California collects more state income tax than any other state, with rates that climb from 1% on modest earnings to 13.3% on income above $1 million. If you are asking how much tax California takes, the answer stacks in layers: a progressive income tax, a 7.25% base sales tax that often lands between 7.75% and 10.25% at the register, property tax capped at about 1% of assessed value under Proposition 13, and payroll deductions led by a 1.3% State Disability Insurance withholding on every dollar you earn. What you actually pay depends on where you live, what you buy, and how much you make.
Income Tax Rates and Brackets
California taxes personal income on a progressive scale under Revenue and Taxation Code Section 17041, so each slice of income is taxed only at the rate for that slice.1California Legislative Information. Revenue and Taxation Code 17041 – Tax Rates For a single filer in 2026, the brackets run:
- 1% up to $11,079
- 2% from $11,080 to $26,264
- 4% from $26,265 to $41,452
- 6% from $41,453 to $57,542
- 8% from $57,543 to $72,724
- 9.3% from $72,725 to $371,479
- 10.3% from $371,480 to $445,771
- 11.3% from $445,772 to $742,953
- 12.3% from $742,954 to $1,000,000
- 13.3% on income over $1,000,000
Married couples filing jointly see roughly double these thresholds for the nine regular brackets. The 13.3% rate, however, applies at $1 million of taxable income regardless of filing status, because Revenue and Taxation Code Section 17043 adds a flat 1% surcharge on every dollar above that mark to fund the Mental Health Services Act.2UC Law SF Scholarship Repository. Proposition 63 Mental Health Services Expansion, Funding. Tax on Personal Incomes Above $1 Million. Initiative Statute. That combined 13.3% is the highest state-level income tax rate in the country.
Because the system is marginal, nobody pays 13.3% on all their income. A single filer earning $800,000 pays 1% on the first $11,079, 2% on the next slice, and so on up to 12.3% only on the portion above $742,953. The Franchise Tax Board adjusts the thresholds each year for inflation.
Before the brackets apply, California subtracts a standard deduction from your taxable income. For the 2025 tax year, the deduction is $5,540 for single filers and $11,080 for married couples filing jointly. That is well below the federal standard deduction, so your California taxable income is typically higher than your federal taxable income on the same gross earnings.
Capital Gains Get No Discount
Unlike the federal system, California does not give long-term capital gains a lower tax rate. Profits from selling stocks, real estate, or other investments are taxed at the same progressive rates as wages.3Franchise Tax Board. Capital gains and losses A high-income investor realizing a $500,000 gain can pay up to 13.3% on it at the state level, on top of federal capital gains tax.
What Comes Out of Your Paycheck
Beyond income tax withholding, California employees see State Disability Insurance taken out of every paycheck. SDI funds short-term disability benefits and Paid Family Leave. For 2026, the withholding rate is 1.3% of all wages with no cap, so every dollar you earn is subject to it.4Employment Development Department. Contribution Rates, Withholding Schedules, and Meals and Lodging Values The ceiling that used to cap SDI once high earners hit an annual limit was removed in 2024.
Unemployment Insurance and the Employment Training Tax are paid by employers, not employees, so they don’t appear on your pay stub. UI rates for established employers run from 1.5% to 6.2% on the first $7,000 of each employee’s wages, based on claims history, and new employers start at 3.4% for two to three years.5Employment Development Department. Tax-Rated Employers
Sales Tax at the Register
The statewide base sales and use tax is 7.25%, divided among the state general fund, local public safety funds, and county transportation. That base is the floor. Cities and counties add district taxes ranging from 0.10% to 2.00% each, and multiple districts can overlap in the same location.6California Department of Tax and Fee Administration. Detailed Description of the Sales and Use Tax Rate
Most Californians pay between about 7.75% and 10.25% in total sales tax, with the population-weighted average around 8.99%. The tax applies to tangible goods like electronics, furniture, and clothing. Most groceries and prescription medications are exempt. Use tax covers goods you buy out of state or online that would have been taxable if bought locally, at the same rate as the sales tax where you live.
Fuel carries its own excise tax built into the pump price. Diesel runs 46.6 cents per gallon through June 2026, and gasoline excise rates have generally run higher than diesel in recent years.7California Department of Tax and Fee Administration. Sales Tax Rates for Fuels Tobacco and alcohol carry their own excises collected from distributors and passed into retail prices.
Property Tax If You Own a Home
Property taxes in California work differently from most states. Article XIII A of the state constitution, passed by voters as Proposition 13 in 1978, caps the base ad valorem rate at 1% of a property’s assessed value.8Justia. California Constitution Article XIII A Section 1 – Tax Limitation The assessed value starts at the purchase price and can rise by no more than 2% per year, regardless of what the market does. A home bought for $400,000 a decade ago might still be assessed near $488,000 even if its market value has doubled.
The 1% base is not the whole bill. Voter-approved bonds for schools, water, and other projects add to it, and some properties sit inside Mello-Roos districts that fund local improvements through additional assessments. Once everything is layered in, a typical homeowner’s effective rate is closer to 1.1% to 1.5% of assessed value.
If You Don’t Live in California Full-Time
California taxes non-residents on income sourced to the state, including wages for work performed here, rent from California property, profits from selling California real estate, and income from a California-based business.9FTB.ca.gov. Part-year resident and nonresident If you live elsewhere but earn California-source income, you owe California tax on that income at the same progressive rates residents pay.
Residency is decided by whether you are present in California for other than a temporary or transitory purpose, or whether you are domiciled here but temporarily away.10Franchise Tax Board. Residents There is no 183-day rule in the statute. The Franchise Tax Board weighs where your home is, where your family lives, where your bank accounts and professional licenses sit, and how much time you spend in the state. People who split time between California and another state often underestimate how aggressively the FTB audits residency for high earners. Part-year residents are taxed on all income received while a California resident, plus any California-source income earned during the non-resident portion of the year.
What Happens If You File or Pay Late
Missing the filing deadline triggers a delinquent filing penalty of 5% of the unpaid tax for each month or partial month the return is late, up to 25%.11Franchise Tax Board. Common penalties and fees If your balance due is $540 or less, the minimum penalty is $135 or 100% of the amount due, whichever is smaller. Ignoring a formal Demand for Tax Return letter from the FTB adds a flat 25% penalty on the full tax due.
Paying late while filing on time is cheaper but not cheap. The FTB charges a one-time 5% underpayment penalty plus 0.5% of the unpaid balance for each month it remains outstanding, and that monthly charge can run up to 40 months.11Franchise Tax Board. Common penalties and fees Interest accrues on top. The least costly move when money is tight is to file on time anyway, which avoids the steeper filing penalty and leaves room to arrange a payment plan with the FTB before collection activity ramps up.