CalSavers is California’s state-run retirement savings program. It requires most private-sector employers that don’t already offer a retirement plan to enroll their workers in a payroll-deduction Roth IRA, and it lets self-employed Californians sign up on their own. The program is run by the California Secure Choice Retirement Savings Investment Board, costs employers nothing to facilitate, and gives workers an account that belongs to them and travels with them from job to job.1CalSavers. About CalSavers
Which Employers Have to Offer It
California Government Code Section 100032 requires every eligible employer without its own retirement plan to set up payroll deductions through CalSavers. The mandate was phased in by size, starting with employers of more than 100 workers and stepping down from there. SB-1126, passed in 2022, extended the requirement to any business with at least one California employee, with a final registration deadline of December 31, 2025 for the smallest employers.2California Legislative Information. California Code GOV 100032
An employer is exempt if it already sponsors a 401(k), SEP, SIMPLE, defined benefit pension, or an automatic enrollment payroll deduction IRA. Exempt employers don’t register; they self-certify through the CalSavers portal instead.2California Legislative Information. California Code GOV 100032
Participating employers pay no fees and carry no fiduciary responsibility for how workers’ investments perform. Under Government Code Section 100034, the employer is not a fiduciary of the program or its trust.3California Legislative Information. California Code GOV Title 21 Section 100034 The employer’s job is to register, upload an employee roster, and forward payroll deductions.
Who Gets Enrolled
Every W-2 employee of a participating employer is eligible once they turn 18. There is no minimum for hours worked or length of service.4CalSavers. Employer Information – CalSavers Independent contractors and the self-employed aren’t swept in by the mandate, but they can open a CalSavers account on their own through the saver portal.
When an employer uploads its roster, CalSavers mails or emails each worker an information packet. The worker then has 30 days to act:4CalSavers. Employer Information – CalSavers
- Do nothing and get auto-enrolled at the default settings
- Customize the contribution rate, investments, or account type
- Opt out online, by mail, or by phone through Client Services
Opting out isn’t final. You can re-enroll any time through the saver portal, and the program may run open-enrollment periods at least once every two years that give previously opted-out workers another chance to join.2California Legislative Information. California Code GOV 100032
How the Account Works
Each CalSavers account is a Roth IRA by default, funded with after-tax dollars from your paycheck. If you’d rather have the current-year tax deduction a Traditional IRA can offer, you can switch the account type in your settings.5Employment Development Department. CalSavers Retirement Savings Program Either way, the account is yours. If you change jobs or stop working, it stays with you.
The default savings rate is 5% of gross pay.6CalSavers. Contributions – CalSavers Unless you change it, the rate goes up by one percentage point around January 1 each year until it reaches 8%.7CalSavers. Frequently Asked Questions – CalSavers You can set a different rate, or turn off the auto-escalation, whenever you want.
If you don’t pick investments, your first 30 days of contributions sit in the CalSavers Money Market Fund. After that, your balance and new contributions move into a CalSavers Target Retirement Fund matched to your age, which gets more conservative as you approach retirement.8CalSavers. Saver Program Details – CalSavers Other investment options are available if you want to choose for yourself.
Contribution Limits and Income Rules
Because a CalSavers account is a regular IRA, it’s bound by the same federal rules as any other IRA. For 2026, the annual contribution cap is $7,500, with an extra $1,100 catch-up for anyone 50 or older, for a total of $8,600.9Internal Revenue Service. 401(k) Limit Increases to $24,500 for 2026, IRA Limit Increases to $7,500 That limit covers all of your IRAs together. If you contribute to another IRA on the side, both counts combine.
Roth eligibility phases out at higher incomes. For 2026, the modified adjusted gross income ranges are:
- Single or head of household: $153,000 to $168,000
- Married filing jointly: $242,000 to $252,000
- Married filing separately: $0 to $10,000
Earn above the top of your range and you can’t contribute to a Roth at all. Switching your CalSavers account to a Traditional IRA is one way to keep contributing without creating an excess-contribution problem.9Internal Revenue Service. 401(k) Limit Increases to $24,500 for 2026, IRA Limit Increases to $7,500
Going over the annual limit in any IRA triggers a 6% excise tax on the excess for every year it stays in the account. You can head off the penalty by pulling the excess, plus any earnings on it, before your tax return is due, including extensions.10Internal Revenue Service. Retirement Topics – IRA Contribution Limits
Taking Money Out
Roth IRA rules govern CalSavers withdrawals, and the key split is between what you put in and what it earned.
Your own contributions can come out at any time, for any reason, with no tax and no penalty. You already paid tax on that money before it went in.11Internal Revenue Service. Publication 590-B – Distributions from Individual Retirement Arrangements
Earnings are tighter. To pull earnings out fully tax-free and penalty-free, both of these have to be true:
- At least five tax years have passed since your first Roth contribution
- You’re at least 59½, permanently disabled, or using up to $10,000 for a first-time home purchase
If you take earnings out before you meet both tests, that portion is taxable income and may also face a 10% early-distribution penalty. The IRS ordering rules pull contributions first, then any conversions, then earnings last, so you only reach the taxable layer after everything you contributed is already out.11Internal Revenue Service. Publication 590-B – Distributions from Individual Retirement Arrangements
How Employers Register and Run It
Before logging in to the employer portal, you’ll want your Federal Employer Identification Number, your California Employer Payroll Tax Account Number from the EDD, the access code CalSavers sent you, and roster data for each eligible worker: legal name, contact information, and Social Security number or ITIN. A CSV file keeps the upload clean.
You have 30 days after registering to upload the full roster. CalSavers then reaches out to each employee directly with the information packet and enrollment choices.12CalSavers. Eligibility and Registration – CalSavers Once a worker is enrolled and payroll deductions start, you have seven days from each pay date to remit those contributions.7CalSavers. Frequently Asked Questions – CalSavers New hires and newly eligible workers need to be added within 30 days of their hire or eligibility date.13CalSavers. Enrollment – CalSavers
What Happens If an Employer Ignores the Mandate
The Franchise Tax Board enforces CalSavers and issues penalties for non-compliance:
- $250 per eligible employee after the first notice
- An additional $500 per eligible employee if the employer still hasn’t registered 90 days after that first notice
- Another $500 per eligible employee each year the employer stays out of compliance
Even a small payroll adds up fast. A business with 10 employees that ignores both notices faces $7,500 in fines inside the first 90 days.14Franchise Tax Board. CalSavers – FTB Employers that are exempt because they already offer a qualifying plan should self-certify through the portal so enforcement doesn’t start in the first place.