If you’re a business owner in California with even one W-2 employee, a new legal obligation is now on your plate. As of December 31, 2025, you are required to either register for CalSavers, the state’s mandatory retirement savings program, or certify an exemption if you already offer a qualified retirement plan.
This mandate, previously limited to larger employers, now includes small businesses with just 1–4 employees. Whether you run a boutique, a small agency, or a family-owned shop with a couple of full-time staff, you are now subject to this requirement.
And if you ignore it? The penalties aren’t just inconvenient. They’re expensive.
What Is CalSavers and Why Does It Matter
CalSavers is California’s state-sponsored Roth IRA retirement program. It’s designed to help employees save for the future, especially those working for companies that don’t offer a traditional retirement plan.
As a business owner, you’re not required to contribute any money, but you are responsible for:
- Registering your business on the CalSavers employer portal
- Uploading eligible employee information
- Facilitating payroll deductions through your payroll system
This process may sound simple, but noncompliance comes at a high price:
- $250 per employee after 90 days of inaction
- An additional $500 per employee after 180 days
- That’s up to $750 per employee, which can quickly escalate depending on the size of your team.
Why You Shouldn’t Go It Alone
If you’re like most small business owners, you’re already juggling tax deadlines, payroll, compliance, marketing, and daily operations. Adding state-mandated retirement compliance into the mix, especially one with financial penalties, can be overwhelming and easy to miss.
And here’s the truth: even a single mistake or missed deadline can trigger a penalty.
You may be asking:
- Do I really need to register?
- What if I only have part-time or seasonal employees?
- How do I submit this through my payroll system?
- What qualifies as a “retirement plan” for exemption?
These are the kinds of questions Scout Tax answers every day.
Let Scout Tax Handle It, So You Don’t Have To
Scout Tax is here to make sure your business doesn’t miss a beat. We help small businesses across California stay compliant with CalSavers without the stress, confusion, or risk of penalties.
We’ll take care of everything, including:
- Confirming whether or not your business qualifies for exemption
- Handling the CalSavers registration process
- Coordinating with your payroll provider
- Ensuring all deadlines are met and all requirements are fulfilled
Don’t Wait Until December 31, Start Today!
The state isn’t going to wait. The CalSavers deadline is December 31, 2025, and the penalties for doing nothing can stack up fast.
If your business has 1–4 employees and you’re not already offering a retirement plan, this law applies to you, and Scout Tax is ready to help you navigate it with confidence.
Reach out to Scout Tax today for a free consultation. We’ll walk you through exactly what you need, handle the registration process, and help you stay one step ahead of state compliance.
