How Much Do Taxes Take Out of My Paycheck in California?

Your gross earnings are subject to various withholdings before they reach your bank account. These deductions encompass both federal and state taxes, each with its own set of rules and calculations.

Federal Payroll Taxes

Federal payroll taxes contribute to various government programs. Federal income tax is a primary deduction, operating under a progressive system where higher incomes are taxed at higher rates. The specific amount withheld for federal income tax depends on an individual’s income level and the elections made on their Form W-4.

Social Security tax (Old-Age, Survivors, and Disability Insurance or OASDI) is another federal payroll tax. For 2025, employees contribute 6.2% of their earnings to Social Security, up to an annual wage base limit of $176,100. This tax helps fund retirement, disability, and survivor benefits for eligible recipients. Medicare tax, which supports hospital insurance, is withheld at a rate of 1.45% of all earnings, with no wage base limit.

For higher-income earners, an Additional Medicare Tax applies. This amounts to 0.9% on earnings exceeding certain thresholds. These thresholds are $200,000 for single filers, $250,000 for married individuals filing jointly, and $125,000 for married individuals filing separately. Employers are responsible for beginning this additional withholding once an employee’s wages surpass $200,000 in a calendar year, regardless of their filing status.

California State Payroll Taxes

California residents also have state-specific taxes deducted from their paychecks. California State Income Tax is a progressive tax, with rates increasing at higher income levels. The specific amount withheld for state income tax is influenced by an individual’s income and the elections made on their California Form DE 4. California’s state income tax rates range from 1% to 13.3%, with the highest rate including a 1% mental health services tax on income over $1 million.

California State Disability Insurance (SDI) is a mandatory contribution funding Disability Insurance (DI) and Paid Family Leave (PFL) benefits. For 2025, the SDI withholding rate for employees is 1.2% of their wages. Effective January 1, 2024, the taxable wage limit for SDI contributions was removed, meaning all wages are now subject to this tax. This adjustment can lead to higher SDI contributions for individuals with substantial earnings.

Factors Determining Withholding Amounts

Several factors influence the amount of federal and state taxes withheld from a paycheck. Gross pay is a primary determinant; higher gross income results in greater tax withholding. The frequency of pay, whether weekly, bi-weekly, semi-monthly, or monthly, also affects how per-period withholding calculations are made.

The Federal Form W-4, or Employee’s Withholding Certificate, informs employers how much federal income tax to withhold. Employees specify their filing status, such as single or married filing jointly, and can account for dependents, other income sources, or anticipated deductions. The accuracy of the information provided on this form directly impacts the amount of federal income tax withheld from each paycheck.

The California Form DE 4, or Employee’s Withholding Allowance Certificate, guides employers on state income tax withholding. This form allows employees to specify their number of allowances and any additional amounts they wish to have withheld. The choices made on the DE 4 directly influence the amount of California state income tax deducted.

Pre-tax deductions also reduce an employee’s taxable income. Contributions to certain benefits, such as 401(k) retirement plans, health insurance premiums, Flexible Spending Accounts (FSAs), or Health Savings Accounts (HSAs), are subtracted from gross pay before taxes are calculated. This reduction in taxable income can lead to a lower amount of federal and state income tax withheld.

Supplemental wages, including bonuses, commissions, or severance pay, can be subject to different federal withholding rules than regular wages. For instance, federal income tax on supplemental wages under $1 million is often withheld at a flat rate of 22% or using an aggregate method.

Reviewing Your Paystub and Withholding

Understanding your paystub helps monitor paycheck tax deductions. Paystubs itemize deductions, showing amounts withheld for “Fed Income Tax,” “CA Income Tax,” “Social Security,” “Medicare,” and “CA SDI.” Regularly reviewing these line items helps ensure accuracy and provides insight into your take-home pay.

Official withholding estimators can help determine if your current tax withholding is appropriate. The IRS Tax Withholding Estimator and the California Franchise Tax Board (FTB) Withholding Calculator are tools for this purpose. These resources can help prevent issues such as underpayment penalties or significant tax refunds, allowing you to manage your finances more effectively throughout the year.

Adjusting W-4 or DE 4 forms may be necessary following life events. Changes like marriage, the birth of a child, or a substantial change in income can alter your tax liability. Proactively updating these forms ensures that the correct amount of taxes is withheld, aligning your withholding with your current financial circumstances.