Effective January 1, 2022, businesses subject to the San Francisco Administrative Office Tax (AOT) must pay an additional annual Overpaid Executive Tax (OET) of 0.4% to 2.4% on their payroll expense in San Francisco when their highest paid managerial executive earns more than 100 times the median compensation paid to employees in San Francisco. The first payment will not be due until 2023.
Similar to the Gross Receipts Tax, OET rates for employers that are not administrative offices will be based on gross receipts. San Francisco voters approved the OET during the November 3, 2020, election via ballot measure. The ballot measure also repealed the Payroll Expense Tax.
Local Income Tax Compliance Webinars Offered
Need more local tax help? Check out APA’s Local Income Tax Compliance course. Offered as a one-day Interactive Virtual session, four-part live webinar series, or four-part webinar on demand, the course features information on how to understand local payroll tax requirements in all 16 relevant states.
Interested in more state and local payroll coverage? APA’s PayState Update eNewsletter is perfect for you.
Lia Coniglio, Esq., is Managing Editor of PayState Update and Senior Manager of State Payroll Information Resources for the APA.
