Overview
California has the highest state income tax rate in the nation at 13.30%, applied to income exceeding $1 million. The state uses a progressive system with 10 brackets (including the 1% Mental Health Services Act surcharge on income over $1 million, which brings the top bracket from 12.30% to 13.30%). For most California workers earning between $70,000 and $360,000, the marginal rate is 9.30%.
California's standard deduction is notably low compared to federal levels: $5,540 for single filers and $11,080 for married filing jointly. Personal exemptions are also minimal at $144 per single filer and $446 per dependent. These low deduction and exemption amounts mean that California taxes a larger share of income compared to states that conform to federal deduction levels.
California Tax Brackets 2026
| Income Range | Tax Rate | Tax on Bracket |
|---|---|---|
| $0 - $10,756 | 1% | $108 |
| $10,757 - $25,499 | 2% | $295 |
| $25,500 - $40,245 | 4% | $590 |
| $40,246 - $55,866 | 6% | $937 |
| $55,867 - $70,606 | 8% | $1,179 |
| $70,607 - $360,659 | 9.3% | $26,975 |
| $360,660 - $432,787 | 10.3% | $7,429 |
| $432,788 - $721,314 | 11.3% | $32,604 |
| $721,315 - $1,000,000 | 12.3% | $34,278 |
| Over $1,000,001 | 13.3% | -- |
Standard Deductions and Exemptions
| Filing Status | Standard Deduction | Personal Exemption |
|---|---|---|
| Single | $5,540 | $144 |
| Married Filing Jointly | $11,080 | $288 |
| Head of Household | $11,080 | $144 |
| Per Dependent | — | $446 |
Understanding California Taxes
California does not tax Social Security benefits at the state level. However, nearly all other forms of income are fully taxable, including pension distributions, 401(k) and IRA withdrawals, capital gains, and rental income. California taxes capital gains as ordinary income, meaning gains can be taxed at the full 13.30% rate for high-income taxpayers — unlike the federal system, which caps long-term capital gains at 20%.
California also imposes a State Disability Insurance (SDI) withholding of 1.1% on wages (with no wage base cap since 2024), which appears as a separate line item on your paycheck. Combined with the income tax and federal deductions, California employees can see 35-40% or more of their gross pay withheld.
The state sales tax base rate is 7.25%, the highest base rate in the nation, with local additions bringing the average combined rate to approximately 8.85%. Groceries (unprepared food) and prescription drugs are exempt. The combination of high income tax and high sales tax gives California one of the highest overall tax burdens in the country.
Property taxes in California average about 0.71%, kept relatively low by Proposition 13 (1978), which limits assessed value increases to 2% per year and sets the base tax rate at 1% of assessed value. New homeowners are assessed at purchase price, which can result in significantly higher property tax bills compared to long-term homeowners in the same neighborhood.
California's cost-of-living index is approximately 142, about 42% above the national average. The Bay Area and Los Angeles are the most expensive regions, while the Central Valley and Inland Empire offer more affordable alternatives.
Filing Tips for California
California taxes capital gains as ordinary income — consider tax-loss harvesting and timing asset sales to minimize state tax impact
The 1% Mental Health Services surcharge applies to all income over $1 million, not just wage income — plan accordingly if you have a high-income year
SDI withholding (1.1%) has no wage base cap — high earners pay SDI on all wages, unlike Social Security which caps at $176,100
If buying a home, understand that Prop 13 assessments reset at purchase price — your property tax will be based on what you paid, not what the previous owner was assessed
State Revenue Authority
For the most current tax information, visit the official California tax authority:
ftb.ca.govRelated Calculators
Frequently Asked Questions
For educational purposes only -- not financial or tax advice. Tax rates shown are based on 2026 data and may not reflect recent changes. Consult a tax professional for your specific situation.