Income tax withholding
| Imposes wage income tax | Yes |
|---|---|
| Rate structure | Graduated, top marginal rate 13.3% |
| Withholding certificate | DE 4 Employee's Withholding Allowance Certificate |
| Accepts federal Form W-4 | No |
| Convenience-of-the-employer rule | No |
| Nonresident withholding threshold | not confirmed of in-state wages No day-count safe harbor. California PIT withholding is required once wages exceed the Low Income Exemption amount in the EDD withholding schedules (DE 44 / Method B), which varies by filing status and is adjusted annually -- exact 2026 figure not verified here, consult the current DE 44. |
| Local income taxes | No No local personal income tax on employees. San Francisco imposes an employer-paid Payroll Expense / Gross Receipts tax and several localities impose employer-side business taxes, but none are withheld from employee wages. |
Reciprocity
States that exempt California residents
A California resident working in these states files that state's certificate and is taxed only by California.
Unemployment insurance and paid leave
| Taxable wage base 2026 | $7,000 2025 base was $7,000. |
|---|---|
| New employer rate | 3.4% |
| Experience rate range | 1.5% – 6.2% |
| Experience-rating method | reserve ratio |
| Employee UI contribution | No |
| Paid family / medical leave | Yes California SDI (which funds both State Disability Insurance and Paid Family Leave) is employee-funded at 1.30% for 2026 with NO taxable wage limit. Employers make no SDI/PFL contribution. |
Employer registration
- Tax agency
- California Employment Development Department (payroll tax and PIT withholding)
- UI agency
- California Employment Development Department (EDD)
Sources
edd.ca.gov · cost.org · taxfoundation.org · oui.doleta.gov · oui.doleta.gov · oui.doleta.gov · edd.ca.gov