CaliforniaHolds the highest top marginal income tax rate in the nation, making it one of the most heavily taxed states overall. This high-tax environment directly impacts the take-home pay of California workers. The state operates a progressive income tax system, meaning higher earners pay a greater marginal tax rate on their income. While many cities across California impose additional local sales taxes, they do not levy separate local income taxes.
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California Paycheck Calculator
California Paycheck Quick Facts
- State Income Tax Rate: 1.00% to 13.30%
- Median Household Income: $95,521 (Source: U.S. Census Bureau)
- Local Income Taxes: None — no cities in California impose local income taxes
How Your California Paycheck Works
Most jobs pay employees either an hourly wage or an annual salary. However, your actual take-home pay is often lower than the figure listed in your job offer. This difference is primarily due to mandatory tax withholdings and voluntary contributions that occur before your paycheck reaches you.
One of the first deductions from your earnings is for FICA taxes, which fund Social Security and Medicare. Employers withhold 6.2% for Social Security and 1.45% for Medicare from each paycheck. High earners — individuals making over $200,000, married couples filing jointly making over $250,000, and married individuals filing separately earning more than $125,000 — are also subject to an additional 0.9% Medicare surtax.
Employers match the Social Security and Medicare taxes, paying an equal share to cover the entire FICA tax obligation. However, if you are self-employed, you are responsible for paying both the employee and employer portions through the self-employment tax, totaling 15.3% of your income. Fortunately, self-employed individuals can deduct the employer-equivalent portion on their tax returns.
Several other factors influence the size of your paycheck, including your marital status, pay frequency, and any deductions or contributions you elect. Contributions to employer-sponsored programs like health insurance, 401(k) retirement plans, or Health Savings Accounts (HSAs) are typically deducted pre-tax, reducing your taxable income and your take-home pay.
In addition, the IRS updated tax withholding guidelines starting in 2018, which impacted how much was withheld from employee paychecks. A redesigned Form W-4 was introduced, removing the use of allowances and personal or dependency exemptions. Instead, the new form adopts a simplified five-step process where employees provide specific dollar amounts, claim dependents, and report additional income or deductions.
California Median Household Income
| Year | Median Household Income |
|---|---|
| 2023 | $95,521 |
| 2022 | $91,905 |
| 2021 | $81,575 |
| 2020 | $77,652 |
| 2019 | $78,105 |
| 2018 | $70,489 |
| 2017 | $70,038 |
| 2016 | $66,637 |
| 2015 | $63,636 |
| 2014 | $60,487 |
California’s payroll sThe system stands apart mainly because of its significantly higher taxes. The state features a progressive income tax structure with 10 tax brackets, meaning lower-income earners pay a lower rate compared to residents of states with flat tax systems.
California’s top marginal income tax rate — the highest in the nation at 13.3% — only applies to single filers earning over $1 million and joint filers earning over $2 million. This rate includes a 1% Mental Health Services Tax levied on income above $1 million.
While income taxes are high, property tax rates in California are actually below the national average. If you’re planning to buy a home, it’s essential to review current California mortgage rates to better plan your housing costs.
Another key difference is that Californian cities do not impose local income taxes, although sales tax rates vary by city and county. While sales taxes won’t impact your paycheck, they can affect your overall living expenses.
California is also one of the few states that requires state disability insurance (SDI) deductions from employee wages. Though it reduces your take-home pay, disability insurance provides vital income protection in case of short- or long-term disability. Employers withhold 1.1% of taxable wages for SDI. Prior to 2024, SDI contributions were capped at wages up to $153,164, but Senate Bill 951 removed this cap, meaning higher earners are now subject to SDI withholding as well.
California applies a flat tax rate to employees receiving supplemental wages, such as bonuses, commissions, severance pay, relocation bonuses, and accumulated sick leave payouts.
- Bonuses and stock options are taxed at 10.23%.
- Other supplemental wages are taxed at a 6.6% flat rate.
These supplemental wage taxes are directly reflected in your paycheck withholdings.
Income Tax Brackets
| California Taxable Income | Rate |
|---|---|
| $0 – $10,756 | 1.00% |
| $10,756 – $25,499 | 2.00% |
| $25,499 – $40,245 | 4.00% |
| $40,245 – $55,866 | 6.00% |
| $55,866 – $70,606 | 8.00% |
| $70,606 – $360,659 | 9.30% |
| $360,659 – $432,787 | 10.30% |
| $432,787 – $721,314 | 11.30% |
| $721,314 – $1,000,000 | 12.30% |
| $1,000,000+ | 13.30% |
Large businesses are subject to a gross receipts tax based on their payroll expenses. While sometimes mistaken for a personal income tax, this tax only applies to businesses — not individual employees. As a result, if you work in San Francisco, you won’t be personally responsible for paying this tax.
Navigating how taxes impact your finances can be complex, but professional guidance can help. With SmartAsset’s free tool, you can get matched with up to three vetted financial advisors in your area. You’ll also receive a free introductory call to help you choose the advisor who best fits your needs.
Ready to take the next step toward your financial goals? Start your search for a trusted financial advisor today.
How You Can Affect Your California Paycheck
While some paycheck withholdings are mandatory, there are steps you can take to influence the amount of your take-home pay. For instance, increasing your retirement contributions will lower your immediate paycheck, but it helps secure your financial future. That’s why many personal finance experts recommend boosting your retirement savings whenever you receive a raise — it minimizes the impact on your take-home pay and encourages consistent saving.
Choosing a more expensive health insurance plan or adding family members to your coverage can also increase the amount withheld from your paycheck, depending on the options your employer offers.
If you consistently receive a large tax refund, it may be a sign that you’re having too much withheld from your paycheck. In this case, you might want to complete a new W-4 form and California DE-4 form. These documents instruct your employer on how many allowances you’re claiming, which directly affects your paycheck.
- Claiming more allowances generally results in larger paychecks and a smaller refund at tax time.
- Claiming fewer allowances can help avoid owing taxes in April by increasing your withholdings throughout the year.
Under California law, employers can only make deductions from your wages that are required by state and federal law — such as income taxes — or deductions you have personally authorized, like health insurance premiums. Union workers may encounter additional deductions, such as pension payments, if those are outlined in a collective bargaining agreement.
California Top Income Tax Rate
| Year | Top Income Tax Rate |
|---|---|
| 2024 | 13.30% |
| 2023 | 13.30% |
| 2022 | 13.30% |
| 2021 | 13.30% |
| 2020 | 13.30% |
| 2019 | 13.30% |
| 2018 | 12.30% |
| 2017 | 12.30% |
| 2016 | 13.30% |
| 2015 | 13.30% |
Frequently Asked Question
How does the California paycheck calculator work?
The California paycheck calculator estimates your take-home pay by factoring in federal and state income taxes, Social Security, Medicare contributions, and any additional deductions, such as retirement contributions or health insurance premiums.
What taxes are deducted from my paycheck in California?
In California, your paycheck will typically have deductions for federal income tax, state income tax, Social Security tax (6.2%), Medicare tax (1.45%), and possibly state disability insurance (1.1%). Supplemental wages and other specific deductions may also apply.
What is the California state income tax rate?
California has a progressive state income tax system with rates ranging from 1.00% to 13.30%, depending on your income bracket.
Does California have local income taxes?
No, California cities do not impose local income taxes. However, some cities may have additional sales taxes.
How do bonuses and overtime pay affect my paycheck in California?
In California, bonuses and stock options are taxed at a flat rate of 10.23%, while other supplemental wages like overtime and severance are taxed at 6.6%.
What is California’s SDI (State Disability Insurance) tax?
California requires a State Disability Insurance (SDI) tax of 1.1% on your taxable wages. As of 2024, there is no income cap, meaning higher earners are also subject to this tax.
How can I increase my take-home pay in California?
To boost your take-home pay, you can adjust your W-4 and DE-4 forms to claim more allowances, contribute less to pre-tax benefits, or optimize your retirement savings strategy. Be cautious, though, as this may affect your year-end tax refund.
Conclusion
Understanding your paycheck in California is essential for effective financial planning. With higher state income taxes, mandatory SDI contributions, and progressive tax brackets, estimating your take-home pay can sometimes feel overwhelming. That’s where the California Paycheck Calculator becomes a valuable tool. It helps you break down federal and state withholdings, benefits deductions, and other factors that impact your final earnings.
By using the calculator, you can better anticipate your monthly income, adjust your tax withholdings, and make smarter decisions about savings, investments, and budgeting. Whether you’re starting a new job, negotiating a raise, or simply reviewing your finances, an accurate paycheck estimate ensures you’re prepared for what hits your bank account. Start planning smarter today with the California Paycheck Calculator.