Use our free California paycheck calculator to calculate your net pay or take-home pay using your period or annual income along with the required federal, state, and local W4 information. California imposes a state income tax ranging between 1% and 13.30%. However, no county, city, or municipality is allowed to charge local income tax.
California, The Golden State, is one of the biggest States of the United States, in both means of area and population. From World Tallest Trees to beautiful National Parks, From Stunning beaches to adventurous hiking trails, from beautiful weather to delicious food, this state has plentiful to offer.
Apart from all these perks, this state is among the costliest states, having a Cost of Living Index of 127.1. Especially cities like San Francisco and Los Angeles are the most desirable areas to live in California and are counted among the priciest cities across the nation.
For working in California, there are tremendous business and job opportunities available for new residents. This state houses some of the notable industries, including entertainment, trade, tourism, agriculture, and technology.
The Golden State has a gross state product of $2.7 trillion, and its GDP would have ranked the 5th highest if it were a country.
So, if you are planning to settle here and start a new business or job, then the first and foremost thing you need is to plan out or forecast your earning. As an employer, you need to know what would be your business cost and taxes, including employee's expenses. On the other hand, even seeking for a job in California, you need to know your take-home pay.
Calculating the Take-Home pay could be a tricky job, you need to keep track of various components of a paycheck, and a single mistake could have a significant impact. Therefore, you are suggested to use our California Pay-check Calculator to get your work done in seconds. So, without wasting your time any further, let move on to our Step by Step Guide that would educate you about the things required in paycheck calculations.
The following are the steps that every employee and employee needs to consider to calculate paycheck for Hourly or fixed salary while working in California.
The first and foremost thing to calculate the paycheck is to determine the Pay Type. It is whether the employee is paid on:
California State and Federal Laws on Pay Type:
The second step is to determine the Pay Frequency of your Paycheck; it is how often the employees are paid. All States have their law for pay frequencies. Therefore, you must study the State Payroll law (discussed below in this step) before calculating the paycheck.
Some of the standard Pay Frequencies are:
Pay Frequency | Details |
---|---|
Weekly | The employees are paid once a week. |
Bi-Weekly | The employees are paid once every two weeks. |
Semi-Monthly | The employees are paid twice a month. Usually on the 15th and 30th day of the month. |
Monthly (Discouraged by California State) | The employees are paid once every month. Mostly at the start or end of the month. |
Quarterly (Discouraged by California State) | The employees are paid after every three months. |
Annually (Discouraged by California State) | The employees are paid once a year. |
California State Laws for Pay Frequencies:
The third step is to determine the Gross Pay of the employee. Gross Pay is the amount of money an employee has earned in the last pay period. It consists of several components that are essential to consider to calculate Income Taxes, Deductions, and contributions. Below are the essential components to deduce gross pay:
Note: We provide multiple calculators to calculate Total Hours Worked and Overtime that you can use to calculate your Paycheck. They are as follow:
*Fringe Benefits:
Fringe benefits are the benefits offered by employers to employees who meet specific criteria set by the company. These benefits are often taxable and can affect the employee's paycheck.
The Fringe benefits are often deducted from employee’s Paycheck by Specific Dollar Amount or Percentage of the Gross Pay.
Some of the common Fringe Benefits are:
To calculate the Gross Pay accurately, you must know the State and Federal Wage Laws. Some of them are as follows:
California State and Federal Laws on Gross Pay:
Note: there are some further exceptions to this law, for which you can refer to California’s official website.
Here starts the complicated part. After the Gross Pay for the employee is deduced, the next thing an employer should do is refer to the W-4 tax form of an employee. This form is filled by the employee while joining the job.
Note:
The form W4 contains all the essential details, including income tax details, marital status, and the number of allowances to be claimed. These details are required to calculate the Taxable Income, Federal Taxes, Allowances, State Taxes, and Local Taxes, that the employer has to withhold from the employee's salary.
Note: As IRS has made changes in the Tax Form W4, which would be effective from January 2020. Therefore, all the following steps are according to the new form.
There is a total of four filing statuses, from which the employee has to choose one. These are the following:
Note: You can select "Single" as Marital Status on the California Paycheck Calculator if the employee is "Single" or "Married filing separately." Else Choose "Married" if the employee is "Married Filing Jointly" or "Head of Household."
Taxable income is the income, which is used to determine the amount of taxes that should be withheld from the employee’s paycheck by the employer. It is different from Gross Pay.
There is the portion of income that is exempted from the taxes, such as cash gifts, inheritances, rebates, Welfare income, child support, State and local tax refunds, Life insurance, etc. This portion can be determined and claimed by the taxpayer (employee) by using "itemized deductions."
As the "itemized deductions" process is too long, the Taxpayer can also go for “standard deductions (a specific amount defined by the government to be deducted from Gross Pay according to taxpayer’s filing status” instead, for calculating the Taxable Income.
Standard Deduction amount for 2018 to 2025 is as follow:
Filing Status | Standard Deduction Amount |
---|---|
Single | $12,000 |
Married Filing Separately | $12,000 |
Married Filing Jointly | $18,000 |
Head of Household | $24,000 |
Qualifying Widow(er)s | $24,000 |
To determine the Taxable income, the taxpayer (employee) has to:
Note: This is just a general overview of Taxable Income. Many other factors need to be considered for Taxable income determination. Moreover, the criteria can be different from person to person. You must refer to your Lawyer, or study Taxable income in detail for calculating the accurate Taxable Income.
As of now, the taxable income of an employee is deduced. The next step is to subtract any pre-tax contributions that were chosen by the employee. These contributions are designed to encourage employees to save for their retirement. Additionally, it further reduces the amount of taxable income, hence, increasing the take-home amount of an employee.
However, not all contributions are exempted from all taxes, but only from federal income tax. Therefore, some employees may have to pay FICA, state, or other taxes on such contributions.
Following are some of the common contributions that an employee can choose:
Before jumping on to Federal Taxes, it is essential to conclude the number of Allowances that an employee needs to claim.
Allowances are exemptions from paying a certain amount of income tax. Therefore, the amount of withholding tax that an employer withholds from the employee’s paycheck is inversely proportional to the number of allowances claimed.
|
|
---|---|
Situation | Number of Allowances to claim |
The taxpayer depends on someone | 0 to 1 Allowance |
Single – One Job – Taxpayer doesn't depend on anyone | 1 to 2 Allowances |
Married Couple with no dependents | 2 |
Head of Household with one dependent | 3 |
A married couple with one dependent | 3 |
A married couple with two dependent | 4 |
The employee in form W4 already fills details of claimed allowances. The employee must do a complete working before filling out the details for the number of allowances he/she needs to claim as claiming extra Allowances may cause underpayment of taxes that results in a penalty by the IRS. On the other hand, claiming fewer Allowances is like lending money to IRS without any benefit.
|
||
---|---|---|
Situation | Effects on Federal Withholding Taxes | Consequences |
To many Allowances claimed | ·Withholding Federal Tax decreases ·Take-Home Pay Increases ·The taxpayer may owe money to IRS | ·Tax Payer has to pay the pending tax amount along with penalties |
Too few Allowances claimed | ·Withholding Tax Federal increases ·Take-Home Pay decreases ·IRS may owe money to the taxpayer, for which | ·Tax Payer is likely to receive a refund ·Tax Payer may have less money to spend the whole year until the refund is received |
Details on how many allowances an employee must claim are provided here.
Once the final taxable income is calculated after subtracting all deductions (standard or itemized) and contributions, a certain amount is withheld by the employer from an employee's paycheck as federal income tax, along with the two federal (FICA) programs: Social Security and Medicare.
This Federal Income Tax rate is applied at a gradual level, ranging from 0% to 37% of taxable earnings. The Tax rate depends on the filing status, number of Allowances claimed, and taxable income.
Therefore higher the income, the higher the federal tax rate, and the higher the number of Allowances claimed, the higher the Net Pay (Take-home Pay).
These rates are as follow:
Taxable Income | Rate |
---|---|
$0 - $9,700 | 10% |
$9,700 - $39,475 | 12% |
$39,475 - $84,200 | 22% |
$84,200 - $160,725 | 24% |
$160,725 - $204,100 | 32% |
$204,100 - $510,300 | 35% |
$510,300+ | 37% |
Taxable Income | Rate |
---|---|
$0 - $19,400 | 10% |
$19,400 - $78,950 | 12% |
$78,950 - $168,400 | 22% |
$168,400 - $321,450 | 24% |
$321,450 - $408,200 | 32% |
$408,200 - $612,350 | 35% |
$612,350+ | 37% |
Taxable Income | Rate |
---|---|
$0 - $9,700 | 10% |
$9,700 - $39,475 | 12% |
$39,475 - $84,200 | 22% |
$84,200 - $160,725 | 24% |
$160,725 - $204,100 | 32% |
$204,100 - $306,175 | 35% |
$306,175+ | 37% |
Taxable Income | Rate |
---|---|
$0 - $13,850 | 10% |
$13,850 - $52,850 | 12% |
$52,850 - $84,200 | 22% |
$84,200 - $160,700 | 24% |
$160,700 - $204,100 | 32% |
$204,100 - $510,300 | 35% |
$510,300+ | 37% |
In addition to the Federal Income Tax, Employers are also abided to withhold an amount from the employee’s paycheck for FICA Tax (Federal Insurance Contributions Act). These taxes are used to help American citizens with retirement, disability, survivorship, and medical treatment.
FICA Tax comprises of:
A total of 12.4% of FICA tax is paid for Social Security, by both employee and employer. Here 6.2% is paid by the employee and remain 6.2% is funded by the employer. However, the Social Security tax is only applicable to the first $132,900 earned. No amount is charged above this earning,
1.45 percent each is paid to Medicare by both employee and employer. Moreover, if the taxpayer (employee or employer) earns more than $200,000 as a single filer or $250,000 as a married couple than additional Medicare taxes of 0.9% are to be paid.
Note: If you are calculating your federal taxes as an employer, you have to add FUTA unemployment taxes in addition to FICA taxes, which is 6% of the first $7,000 of each employee’s taxable income. Moreover, you can also claim a tax credit of up to 5.4% for state unemployment tax you pay, only if you pay on time and in full.
California State Laws on Federal Income Tax:
Now, as you are done with Federal Payroll Taxes, the next thing that you need to calculate is California State Taxes. The State of California’s Employment Development Department requires the employer to withhold four types of taxes, from which half are to be withheld from the employee's paycheck, and the rest is to be paid by the employer itself. To deduce the actual percentages of the taxes, you can refer to the Employment Development Department Website.
Generally, the following are the taxes required by California State:
This tax is charged to California residents as well as those nonresidents who derive income within California. This taxed is based on the filing status, income, and the number of allowances claimed by the employee in on the W-4 or DE 4 form.
California Taxable Income | Rate |
---|---|
$0 - $8,544 | 1.0% |
$8,544 - $20,255 | 2.0% |
$20,255 - $31,969 | 4.0% |
$31,969 - $44,377 | 6.0% |
$44,377 - $56,085 | 8.0% |
$56,085 - $286,492 | 9.3% |
$286,492 - $343,788 | 10.3% |
$343,788 - $572,980 | 11.3% |
$572,980+ | 12.3% |
California Taxable Income | Rate |
---|---|
$0 - $17,088 | 1.0% |
$17,088 - $40,510 | 2.0% |
$40,510 - $63,938 | 4.0% |
$63,938 - $88,754 | 6.0% |
$88,754 - $112,170 | 8.0% |
$112,170 - $572,984 | 9.3% |
$572,984 - $687,576 | 10.3% |
$687,576 - $1,145,960 | 11.3% |
$1,145,960+ | 12.3% |
California Taxable Income | Rate |
---|---|
$0 - $8,544 | 1.0% |
$8,544 - $20,255 | 2.0% |
$20,255 - $31,969 | 4.0% |
$31,969 - $44,377 | 6.0% |
$44,377 - $56,085 | 8.0% |
$56,085 - $286,492 | 9.3% |
$286,492 - $343,788 | 10.3% |
$343,788 - $572,980 | 11.3% |
$572,980+ | 12.3% |
California Taxable Income | Rate |
---|---|
$0 - $17,099 | 1.0% |
$17,099 - $40,512 | 2.0% |
$40,512 - $52,224 | 4.0% |
$52,224 - $64,632 | 6.0% |
$64,632 - $76,343 | 8.0% |
$76,343 - $389,627 | 9.3% |
$389,627 - $467,553 | 10.3% |
$467,553 - $779,253 | 11.3% |
$779,253+ | 12.3% |
|
|
---|---|
Filing Status | Exemption Amount |
Single | $4,236 |
Married Filing Separately (Same Return) | $4,236 |
Married Filing Separately (Different Return) | - |
Married Filing Jointly | $8,472 |
Head of Family | $8,472 |
Qualifying Widow(er) | $8,472 |
California State also offers Tax credits/deductions to the eligible individuals. The eligibility criteria depend on the filing status and other conditions.
Make sure to refer to the official site of California State, to read the eligibility criteria. Maybe you are lucky enough to reduce your State payroll taxes further.
This tax provides temporary benefit payments for non-work-related disabilities to the workers. The state requires the employer to withhold 1% of taxable wages form the employee's paycheck for SDI on the first $118,371 in wages paid within the calendar year to each employee. However, the maximum allowable tax is $1,183.71 per year.
This tax is issued by the U.S. Department of Labor and is to be paid by the employer. The rate for UI Tax is 6.2% on the first $7,000 in wages in a calendar year. However, new employees get to relief by paying 3.4% for the first two to three years.
This Tax is also known as funding for training and is required to be paid by the employer. The ETT is paid at the rate of 0.1 on the first $7,000 in wages paid to each employee in a single year. Based on current wage rate in California, the maximum ETT amount is $7 per employee per year.
California State Laws on State Income Tax:
Although employees are not charged any post-tax deductions. However, they can choose some post-tax contributions and benefits. If an employee has opted some, then its employer's duty to account them into the employee's paycheck.
Some of the common Post-Tax Contributions are:
Once you have calculated all the details, as discussed above, then it's time to enter all your details into our Arkansas Paycheck Calculator and deduce the paycheck “Net Pay” amount instantly.
Answer: The exact tax amount that is to be deducted from your paycheck can only be deduced according to your filing status, number of Allowances, income, and several other factors. However, giving you a general idea, the following taxes would be deducted:
Answer: California income tax rate for 2024 ranges from 1% to 12.3%, depending on your filing status, income, and number of Allowances claimed.
Answer: SUTA (State Unemployment Tax Act) Tax rate is 3.4% in California.
Answer: California State requires the employer to pay the wage within 72 hours to the employee, if fired or has provided the (at least 72 hours) notification of voluntarily leaving the job.
Answer: If your paycheck is late, then you are entitled to receive a full day of wages at your regular rate for a maximum of 30 days as a waiting time penalty.
Answer: Yes, California has the highest TOP tax rates of 12.3%.
Answer: Following are some of the taxes that an employer is responsible for paying: