How California State Taxes Work
California has the most brackets of any state, nine of them, running from 1 percent up to 12.3 percent, with an extra 1 percent surcharge on income over $1 million that pushes the true top rate to 13.3 percent, the highest in the nation. That sounds steep, but the brackets are steeply graduated, so a normal paycheck pays far less than the headline. Before the rates apply, California subtracts a standard deduction of $5,706 for single filers and $11,412 for married couples filing jointly in 2026, and after the brackets it takes a $144 exemption credit per person straight off the tax. Run a $55,000 single income through it and the California income tax is only about $1,391, an effective 2.5 percent of gross pay.
That low effective income tax is only part of the paycheck, though. The other California-specific line is SDI, covered next. Every deduction, state and federal, is itemized on your pay stub, so it pays to know what each line means.
CA SDI: The Deduction Most Calculators Get Wrong
State Disability Insurance is a California payroll deduction that funds short-term disability and Paid Family Leave. For 2026 the rate is 1.3 percent, and here's the part that trips up other calculators: since 2024 there is no wage cap. It used to stop at around $153,000 of wages, but now it applies to every dollar you earn, so a higher earner pays proportionally more. On a $54,000 salary that's about $702 a year, roughly $58 a month; on $100,000 it's $1,300 a year. A calculator that still caps SDI, or omits it, will overstate your take-home. This page and the FICA-plus-SDI math behind it use the current uncapped 1.3 percent.
No Local Income Tax, and How Hourly Pay Works
Here's a bright spot: unlike New York City, no California city charges a local income tax, so there's no extra local line on your stub in Los Angeles, San Francisco or anywhere else. If your employer offers health insurance or a 401(k), those pre-tax deductions come out before taxes are figured. On wages, California's statewide minimum is $16.90 an hour in 2026, and dozens of cities set higher local rates, with fast food and health care carrying their own minimums. California is also one of the few states with daily overtime: time and a half past 8 hours in a day, and double time past 12, on top of the usual weekly overtime. At $20 an hour, 40 hours a week is $800, about $41,600 a year, and a single filer at that rate with biweekly checks nets about $1,323 per check after CA tax and SDI.
Overtime in 2026: your overtime is withheld like normal wages all year. The federal deduction of up to $12,500 of overtime premium ($25,000 joint, through 2028) is claimed on your federal return. California starts its tax from federal income, so watch the current-year California instructions to see how the deduction flows through to the state. Your W-2 carries the amounts, explained in our guide to
overtime on the W-2 and code TT.
