California takes out state income tax at rates ranging from 1% to 13.3%, depending on your taxable income and filing status, plus a flat 1.3% State Disability Insurance deduction on all your wages. How much California takes out for taxes in your specific case comes down to which brackets your income falls into, the deductions and credits you qualify for, and how you fill out your state withholding form. Self-employed workers owe quarterly estimated payments on top of that, and anyone without qualifying health coverage may owe a separate penalty at filing time.
State Income Tax Brackets
California uses a progressive income tax with nine brackets: 1%, 2%, 4%, 6%, 8%, 9.3%, 10.3%, 11.3%, and 12.3%. For a single filer, those rates apply as follows:
- 1% on taxable income up to $11,079
- 2% from $11,079 to $26,264
- 4% from $26,264 to $41,452
- 6% from $41,452 to $57,542
- 8% from $57,542 to $72,724
- 9.3% from $72,724 to $371,479
- 10.3% from $371,479 to $445,771
- 11.3% from $445,771 to $742,953
- 12.3% above $742,953
Married couples filing jointly get wider brackets. The 1% rate covers the first $22,158 of taxable income, and the 9.3% bracket doesn’t start until $145,448.1Franchise Tax Board. Tax News October 2025 Thresholds are indexed to inflation and shift slightly each year.
An extra 1% surcharge applies to taxable income above $1 million, regardless of filing status, which funds the Mental Health Services Act.2Behavioral Health Services Oversight and Accountability Commission. The Act: MHSA Combined with the 12.3% top bracket, that brings the maximum rate to 13.3%, the highest state income tax rate in the country.
Because the system is progressive, each rate applies only to the income inside that bracket, not to your full earnings. A single filer with $60,000 in taxable income doesn’t pay 8% across the board. The first $11,079 is taxed at 1%, the next slice at 2%, and so on up the ladder. Using the Franchise Tax Board’s schedule, that filer would owe about $2,184, an effective rate of roughly 3.6%.1Franchise Tax Board. Tax News October 2025
The 1.3% State Disability Insurance Deduction
The other major state deduction on your paycheck is State Disability Insurance (SDI), withheld at 1.3% of your wages for 2026 with no wage cap.3Employment Development Department. 2026 California Employers Guide A worker earning $100,000 pays $1,300 in SDI; someone earning $500,000 pays $6,500. The ceiling that used to limit this deduction was eliminated on January 1, 2024, under Senate Bill 951.4Employment Development Department. Contribution Rates, Withholding Schedules, and Meals and Lodging Values
Those contributions fund two benefit programs: Disability Insurance, which replaces part of your wages if you can’t work due to a non-work illness, injury, or pregnancy, and Paid Family Leave, which pays partial wages when you take time off to care for a seriously ill family member or bond with a new child. The maximum weekly benefit in 2026 is $1,765.5Employment Development Department. Contribution Rates and Benefit Amounts
Deductions and Credits That Lower What You Owe
Before the brackets touch your income, California gives you a standard deduction. If you don’t itemize, you subtract $5,706 as a single filer or $11,412 if you’re married filing jointly, head of household, or a qualifying surviving spouse.6Franchise Tax Board. Deductions Those figures are indexed annually.
After you calculate the tax using the brackets, personal exemption credits cut your bill dollar for dollar. A single filer or head of household gets $153; married couples filing jointly get $306; each qualifying dependent adds another $475.1Franchise Tax Board. Tax News October 2025 Credits subtract directly from the tax owed, so they’re worth more per dollar than deductions, which only shrink the income being taxed.
Capital Gains Get No Discount
Unlike the federal system, which taxes long-term capital gains at preferential rates, California treats all capital gains as ordinary income.7Franchise Tax Board. Capital Gains and Losses Whether you held an asset a month or a decade, the profit runs through the same brackets as your salary. For high earners, that can mean a 13.3% hit on gains the federal government taxes much more lightly.
Setting Your Paycheck Withholding With Form DE 4
Your employer calculates California withholding from Form DE 4, the state’s Employee’s Withholding Allowance Certificate. It’s separate from the federal W-4, and because the two systems use different brackets, the two forms can produce very different results. On the DE 4, you declare your filing status and the number of allowances you want to claim. More allowances mean less withheld per paycheck; fewer mean more.
If you never submit a DE 4, your employer must withhold as if you’re single with zero allowances, the most aggressive setting.8Employment Development Department. Employees Withholding Allowance Certificate DE 4 That default usually takes out more than you actually owe, leaving you waiting for a refund. Claiming too many allowances cuts the other way, and you may face a tax bill plus penalties when you file.
The form also lets you request an extra flat dollar amount per pay period. That’s worth considering if you have a second job, a working spouse, or freelance income on the side. A quick annual review of your DE 4, especially after a marriage, a new child, or a significant pay change, keeps your withholding reasonably close to what you’ll actually owe.
Withholding on Bonuses and Supplemental Pay
When your employer pays a bonus, commission, or other supplemental income separately from your regular wages, California allows a flat withholding rate instead of the normal bracket calculation. Bonuses and stock options are withheld at 10.23%. Other supplemental pay such as overtime, commissions, severance, and vacation payouts is withheld at 6.6%.3Employment Development Department. 2026 California Employers Guide
Those flat rates are estimates, not final tax rates. If the flat withholding comes in below your actual bracket, you’ll owe the difference at filing; if it comes in above, you’ll get the excess back. The 1.3% SDI deduction also applies to supplemental wages.
Estimated Payments if You’re Self-Employed
If you’re self-employed, pulling in significant investment income, or receiving other income that isn’t withheld from a paycheck, California expects quarterly estimated tax payments. You generally need to pay estimates when you expect to owe at least $500 ($250 if married filing separately) and your withholding plus credits won’t cover the smaller of 90% of this year’s tax or 100% of last year’s tax.9Franchise Tax Board. Estimated Tax Payments
If your prior-year California adjusted gross income was over $150,000 ($75,000 if married filing separately), the prior-year safe harbor rises to 110%. If your current-year income is $1 million or more ($500,000 if married filing separately), the prior-year method isn’t available at all and you must use the 90%-of-current-year calculation.9Franchise Tax Board. Estimated Tax Payments
California’s quarterly schedule is uneven. For 2026:
- April 15, 2026: 30% of estimated tax due
- June 15, 2026: 40% due
- September 15, 2026: no payment due
- January 15, 2027: 30% due
The second installment covers the largest share, and no payment is due in September.10Franchise Tax Board. Due Dates – Personal Miss a payment or underpay and the Franchise Tax Board charges an interest-based penalty on the shortfall. A separate late-payment penalty of 5% of the unpaid tax plus 0.5% for each additional month can also apply, up to a maximum of 40 months.11Franchise Tax Board. Common Penalties and Fees
The Health Insurance Penalty
California requires most residents to carry qualifying health coverage, and if you don’t, the state collects a penalty when you file your return. For the 2025 tax year (filed in spring 2026), the penalty is the greater of a flat $950 per uninsured adult plus $475 per uninsured child, or 2.5% of gross income above the filing threshold for your status.12Franchise Tax Board. Personal Health Care Mandate
Even the larger figure is capped at the average cost of a bronze-level plan for your household size. For 2026, that cap is based on a monthly premium of $420 per individual.13Covered California. 2026 Individual Shared Responsibility Penalty Calculation
Several exemptions wipe out the penalty entirely. You don’t owe it if your income falls below the tax-filing threshold, if the cheapest available coverage would cost more than roughly 7.28% of household income, or if your coverage gap lasted three consecutive months or less. Members of health care sharing ministries, federally recognized Indian tribes, and certain noncitizens are also exempt.12Franchise Tax Board. Personal Health Care Mandate If you qualify, check the appropriate box on your state return, or apply through Covered California for hardship exemptions.