California Wage and Payroll Tax Facts

February 01, 2024

Having to comply with unique state taxes and wage laws can make processing payroll doubly daunting. Here’s everything you need to know about these rates and laws for the state of California.

Not only does California have one of the highest minimum wage rates in the country, it also has nearly 50 different local minimum wage rates across the state. The state is also one of the few with a State Disability Insurance program for employees who can't work due to a non-work-related injury or illness.

When it comes to processing payroll, California-based organizations must handle the following taxes in addition to those required by the federal government:

Personal Income (a.k.a. State Income Tax)
State Unemployment Insurance (SUI)
State Disability Insurance (SDI)
Employment Training Tax (ETT)
C Corporation Taxes

The below information was last updated July 1, 2024. It is not intended as legal or tax advice.

California Minimum Wage Rates

Wage Type	California Rates	Federal Rates
Minimum Wage	$16.00	$7.25
Tipped Minimum Wage	$16.00	$2.13
Actual Tip Credit	N/A	$5.12

Local Minimum Wage Rates

In addition to the state-wide minimum wage rates above, some cities and counties have unique minimum wage rates too:

Location	Wage Rate
Alameda City	$17.00
Belmont	$17.35
Berkeley	$18.67
Burlingame	$16.47
Cupertino	$17.75
Daly City	$16.62
East Palo Alto	$17.10
El Cerrito	$17.92
Emeryville	$19.36
Fremont	$17.30
Foster City	$17.00
Half Moon Bay	$17.01
Hayward	$16.00 (small employer) $16.90 (large employer)
Long Beach	$16.73 (hotel)
Los Altos	$17.75
Los Angeles	$17.28 (city) $17.27 (county)
Malibu	$17.27
Menlo Park	$16.70
Milpitas	$17.70
Mountain View	$18.75
Novato City	$15.53 (small employer; 1-25 employees) $16.07 (large employer; 26-99 employees) $16.86 (very large employers; 100+ employees)
Oakland	$16.50 $17.37 (hotel; with health benefits) $23.15 (hotel; without health benefits)
Palo Alto	$17.80
Pasadena	$17.50
Petaluma	$17.45
Redwood City	$17.70
Richmond	$17.20
San Carlos	$16.87
San Diego	$16.30
San Francisco	$18.67
San Jose	$17.55
San Mateo	$16.50 (county) $17.35 (city)
Santa Clara	$17.75
Santa Monica	$17.27
Santa Rosa	$17.45
Sonoma	$16.56 (small employer) $17.60 (large employer)
South San Francisco	$17.25
Sunnyvale	$18.55
West Hollywood	$19.08

California State Income Tax (SIT) Rates

California SIT is progressive, meaning it adjusts based on the income level of the employee paying the tax. In addition to the brackets below, there's an extra 1.1% tax applied to those earning $1 million dollars or more annually.

Filing Status	Income [Over X] - [But not over Y]	2024 Income Tax Rate
Single / Married (filed separately)	$0 - $10,412	1.10% of excess over $0
	$10,412 - $24,684	$114.53 + 2.20% of excess over $10,412
	$24,684 - $38,959	$428.51 + 4.40% of excess over $24,684
	$38,959 - $54,081	$1,056.61 + 6.60% of excess over $38,959
	$54,081 - $68,350	$2,054.66 + 8.80% of excess over $54,081
	$68,350 - $349,137	$3,310.33 + 10.23% of excess over $68,350
	$349,137 - $418,961	$32,034.84 + 11.33% of excess over $349,137
	$418,961 - $698,270	$39,945.90 + 12.43% of excess over $418,961
	$698,270 - $1,000,000	$74,664.13 + 13.53% of excess over $698,270
	$1,000,000 or greater	$115,488.06 + 14.63% of excess over $1,000,000
Married (filed jointly)	$0 - $20,824	1.10% of excess over $0
	$20,824 - $49,368	$229.06 + 2.20% of excess over $20,824
	$49,368 - $77,918	$857.03 + 4.40% of excess over $49,368
	$77,918 - $108,162	$2,113.23 + 6.60% of excess over $77,918
	$108,162 - $136,700	$4,109.33 + 8.80% of excess over $108,162
	$136,700 - $698,274	$6,620.67 + 10.23% of excess over $136,700
	$698,274 - $837,922	$64,069.69 + 11.33% of excess over $698,274
	$837,922 - $1,000,000	$79,891.81 + 12.43% of excess over $837,922
	$1,000,000 - $1,396,542	$100,038.11 + 13.53% of excess over $1,000,000
	$1,396,542 or greater	$153,690.24 + 14.63% of excess over $1,396,542
Head of Household	$0 - $20,839	1.10% of excess over $0
	$20,839 - $49,371	$229.23 + 2.20% of excess over $20,839
	$49,371 - $63,644	$856.93 + 4.40% of excess over $49,371
	$63,644 - $78,765	$1,484.95 + 6.60% of excess over $63,644
	$78,765 - $93,037	$2,482.93 + 8.80% of excess over $78,765
	$93,037 - $474,824	$3,738.87 + 10.23% of excess over $93,037
	$474,824 - $568,790	$42,795.68 + 11.33% of excess over $474,824
	$568,790 - $949,649	$53,555.33 + 12.43% of excess over $568,790
	$949,649 - $1,000,000	$100,771.80 + 13.53% of excess over $949,649
	$1,000,000 or greater	$107,584.29 + 14.63% of excess over $1,000,000

Additional California SIT Details
Supplemental Withholding Computation	Flat rate of 6.6% or 10.23% for stock options/bonuses
Valid Filing Statuses	S = Single M = Married H = Head of Household
Exemptions (rates)	Number of allowances Number of estimated deductions
Exemptions (individuals)	Exemption Information Sheet
Form W-4	Form DE-4 (for employees hired on or after January 1, 2020)
Reconciliation Frequency	Quarterly

California State Unemployment Insurance (SUI) Rates

SUI provides unemployment benefits to eligible workers who are unemployed through no fault of their own (as determined by state law) and meet the state’s eligibility requirements.

California SUI Tax Details
Taxable Wage Base	$7,000
Employee Subject to Tax	No
Rates for Experienced Employers	1.5% – 6.2% (Schedule F+)
Rates for New Employers	3.4%
Effective Period	Calendar Year
Voluntary Contributions Allowed	Yes; last working day in March (not permitted though when Schedule E, F, or the emergency solvency surcharge are in effect).

California State Disability Insurance (SDI) Rates

SDI benefits are normally funded by employees through mandatory payroll deductions from each paycheck. While employers don't contribute to these deductions, they are required to collect and remit said deductions to the state on each employee’s behalf.

California SDI Details
Maximum Taxable Earnings	No limit
Employee Deduction Rate	1.1%
Maximum Employee Deduction Amount	No limit
Employer Contribution	No

Employers can also opt to carry their own insurance (a.k.a. voluntary plans or VDI). If an employer chooses a voluntary plan, they’re required to pay a VDI assessment of 0.126%.

Miscellaneous California Tax Information

Reciprocal Agreement(s)

Reciprocal agreements are when workers who live and work in different states are only required to pay taxes to the state where they live. California doesn’t currently have any reciprocal agreements, but residents in the following states are allowed a tax credit towards their SITs for taxes paid to their home state:

Arizona
Guam
Indiana
Oregon
Virginia

Paid Sick Leave (PSL) Taxes

The state of California doesn’t require employers to collect PSL taxes, but it does have a program providing such leave to eligible employees:

California PSL Details
Covered Employees	Employees who have worked at least 30 days for the employer.
Covered Employers	Any employer that has at least one employee who works more than 30 days in a year in the state of California.
Accrual Method(s)	1 hour per 30 hours worked; either accrued at a fractional rate per timed work or frontloaded at the start of a 12-month period.
Annual Accrual Maximum	80 hours
Annual Use Maximum	40 hours
Carryover Maximum	Limited to accrual maximum
Probationary Period	Yes; 90 calendar days
Frontloading Allowed	Yes
Record Retention	3 years
FAQs	California Paid Sick Leave

Paid Family and Medical Leave (PFML) Taxes

California uses employee contributions to the state's SDI fund (see above) to fund its Paid Family Leave (PFL) program. This is why one of the eligibility requirements for employees is whether they have made SDI contributions in the past. Since the program only replaces 60% - 70% of an employee's wages, employers may allow employees to use other forms of paid time off (e.g., sick time, vacation time, etc.) to supplement and receive 100% of their pay while on leave.

California PFL Details
Covered Employees	Part-time or full-time employees who have made SDI contributions
Covered Employers	All with 5 or more employees
Amount of Leave	Up to 8 weeks
Wage Replacement	60% - 70% of wages earned 5-18 months before filing a claim
Acceptable Uses	Care for a seriously ill family member Bond with a new child Participate in a qualifying event for a family member's military deployment

Employment Training Tax (ETT) Rates

To assist with the workforce development programs, employees within California also pay an ETT of 0.1% of wages up to $7,000 (i.e., $7 a year).

C Corporation Taxes

C corporations in California also pay an 8.84% corporate income tax if they receive income in the state and are incorporated, registered to do business in, and actually doing business in California. This tax doesn't apply to S corporations, but some shareholders may have to pay personal income tax on their share of an S corporation’s income.

California Employer Registration

The California Employment Development Department can help with your state-based employer registration, including best practices, account numbers, and unemployment information.

Registration Details	Employment Development Department
Phone	(888) 745-3886
Online Registration	EDD Online Enrollment
Registration Instructions	Employers can register online or by phone. If registering online, your account number will be issued during registration. The same account number will be issued for Withholding and Unemployment.
Employer Self-Service Login	EDD Employer Services Login Page

Additional California Payroll Tax Resources

This information is provided as a courtesy and may be updated at any time. It is not intended as legal or tax guidance. If you have questions or concerns, we encourage you to seek the advice of a qualified CPA, tax attorney, or advisor.

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