What Is CA SIT Tax? Brackets, Withholding, and Bonuses

SIT on a California pay stub stands for State Income Tax: the money your employer withholds from each paycheck and sends to the Franchise Tax Board on your behalf.¹ It is a prepayment toward the state income tax you’ll owe for the year. When you file your California return, you find out whether you overpaid and get a refund, or still owe the difference.² How much comes out of each check depends on what you earn, your filing status, and the allowances you claim on a California form called the DE 4.

How Your SIT Withholding Is Calculated

Your employer sets your SIT using the DE 4 (Employee’s Withholding Allowance Certificate). It is separate from the federal W-4 and controls only your California withholding. You can get it from your HR department or download it from the Employment Development Department website.³

Two inputs do most of the work on the DE 4: your filing status (single, married, or head of household) and the number of withholding allowances you claim. Each allowance shelters a portion of your wages from withholding. More allowances mean less SIT per paycheck; fewer allowances mean more. The form includes worksheets that estimate the right number based on your dependents, expected deductions, and credits.

Line 2 of the DE 4 lets you request a specific extra dollar amount withheld per pay period. That is useful if you have side income with no withholding or you’ve owed money in past years. Your employer isn’t required to honor the request, though most do.⁴ If they refuse, the next-best move is to file as single with zero allowances, which produces the highest standard withholding.

If You Never Filed a DE 4

If you’ve never submitted a DE 4, your employer doesn’t guess. The default is to withhold as if you are single with zero allowances.⁴ That’s the most aggressive standard setting. You’ll likely get a refund, but your checks are smaller than they need to be all year. Filing a DE 4 that matches your actual situation puts that money back in your pocket sooner.

The Penalty for a False DE 4

Claiming allowances you aren’t entitled to carries real consequences. A DE 4 filed with no reasonable basis that results in too little tax withheld triggers a $500 penalty under Revenue and Taxation Code Section 19176.⁵ Willfully providing false information can also lead to criminal penalties under Unemployment Insurance Code Section 13101.⁴

California SIT Brackets for 2026

California uses a progressive system with nine brackets. You don’t pay a single rate on all your income; each rate applies only to the slice of income that falls inside its range. For single filers in 2026:

1% 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% over $742,953

Married couples filing jointly get brackets roughly double those of single filers.⁶ Earners above $1 million pay an additional 1% Mental Health Services Act surcharge, pushing the top marginal rate to 13.3%.⁷

Before your income hits any bracket, it is reduced by the standard deduction (or itemized deductions, if larger). The 2026 California standard deduction is $5,706 for single filers and $11,412 for joint filers.⁶ It is considerably smaller than the federal standard deduction, which is one reason people comfortable with their federal withholding sometimes owe California at tax time.

If you expect to qualify for the California Earned Income Tax Credit (CalEITC) — available for 2025 to individuals earning up to $32,900, worth up to $3,756 — you can raise your allowances on the DE 4 so less SIT comes out of each check.⁸

Why Your Bonus Looks Taxed Differently

Bonuses, commissions, overtime, and severance don’t always run through the same calculation as your regular wages. When supplemental pay is issued in a separate check, your employer can either combine it with regular wages and use the standard tables, or apply a flat rate that ignores allowances entirely.⁹ The flat rates are:

10.23% for bonuses and stock options
6.6% for overtime, commissions, severance, and vacation pay

If the bonus is paid alongside your regular wages in a single check, the employer must lump everything together and withhold using the standard bracket calculation.⁹ The flat method only applies when supplemental pay goes out separately. This is why a standalone bonus check often looks like it was taxed at a different rate. The method affects timing, not your actual annual tax.

Adjusting Your Withholding After a Life Change

Getting married, having a child, buying a home with a large mortgage, or picking up a second job are all reasons to redo your DE 4. You hand the updated form to your employer’s payroll department. Nothing goes to the state.³ Most employers process the change within one or two pay cycles. Check the SIT line on your next pay stub to confirm.

Multiple jobs deserve extra care. Each employer withholds as if that job were your only income, so the brackets applied to each paycheck understate your real marginal rate. Claiming fewer allowances, or zero, at each job helps prevent a bill in April. The DE 4 worksheets walk you through it.

When You Can Skip SIT Withholding

A narrow group of workers can claim exempt status on the DE 4 and have no SIT withheld. You must meet both conditions:

You owed no federal or California income tax last year.
You don’t expect to owe federal or California income tax this year.

Exempt status doesn’t carry over. File a new DE 4 by February 15 each year to keep it. If your situation changes and you’ll owe tax next year, you have to submit an updated DE 4 by December 1.⁴

A separate exemption exists under the Military Spouses Residency Relief Act. If your spouse is an active-duty servicemember stationed in California, you’re here only to be with them, and you keep legal residence in another state, your wages are exempt from California SIT withholding. You claim it by checking the appropriate box on the DE 4.¹⁰ State disability and unemployment contributions still apply, since those are tied to where you physically work.

Avoiding an Underpayment Penalty

If your withholding and any estimated payments don’t cover enough of your bill, the Franchise Tax Board charges an underpayment penalty running at 7% annual interest for the period from July 2025 through June 2026.¹¹ You avoid it by meeting a safe harbor. Your total payments for the year need to equal at least the smaller of:

90% of what you owe for the current year, or
100% of the tax shown on your prior-year return

Higher earners face tighter rules. If your California adjusted gross income exceeded $150,000 last year ($75,000 if married filing separately), the prior-year safe harbor rises to 110%. And if your current-year California AGI hits $1 million or more ($500,000 if married filing separately), the prior-year safe harbor is gone entirely; you must base payments on the current year’s actual liability.¹² That rule catches high earners after a particularly good year: the only safe harbor left is 90% of the current year’s tax.

SIT Is Not the Same as SDI

SIT isn’t the only California deduction on your stub. You’ll also see SDI, State Disability Insurance. For 2026 the SDI rate is 1.3% of wages with no taxable wage ceiling. SDI funds short-term disability benefits and Paid Family Leave. The two deductions use completely different math: SIT uses progressive brackets and your DE 4 allowances, while SDI is a flat percentage of gross wages. Unemployment Insurance in California is paid entirely by the employer and does not come out of your check.⁹

1
Franchise Tax Board. Withholding
2
Franchise Tax Board. Estimated Tax Payments
3
Franchise Tax Board. Adjust Your Wage Withholding
4
Employment Development Department. Employee’s Withholding Allowance Certificate (DE 4)
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California Legislative Information. California Revenue and Taxation Code 19176
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Employment Development Department. 2026 Withholding Schedules – Method B
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California Legislative Information. California Revenue and Taxation Code 17043
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Franchise Tax Board. California Earned Income Tax Credit
9
Employment Development Department. 2026 California Employer’s Guide (DE 44)
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Employment Development Department. Military Spouses Residency Relief Act
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Franchise Tax Board. Interest and Estimate Penalty Rates
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Franchise Tax Board. 2025 Instructions for Form 540-ES Estimated Tax for Individuals