California Paycheck Calculator - SmartAsset (2024)

California Paycheck Calculator

California Paycheck Quick Facts

• California income tax rate: 1.00% - 13.30%
• Median household income in California: $91,905 (U.S. Census Bureau)
• Number of cities that have local income taxes: 0

How Your California Paycheck Works

Your job probably pays you either an hourly wage or an annual salary. But unless you’re getting paid under the table, your actual take-home pay will be lower than the hourly or annual wage listed on your job contract. The reason for this discrepancy between your salary and your take-home pay has to do with the tax withholdings from your wages that happen before your employer pays you. There may also be contributions toward insurance coverage, retirement funds, and other optional contributions, all of which can lower your final paycheck.

When calculating your take-home pay, the first thing to come out of your earnings are FICA taxes for Social Security and Medicare. Your employer withholds a 6.2% Social Security tax and a 1.45% Medicare tax from your earnings after each pay period. (Take note: Individuals earning over $200,000 (as well as joint filers over $250,000 and those married but filing separately with incomes above $125,000), also pay a 0.9% Medicare surtax.)

Your employer matches the 6.2% Social Security tax and the 1.45% Medicare tax in order to make up the full FICA tax requirements. If you work for yourself, you’ll have to pay the self-employment tax, which is equal to the employee and employer portions of FICA taxes for a total of 15.3% of your pay. (Luckily, there is a deduction for the part of FICA taxes that your employer would normally pay.)

Other factors that can affect the size of your paycheck in California or in any other state include your marital status, your pay frequency and what deductions and contributions you make. If you make contributions to your company’s health insurance plan, for example, that payment will be deducted from each of your paychecks before the money hits your bank account. The same goes for contributions you make to a 401(k) or a Health Savings Account (HSA).

In recent years, the IRS released updated tax withholding guidelines, and taxpayers should have seen changes to their paychecks starting in 2018. The IRS also made revisions to the Form W-4. This version removes the use of allowances, along with the option of claiming personal or dependency exemptions. Instead, it requires that the filer enter specific dollar amounts, and it uses a five-step process that lets you enter personal information, claim dependents and indicate any additional income.

So what makes California’s payroll system different from the systems you might have encountered in other states? For one thing, taxes here are considerably higher. The state has 10 income tax brackets and the system is progressive. So if your income is on the low side, you'll pay a lower tax rate than you likely would in a flat tax state.

California’s notoriously high top marginal tax rate of 13.3%, which is the highest in the country, only applies to income above $1 million for single filers and $2 million for joint filers. (Take note: This top rate includes an additional 1% mental health services tax that is leveraged on income above $1 million.)

While the income taxes in California are high, the property tax rates are fortunately below the national average. If you are thinking about using a mortgage to buy a home in California, check out our guide to California mortgage rates.

California also does not have any cities that charge their own income taxes. However, sales tax in California does vary by city and county. This won’t affect your paycheck, but it might affect your overall budget.

California is one of the few states to require deductions for disability insurance. This may seem like a drag, but having disability insurance is a good idea to protect yourself and your family from any loss of earnings you might suffer in the event of a short- or long-term disability.

If you earn money in California, your employer will withhold state disability insurance payments equal to 1.1% of your taxable wages. Before 2024, wages over $153,164 were not subject to withholding tax. However, with the passing of Senate Bill 951, employees earning above that income will be taxed as well.

Some employees earn supplemental wages. This includes overtime, commission, awards, bonuses, payments for non-deductible moving expenses (often called a relocation bonus), severance and pay for accumulated sick leave.

In California, these supplemental wages are taxed at a flat rate. Bonuses and earnings from stock options are taxed at a flat rate of 10.23%, while all other supplemental wages are taxed at a flat rate of 6.6%. These taxes will be reflected in the withholding from your paycheck if applicable.

The city of San Francisco levies a gross receipts tax on the payroll expenses of large businesses. Although this is sometimes conflated as a personal income tax rate, the city only levies this tax on businesses themselves. Therefore, you will not be responsible for paying it.

A financial advisor can help you understand how taxes fit into your overall financial goals. SmartAsset’s free tool matches you with up to three vetted financial advisors who serve your area, and you canhave a free introductory call with your advisor matches to decide which one you feel is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.

How You Can Affect Your California Paycheck

Though some of the withholding from your paycheck is non-negotiable, there are certain steps you can take to affect the size of your paycheck. If you choose to save more of each paycheck for retirement, for example, your take-home pay will go down. That’s why personal finance experts often advise that employees increase the percentage they’re saving for retirement when they get a raise, so they don’t experience a smaller paycheck and get discouraged from saving.

Should you choose a more expensive health insurance plan or you add family members to your plan, you may see more money withheld from each of your paychecks, depending on your company’s insurance offerings.

If your paychecks seem small and you get a big tax refund every year, you might want to re-fill out a new W-4 and a new California state income tax DE-4 Form. The California DE-4 forms tells your employer how many allowances you’re claiming and how much to withhold from each of your paychecks. If you take more allowances, you might get a smaller refund but you should get bigger paychecks. Conversely, if you always owe tax money come April, you may want to claim fewer allowances so that more money is withheld throughout the year.

In the state of California your employer can’t deduct anything from your wages except what is required by state and federal law (for income taxes, for example) or what you authorize yourself (for your health insurance premiums, for example). Union workers, however, may see legal deductions that don’t fall in either of these categories if such deductions are authorized by your collective bargaining agreement. An example of this kind of deduction is a pension payment.