Payroll for Election Workers and Temporary Government Employees
A compliance guide for California counties and municipalities navigating FICA thresholds, Section 218 Agreements, and state payroll tax rules.
Election season creates a payroll challenge that most government accounting teams underestimate. Every time a California county or municipality staffs a polling location, it takes on a set of federal and state tax obligations that do not follow ordinary payroll rules. The workers are employees. The pay periods are short. The workforce can number in the thousands. And the IRS rules governing whether FICA taxes apply are unlike anything in the private sector.
Election worker payroll compliance requires a working knowledge of a federal FICA exemption threshold that changes with inflation, California’s state disability insurance withholding requirements, Form W-2 filing triggers, and the patchwork of Section 218 Agreements that vary by state and by entity. Getting it wrong can mean amended returns, penalty exposure, and frustrated poll workers who receive unexpected tax forms or, worse, tax notices.
This guide breaks down exactly what California counties and municipalities need to know, and explains how a dedicated payroll partner can transform election season from a compliance headache into a well-managed process.
Payment level that triggers a mandatory Form W-2, even with no tax withheld
California SDI withholding rate for 2026, applied to all subject wages with no cap
Deadline to issue W-2s to every qualifying election worker for the prior tax year
Why Election Worker Payroll Does Not Follow Standard Rules
Most payroll managers are accustomed to two categories: employees who get W-2s and contractors who get 1099s. Election workers fit neither mold neatly.
Under the Internal Revenue Code, election workers are legally classified as common-law employees of the government entity that hired them. That means W-2 reporting obligations apply in most circumstances. However, a specific federal provision, IRC Section 3121(b)(7)(F)(iv), creates a FICA exemption for election workers whose annual compensation falls below an inflation-adjusted threshold.
For 2026, this is the federal FICA exemption threshold for election workers. Below this level, wages are generally exempt from Social Security and Medicare withholding, provided the employer’s Section 218 Agreement does not override the exemption.
There is an important all-or-nothing rule that catches many counties off guard. If a worker’s compensation meets or exceeds the threshold, FICA taxes apply retroactively to the first dollar earned, not just to the amount above the threshold. That cliff structure means that a worker who crosses the line owes FICA on every dollar paid that year, not only the amount over it. Government entities that expect some workers may cross the threshold are permitted to begin withholding FICA from the first dollar as a precaution and issue a refund if the worker ends up below the threshold for the year.
For deeper background on how the threshold has evolved and the employer’s specific reporting obligations, see AccuPay’s detailed breakdown: 2026 Election Worker FICA Threshold: A Compliance Guide for Employers.
Federal Reporting Requirements: What Triggers a W-2
Even when a worker’s wages are exempt from FICA, federal reporting obligations may still apply. The IRS requires government entities to issue Form W-2 to election workers who receive payments of $600 or more in any calendar year, even if no FICA or federal income tax was withheld.
Compensation paid to election workers is includible as wage income for federal income tax purposes. However, election worker compensation is generally exempt from federal income tax withholding under Sections 3401(a) and 31.3401(a)-2(b)(2) of the Treasury regulations. The practical result is that many election workers will receive a W-2 that shows reportable wages but no federal income tax withheld.
Importantly, workers can voluntarily elect federal income tax withholding by submitting a completed Form W-4 to the employing government entity. This option reduces year-end surprises for workers who prefer to have taxes withheld throughout the year.
Election workers may be identified by various titles, including poll worker, ballot clerk, precinct inspector, voting official, moderator, absentee ballot counter, or deputy head moderator. The title does not change the tax treatment; the nature of the services controls.
The IRS maintains a detailed resource on election worker reporting and withholding that serves as the primary federal authority on these rules, including guidance for workers who perform both election and non-election duties for the same entity.
Section 218 Agreements: The Variable That Changes Everything
The FICA exemption described above does not apply universally. Its availability depends on whether the employing government entity is covered by a Section 218 Agreement with the Social Security Administration, and if so, what that agreement says about election workers.
Section 218 of the Social Security Act allows states and their political subdivisions to voluntarily extend Social Security and Medicare coverage to government employees through negotiated agreements. Many states, including California, have a statewide Section 218 modification addressing election workers. Whether the exemption applies still comes down to the federal threshold and the specific terms of the state’s modification.
Some agreements specify their own exclusion amount for election workers. Others exclude election workers entirely. Terms can vary from state to state and, in “entity-by-entity” states, from one government body to the next. A county may discover that its coverage status was set years ago and needs to be reconfirmed before each election cycle.
The Social Security Administration maintains an election worker coverage chart by state, and California’s State Social Security Administrator can assist counties in determining the exact coverage status under their specific agreement. Before structuring payroll for an election cycle, every California county should confirm the terms of its Section 218 Agreement with respect to election workers. This is not a step to skip. Getting it wrong in either direction creates liability.
California State Payroll Tax Considerations
California’s state payroll tax system adds another layer of compliance that counties and municipalities must navigate.
State Disability Insurance (SDI)
As of January 1, 2024, California removed the taxable wage ceiling for SDI contributions. For 2026, the SDI withholding rate is 1.3 percent, applied to all subject wages with no cap. Whether election workers are subject to California SDI depends on the employment structure and whether the county has elected SDI coverage for its employees through the California Employment Development Department (EDD). Public entity employers, including counties, may have different SDI obligations than private employers. Counties should confirm with the EDD whether their election workers are classified as subject workers for SDI purposes.
Employment Training Tax (ETT)
ETT is an employer-paid contribution set at 0.1 percent for 2026, applied to the first $7,000 of each employee’s wages per calendar year. Public entity employers in California are generally not subject to ETT unless they have voluntarily elected coverage. Counties should verify their ETT obligations through their EDD account.
Unemployment Insurance (UI)
Most California counties are reimbursable employers under the state’s UI system, meaning they pay into the UI fund on a reimbursement basis rather than through the standard tax-rated structure. Whether temporary election workers create UI liability depends on the nature and duration of their employment and the county’s specific arrangement with the EDD.
Personal Income Tax (PIT) Withholding
As noted above, election worker wages are generally not subject to federal income tax withholding. California PIT withholding follows a similar structure for state income tax purposes, though workers may submit voluntary withholding requests.
The California EDD is the authoritative source for state payroll tax guidance. Visit California State Payroll Taxes: Rates and Withholding for current rates and program details.
The Operational Challenges: What Makes Election Payroll Uniquely Difficult
Beyond the compliance framework, the sheer logistics of election worker payroll create practical challenges that standard payroll systems handle poorly.
Seasonal, Concentrated Hiring Volume
A mid-size California county may bring on several hundred election workers in a span of days before a major election. New hire reporting, I-9 verification, and onboarding must happen rapidly and accurately, with little room for correction once the cycle begins.
Short Service Periods, Variable Pay
Many election workers are compensated via a flat fee for a single day or election period rather than an hourly wage. Pay structures may include a training stipend, an election-day fee, and a separate close-of-polls stipend, each of which must be tracked correctly.
The FICA Threshold Monitoring Problem
Because the FICA exemption is based on cumulative calendar-year earnings, counties must track each worker’s total election compensation across the full year, especially in counties that run multiple elections annually.
Entity-by-Entity Variation
Election administration is county-run in California. Each county has its own coverage status, its own EDD account, and its own internal payroll infrastructure. A payroll partner serving multiple counties must be fluent in these variations.
One additional wrinkle deserves attention: when an election worker also performs non-election services for the same government entity, the FICA analysis becomes more complex. The IRS has published guidance specifically addressing this scenario, including cases where dual-role workers are members of a government retirement system. That retirement system membership can affect whether the OASDI portion of FICA applies, separate from the Medicare analysis. Counties can review the dual-role examples in the same IRS election worker guidance referenced above.
How AccuPay Systems Handles Election Worker Payroll
AccuPay Systems, headquartered in Temecula, California, is one of the few independent payroll and HR service bureaus in Southern California that actively specializes in government sector payroll, including election worker payroll for counties and municipalities.
AccuPay’s dedicated election worker payroll practice is built around the specific compliance structure that government entities require: the FICA threshold analysis, Section 218 Agreement review, W-2 generation for sub-FICA workers who still meet the $600 reporting threshold, and California state tax treatment. The team has experience navigating the EDD’s rules for public entity employers and can help counties determine how SDI, ETT, and UI obligations apply to their specific workforce structure.
AccuPay delivers this work through the iSolved HCM platform, an enterprise-grade system used by more than 189,000 organizations nationwide. The platform’s ability to handle non-standard pay structures, track per-worker year-to-date earnings against the FICA threshold, and generate compliant W-2s makes it well suited to the specific demands of election season.
The iSolved platform updates every three weeks and includes payroll processing tools that help identify potential errors before payroll runs. For counties processing large volumes of election workers in a compressed window, that built-in quality assurance reduces the risk of W-2 inaccuracies and downstream tax notice exposure.
AccuPay’s support model differs materially from what most counties experience with large national payroll vendors. Rather than navigating a call center queue during the critical days around an election, AccuPay clients work with a dedicated account team that knows the government sector and is reachable when it matters. Average support hold time on the iSolved platform is under 24 seconds.
AccuPay is an MBE and 8(a) certified iSolved Network Partner, making it a natural fit for government entities with supplier diversity requirements or teaming considerations. AccuPay serves municipalities, counties, charter schools, political campaigns, and other government sector clients in addition to its commercial client base.
For government entities evaluating a payroll partner for election services, AccuPay’s 90-Day Double Money-Back Guarantee eliminates the risk of switching. In 20 years of operation, AccuPay has built the strongest client retention record in the industry. It still serves its very first client from 2006.
Learn more about AccuPay’s full government agency payroll services or explore the firm’s managed payroll services designed for organizations that need expert-managed payroll without the overhead of an in-house payroll department.
A Compliance Checklist for California Election Worker Payroll
Before each election cycle, counties and municipalities should work through the following steps.
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1
Confirm Section 218 Agreement status
Determine whether the county’s coverage includes or excludes election workers and whether a specific threshold amount applies.
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2
Review the FICA threshold for the current calendar year
For 2026, the federal threshold is $2,500. Confirm whether workers who already received election compensation earlier in the year have accumulated wages toward it.
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3
Establish a year-to-date earnings tracker per worker
Especially important in counties that run multiple elections annually. The system must flag the threshold-crossing moment and initiate retroactive FICA withholding.
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4
Prepare W-2s for all workers who earn $600 or more
Even if no FICA was withheld. W-2s must be issued by January 31 of the following year.
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5
Confirm California EDD obligations
Work with the county’s EDD account manager or a payroll partner to determine SDI, ETT, and UI obligations for election workers under the county’s specific employment structure.
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6
Implement a voluntary federal income tax withholding option
Make Form W-4 available to all election workers at onboarding so workers who prefer withholding can elect it.
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7
Plan the onboarding workflow for election day hires
New hire reporting requirements, I-9 verification, and direct deposit enrollment need to happen within the county’s compressed election-cycle timeline.
Frequently Asked Questions
Are election workers considered employees for payroll purposes?
Yes. The IRS classifies election workers as common-law employees of the government entity that hires them. This means the government entity has employer responsibilities, including potential FICA obligations and Form W-2 reporting, even though election workers are not considered employees in the ordinary sense of having a permanent, ongoing employment relationship. The classification controls the tax treatment, regardless of how briefly the worker serves.
What is the 2026 FICA exemption threshold for election workers?
For 2026, election workers whose total compensation for election services during the calendar year is less than $2,500 are generally exempt from FICA (Social Security and Medicare taxes), provided the employer’s Section 218 Agreement does not override the exemption. If a worker’s compensation meets or exceeds $2,500, FICA applies retroactively to the first dollar earned in the calendar year. Employers should verify their specific Section 218 Agreement status with their state Social Security administrator.
Do California counties have to withhold SDI from election worker wages?
It depends. California’s SDI program applies to subject wages, but whether election workers qualify as subject workers under a particular county’s EDD account depends on the county’s employment structure and any applicable Section 218 modifications. The California EDD is the authoritative source for determining SDI obligations for public entity employers. Counties should confirm this determination with the EDD or with a payroll partner experienced in California government employer compliance.
Do election workers who earn less than $2,500 still receive a W-2?
Potentially. While FICA and federal income tax withholding may not apply to workers below the threshold, IRS rules require government entities to issue Form W-2 to election workers who receive $600 or more in any calendar year, even when no taxes were withheld. Workers below $600 generally do not receive a W-2 for their election service compensation.
What should a California county do if an election worker crosses the FICA threshold mid-year?
The moment a worker’s election compensation reaches $2,500 for the calendar year, FICA taxes apply retroactively to the first dollar earned. The employer becomes responsible for the full employer-side FICA taxes on all prior payments to that worker and must withhold the employee-side taxes from the payment that pushed wages over the threshold, as well as all subsequent payments. If the employer anticipates that a worker may cross the threshold, it may begin withholding from the first dollar and issue a refund if the worker ends the year below the threshold.
Ready to Simplify Your County’s Election Worker Payroll?
AccuPay Systems has deep experience managing government sector payroll in California, including the specific FICA and state tax compliance requirements for election workers. Schedule a consultation with Felix Mwania to learn how AccuPay can serve your county or municipality before the next election cycle.
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