You are not flying under a radar — the number is already on file with EDD. The full deadline guide →
Your two options
The law gives you a choice, and the second one is where most of the value sits.
Register with CalSavers
A state-run Roth IRA. No employer cost, no employer contributions permitted, and employees are auto-enrolled unless they opt out. Statewide, about 35% do opt out.
Sponsor a qualified plan
A 401(k), SEP, SIMPLE or pooled employer plan — then certify your exemption. Higher limits, you can match, and it generates federal tax credits.
Why owners often can't use the plan they're forced to run
This is the single most overlooked fact about CalSavers, and it catches profitable owners every time. CalSavers is a Roth IRA. Roth IRAs have income limits. An owner earning above roughly $168,000 filing single, or $252,000 filing jointly, cannot contribute at all — while still being required to administer the program for their staff.
A 401(k) has no such restriction — the owner defers the full $24,500 (2026 limit), plus $8,000 catch-up at 50, up to $35,750 total at ages 60–63. The owner income limits, in detail → or see the full comparison →
Penalties, in real dollars
Under Government Code § 100033(b): $250 per eligible employee at 90 days past notice, an additional $500 per employee at 180 days — a $750 first-cycle maximum — then $500 per employee annually until you comply. A 12-person business that does nothing faces up to $9,000 in the first cycle. The penalty math, worked through →
If a penalty notice is already in your mailbox, timing matters more than anything else on this page: there is a 90-day appeal window with the Franchise Tax Board that closes permanently at the final notice. Read the penalty-notice walkthrough first →
The tax credits CalSavers can't give you
A new qualified plan can generate three federal credits — the §45E startup credit (100% of costs for employers with 50 or fewer employees, capped by a formula most pages misstate), the §45T auto-enrollment credit ($500 a year for three years), and an employer contribution credit of up to $1,000 per employee. CalSavers generates none of them. How the credits actually work → or estimate yours in a minute →
Los Angeles & Orange County
Our office is in Norwalk and the mandate's local arithmetic is stark: Los Angeles County has 613,057 private establishments, 81% of them with fewer than five employees — exactly the group whose deadline passed on 31 December 2025. Orange County adds another 160,810.
Common questions
Do I have to register if all my employees decline?
Yes. The obligation is to provide access, not to achieve participation. You register or you certify an exemption; what employees then choose is up to them. Statewide, about 35% opt out.
I already offer a 401(k). Do I still need to do anything?
Yes — you must certify your exemption with CalSavers using your FEIN, EDD payroll number and the access code from your notice. Sponsoring a plan does not automatically remove you from the list. How to certify →
What if I received a penalty notice?
Act quickly — there is a 90-day appeal window with the Franchise Tax Board that closes permanently once a final notice issues. Penalties have also been abated for employers who come into compliance. Read the full walkthrough.
Is a 401(k) expensive for a small business?
Less than most owners expect once SECURE 2.0 credits are counted. Employers with 50 or fewer employees can claim 100% of startup costs, capped at the greater of $500 or the lesser of $250 × non-highly-compensated employees or $5,000, for three years. CalSavers generates none of these. Estimate your net cost →
What does CalSavers cost employees?
Savers pay all program fees: $14 a year plus 0.225%–0.39% of assets under the schedule effective 1 May 2026. The employer pays nothing — and is prohibited from contributing anything.
Find out which option actually costs you less
We will run your numbers against both and tell you plainly which one wins. No cost, no obligation.