California State Income Tax Withholding
Last Updated: January 2026
Overview
California has the highest state income tax rates in the nation, using a progressive system with nine tax brackets. The top marginal rate of 14.63% applies to income over $1 million. California also requires State Disability Insurance (SDI) withholding from employee wages.
Withholding Tax Rates
The following rates are California's withholding rates from the EDD withholding schedules (Method B — Exact Calculation). These are the rates ProPay uses to calculate state tax withholding from employee paychecks. Bracket thresholds are adjusted annually by the EDD.
> Note: Withholding rates differ slightly from California income tax return rates (1%–12.3% plus 1% Mental Health Services Tax). The withholding schedule uses higher rates to account for the tax credit applied after calculation.
Single Filers
| Taxable Income | Withholding Rate |
|---|---|
| $0 - $10,756 | 1.1% |
| $10,757 - $25,499 | 2.2% |
| $25,500 - $40,245 | 4.4% |
| $40,246 - $55,866 | 6.6% |
| $55,867 - $70,606 | 8.8% |
| $70,607 - $360,659 | 10.23% |
| $360,660 - $432,787 | 11.33% |
| $432,788 - $721,314 | 12.43% |
| $721,315 - $1,000,000 | 13.53% |
| $1,000,001 and over | 14.63% |
Married Filing Jointly
| Taxable Income | Withholding Rate |
|---|---|
| $0 - $21,512 | 1.1% |
| $21,513 - $50,998 | 2.2% |
| $50,999 - $80,490 | 4.4% |
| $80,491 - $111,732 | 6.6% |
| $111,733 - $141,212 | 8.8% |
| $141,213 - $721,318 | 10.23% |
| $721,319 - $865,574 | 11.33% |
| $865,575 - $1,442,628 | 12.43% |
| $1,442,629 - $2,000,000 | 13.53% |
| $2,000,001 and over | 14.63% |
Deductions and Exemptions
| Filing Status | Standard Deduction |
|---|---|
| Single | $5,706 |
| Married Filing Jointly | $11,412 |
| Head of Household | $11,412 |
Exemption Tax Credits
After calculating the withholding amount from the rate table above, ProPay subtracts a tax credit for each exemption claimed.
| Exemption Type | Credit Amount |
|---|---|
| Personal Exemption | $163.90 |
| Dependent Exemption | $163.90 |
State Disability Insurance (SDI)
| SDI Component | 2026 Rate |
|---|---|
| SDI Rate | 1.3% |
| Wage Ceiling | None (no cap) |
Important: California SDI has no wage ceiling. The 1.3% rate applies to all wages without limit.
Special Considerations
State W-4 Form
California requires Form DE 4 (Employee's Withholding Allowance Certificate) for state withholding. Employees should complete this form in addition to the federal W-4.
Mental Health Services Tax
An additional 1% tax applies to taxable income over $1 million. This surcharge is included in the 14.63% top withholding rate shown above.
Paid Family Leave (PFL)
California's SDI program includes Paid Family Leave benefits. The SDI withholding rate covers both disability and family leave.
Local Taxes
California does not have local income taxes, but some cities may have business taxes that affect employers.
Reciprocal Agreements
California does not have reciprocal tax agreements with other states.