California has 9 progressive tax brackets ranging from 1% to 12.3% (plus 1% Mental Health Services Tax on income over $1 million). The rate depends on your taxable income and filing status. California has the highest state income tax rate in the nation for high earners.

State Disability Insurance (SDI) is a mandatory California payroll tax that funds short-term disability benefits and Paid Family Leave. The 2026 rate is 1.1% on wages up to $153,164. It's deducted from employee wages (not an employer tax).

No, California does not have local or city income taxes. You only pay federal income tax and California state income tax. However, some cities have business taxes and sales taxes vary by location (7.25% state minimum + local additions).

Maximize pre-tax contributions: 401(k) up to $23,500, HSA if eligible, FSA for healthcare/dependent care. California conforms to most federal deductions. Consider traditional IRA contributions, mortgage interest deduction, and charitable donations to reduce taxable income.

California's 2026 standard deduction is approximately $5,540 (single/MFS) or $11,080 (married/HOH). This is much lower than the federal standard deduction. California also offers personal exemption credits of about $144 per person.

FICA = Social Security (6.2% on first $176,100) + Medicare (1.45% on all wages). High earners pay Additional Medicare Tax of 0.9% on wages over $200,000 (single) or $250,000 (married). Your employer matches the 6.2% SS and 1.45% Medicare portions.

Gross pay: Total earnings before any deductions. Net pay (take-home): What you actually receive after federal tax, state tax, FICA, SDI, and any voluntary deductions (401k, health insurance). Net is typically 65-80% of gross depending on income level.

California has among the highest state income taxes (up to 13.3% including mental health tax). The state has no local income tax, but makes up for it with high state rates. High earners (over $70K) hit the 9.3% bracket quickly. Consider maximizing pre-tax retirement contributions to reduce taxable income.

California uses Form DE-4 for state withholding. Each allowance reduces the amount withheld from your paycheck. Claim fewer allowances if you're underwithholding (owe at tax time) or more if you're overwithholding (getting large refunds). Most employees claim 1-2 allowances.

California has high income taxes but no estate/inheritance tax, relatively moderate property taxes (due to Prop 13), and no local income taxes. For high earners, California is expensive. For moderate incomes, the overall tax burden is comparable to many states. Sales tax (7.25%+ with local) is also high.