California Tax Guide 2026
A practical reference for California payroll taxes, brackets, and deductions in tax year 2026 — written for workers, not for tax pros.
What this guide covers
- California income-tax brackets and standard deductions for 2026.
- FICA, SDI, and the Additional Medicare tax.
- Bonus and RSU withholding rules.
- Pre-tax retirement and health-plan effects.
- What changed since 2025.
- Practical planning moves at common income levels.
California income tax: how it works in 2026
California has a progressive income tax with nine brackets ranging from 1% to 12.3%. A 1% Mental Health Services Tax surcharge adds on top of taxable income above $1 million. Your top marginal bracket applies only to the slice of income inside it — the dollars below sit in lower brackets. That\'s why your "effective" rate (total tax / total income) is always lower than the highest bracket you touch.
2026 California brackets — single filers (projected)
| Income range | Marginal rate |
|---|---|
| $0 – $11,150 | 1% |
| $11,151 – $26,430 | 2% |
| $26,431 – $41,730 | 4% |
| $41,731 – $57,920 | 6% |
| $57,921 – $73,250 | 8% |
| $73,251 – $374,150 | 9.3% |
| $374,151 – $449,000 | 10.3% |
| $449,001 – $748,400 | 11.3% |
| $748,401+ | 12.3% |
| Above $1,000,000 | +1% Mental Health surcharge |
Married filing jointly bracket cutoffs are roughly double these. Head of household has its own slightly compressed schedule.
California standard deduction
- Single / married filing separately: $5,650 (projected)
- Married filing jointly / head of household: $11,300 (projected)
The California standard deduction is far smaller than federal — only about a third — which is why even modest California incomes feel meaningful state tax. You can itemize on your California return separately from your federal return, which is sometimes advantageous.
FICA: Social Security and Medicare
FICA is federal payroll tax. It applies in California exactly as it does everywhere:
- Social Security: 6.2% of wages up to the 2026 wage base (~$181,000 projected).
- Medicare: 1.45% of every dollar.
- Additional Medicare: 0.9% on wages above $200k single / $250k joint.
Once your year-to-date wages cross the Social Security wage base, your employer stops withholding SS — meaning a high earner can see paychecks grow noticeably mid- to late-year.
California SDI: the line item that surprises everyone
State Disability Insurance is California\'s short-term disability and Paid Family Leave program. SDI is a payroll deduction — not an income tax — but it appears on every California paycheck.
As of 2024, SDI has no wage cap. The 1.2% rate applies to every dollar of wages, even at $1M+. That\'s a meaningful change from pre-2024, when the cap was around $153,000. For high earners, SDI can add $4,000–$10,000+ in annual deductions.
Bonuses, RSUs, and supplemental wages
The IRS permits employers to withhold supplemental wages at flat rates instead of using regular brackets. California adds its own flat supplemental rates on top.
- Federal supplemental: 22% (37% on portions above $1M/year).
- California: 10.23% on bonuses and stock options. 6.6% on other supplemental wages.
Combined, total withholding on a typical bonus comes to ~41% of gross. For most middle-income earners, the actual marginal rate is lower than this — meaning bonus withholding usually over-collects, which gets reconciled at filing time as a refund.
What changed from 2025 to 2026
- Brackets and standard deductions rose with California\'s annual COLA (~2–3%).
- Federal brackets and standard deductions rose with the IRS chained-CPI adjustment (~2.7%).
- FICA wage base rose roughly $5k–$8k as expected.
- SDI rate is projected to remain at 1.2% (subject to EDD adjustment).
- The federal supplemental withholding rate (22%) and California rates (10.23% / 6.6%) remain unchanged.
Practical planning at common California income levels
$50,000–$75,000
Effective rate ~17–22%. The biggest lever: contribute to a 401(k) to reduce both federal and California tax. The federal saver\'s credit may also apply at these incomes. Don\'t worry about the Roth-vs-traditional question yet; pre-tax usually wins given rising career income.
$75,000–$150,000
Effective rate ~22–28%. This is the most leveraged income tier for tax planning. Max your 401(k) ($23.5k+ projected for 2026), max your HSA if you have an HDHP, and consider a backdoor Roth IRA. Each pre-tax dollar saves roughly 28–33%.
$150,000–$250,000
Effective rate ~28–32%. You\'re crossing the California 9.3% bracket and approaching the Additional Medicare threshold. Pre-tax savings have peak leverage here because marginal rate is ~33–42%.
$250,000+
Effective rate 32%+. Standard advice converges on: max all tax-advantaged accounts, consider a Mega Backdoor Roth if your employer plan allows, optimize equity timing for long-term-capital-gains rather than short-term, and consult a CPA for entity / structure questions if you have side income.
Related calculators
Use the calculators below to apply this guide to your numbers: