540 Tax Rate Schedule: Schedules X, Y, Z and the 1% Surcharge

The California 540 tax rate schedule is the bracket table you use to turn your taxable income into the tax you owe on Form 540. For the 2025 tax year, filed in 2026, it has nine brackets running from 1% up to 12.3%, plus a 1% surcharge on taxable income above $1 million that lifts the top rate to 13.3%. Which of the three schedules you use, X, Y, or Z, depends on your filing status, and the dollar thresholds shift a little each year with inflation.

How the Brackets Actually Work

California taxes income in layers. Each rate applies only to the dollars that fall inside that bracket’s range, not to your whole income. A single filer earning $80,000 pays 1% on the first $11,079, then 2% on the next slice, and so on up the ladder. Only the portion above $72,724 is taxed at 9.3%. That is the same progressive structure the federal system uses, with more brackets and different rates.

The Franchise Tax Board adjusts the bracket thresholds each year based on the California Consumer Price Index, so wages that only kept pace with inflation don’t push you into a higher rate. The underlying bracket structure comes from Revenue and Taxation Code Section 17041; the specific dollar figures below reflect the 2025 adjustment.

Schedule X: Single and Married/RDP Filing Separately

Single filers and those married or in a registered domestic partnership filing separately use Schedule X.

1% on taxable income from $0 to $11,079
2% on $11,079 to $26,264
4% on $26,264 to $41,452
6% on $41,452 to $57,542
8% on $57,542 to $72,724
9.3% on $72,724 to $371,479
10.3% on $371,479 to $445,771
11.3% on $445,771 to $742,953
12.3% on $742,953 and above

The 9.3% band is wide, covering roughly $73,000 up to $371,000, which is where most middle- and upper-middle-income single filers land. A six-figure salary alone doesn’t reach the double-digit rates.¹

Schedule Y: Married/RDP Filing Jointly and Qualifying Surviving Spouse

Joint filers and qualifying surviving spouses use Schedule Y, which roughly doubles every threshold from Schedule X. The doubling keeps two combined incomes from being pushed into higher brackets just because they share a return.

1% on taxable income from $0 to $22,158
2% on $22,158 to $52,528
4% on $52,528 to $82,904
6% on $82,904 to $115,084
8% on $115,084 to $145,448
9.3% on $145,448 to $742,958
10.3% on $742,958 to $891,542
11.3% on $891,542 to $1,485,906
12.3% on $1,485,906 and above

A couple earning $145,000 combined stays in the 8% bracket or below. A single filer with the same income would already be well into the 9.3% bracket.¹

Schedule Z: Head of Household

Head of household filers use Schedule Z, which sits between the other two. To qualify, you generally need to be unmarried or considered unmarried on the last day of the year, pay more than half the cost of keeping up your home, and have a qualifying child or relative who lived with you for more than 183 days.²

1% on taxable income from $0 to $22,173
2% on $22,173 to $52,530
4% on $52,530 to $67,716
6% on $67,716 to $83,805
8% on $83,805 to $98,990
9.3% on $98,990 to $505,208
10.3% on $505,208 to $606,251
11.3% on $606,251 to $1,010,417
12.3% on $1,010,417 and above

The lower brackets nearly match the joint filing thresholds, but the upper brackets narrow. The 9.3% band ends at $505,208 for head of household versus $742,958 for joint filers.¹

The 1% Surcharge Over $1 Million

Regardless of filing status, taxable income above $1,000,000 carries an extra 1% under Revenue and Taxation Code Section 17043.³ Stacked on the 12.3% top bracket, that puts the maximum rate at 13.3%. Only the dollars above the $1 million line are hit with the extra 1%. Voters approved the surcharge in 2004 through Proposition 63, the Mental Health Services Act, and the $1,000,000 threshold is not indexed for inflation.

Calculating Your Tax From the Schedule

Each row of the schedule pairs a rate with a pre-computed base tax that covers everything below the row. You find your bracket, subtract the bracket’s floor from your taxable income, multiply the difference by the row’s rate, and add the base tax.

The FTB’s own example uses Chris and Pat Smith, filing jointly with $125,000 in taxable income on Form 540, line 19:

Find the bracket. On Schedule Y, $125,000 sits in the $115,084 to $145,448 range, which is the 8% row.
Subtract the floor. $125,000 minus $115,084 is $9,916.
Apply the rate. $9,916 times 8% is $793.28.
Add the base tax from that row. $3,974.82 plus $793.28 is $4,768.10, which rounds to $4,768 on line 31.

The $3,974.82 base figure already contains the tax from the five brackets below the 8% row, which is why you don’t have to compute each layer yourself.¹

Getting to Taxable Income First

The schedule only works once you have taxable income, which is your adjusted gross income minus deductions. For 2025, California’s standard deduction is $5,706 for single filers and married filing separately, and $11,412 for joint filers, head of household, and qualifying surviving spouses.⁴ You can itemize instead, though California’s itemized rules differ from the federal ones in several places.

After the schedule gives you a tax figure, credits come off the top. California’s personal exemption credit for 2025 is $153 per exemption for single and married-filing-separately filers, doubled for joint filers. Each dependent adds another exemption credit. These reduce your tax dollar for dollar, so a family of four claiming four exemption credits knocks $612 off the bill. Like the bracket thresholds, the exemption credit adjusts each year for inflation.

When the 2025 Return Is Due

The 2025 Form 540 is due April 15, 2026, and California grants an automatic extension to October 15, 2026 for filing, with no form to submit. The extension covers the paperwork only. Any tax owed is still due April 15, and interest and penalties start running the day after if a balance goes unpaid.⁵

1
State of California Franchise Tax Board. 2025 California Tax Rate Schedules
2
Franchise Tax Board. Head of Household Filing Status
3
California Legislative Information. California Revenue and Taxation Code 17043 – Imposition of Tax
4
Franchise Tax Board. Standard Deduction
5
Franchise Tax Board. Due Dates – Personal