California Paycheck Calculator

You are registering a business in Californa but wondering about the payroll tax rates and paycheck stubs? Check out the latest tax rates, estimate paycheck. Then create your stub in a minute.

 

The vast majority of California's companies (99.2%) are considered to be small by the Small Business Association. Both employers and workers in California need to be aware of the many taxes and deductions that must be taken into account when determining payment. 

Finding out how much money an employee will take home after taxes and deductions in California is crucial for employers.

This article will cover all you need to know to use a salary and hourly paycheck calculator efficiently, including what taxes and deductions in California to take into account and helpful pointers.

Registering a Business in California in 7 Steps

Registering a business in California involves several steps, depending on the type of business structure you choose:

1. Choose a Business Structure:

• Sole Proprietorship: Simplest structure, but you are personally liable for business debts.
• Partnership: Two or more people share ownership and responsibility.
• Limited Liability Company (LLC): Offers personal liability protection and flexible management options.
• Corporation: A separate legal entity owned by shareholders.

Need to Know: S Corp vs C Corp 

2. Choose and Register Your Business Name:

• Check name availability with the California Secretary of State (SOS).
• Register your business name with the SOS (if applicable).
• Register a fictitious business name (DBA) with your county clerk (if applicable).

3. Obtain an EIN (Employer Identification Number):

• Apply for an EIN from the IRS. This is required even if you don't have employees.

4. Register Your Business with the SOS (if applicable):

• File the appropriate formation documents (Articles of Organization for LLCs, Articles of Incorporation for corporations) with the SOS.

5. Obtain Business Licenses and Permits:

• Check with the California Department of Tax and Fee Administration (CDTFA) for required licenses and permits.
• Obtain local business licenses and permits from your city or county.

6. Open a Business Bank Account:

• This is important for separating personal and business finances.

7. Other Considerations:

• Obtain business insurance.
• Set up accounting systems.
• Comply with ongoing requirements (taxes, filings, etc.).

California Tax Overview

As far as states go, California has the highest marginal income tax rate in the United States. The state of California charges the maximum federal tax rate of any state in the Union.

The high state tax rate impacts wages in California. The income tax system in California is progressive, meaning higher tax rates are applied to the highest earners. 

Local sales taxes are collected by cities in California, although local income taxes are not. For example, if you live in Sacramento or San Francisco, you can use a  Sacramento paycheck calculator or a San Francisco paycheck calculator.

Taxable Base Wage

Before 2024, only income up to $153,164 was subject to SDI withholding. With the enactment of SB 951, this limit is removed, meaning all earnings, regardless of amount, will be subject to SDI withholding from 2024 onwards.

Year	California Taxable Base Wage
2023	$153,164 yearly
2022	$145,600 yearly
2021	$128,298 yearly
2020	$122,909 yearly

SUTA Rates

The unemployment tax rate is between 1.5% to 5.9% for positive positive balance employers and 2024 California SUTA rate for negative balance employers is 6.2%. 

The rate for new businesses paying taxes is also being held steady at 3.4% percent.

Year	California SUTA Rates
2024	1.50% to 6.20%, and 3.40%
2023	1.50% to 6.20%, and 3.40%
2022	1.50% to 6.20%, and 3.40%

FUTA Rates

The first $7,000 an employee earns in taxable income each year will be subject to a 6% tax rate. If you pay unemployment insurance taxes to the state, you may be entitled to a credit of up to 5.4 percent, reducing your FUTA tax rate to 0.6 percent. 

The employer is responsible for paying FUTA tax on behalf of their employees. The tax is not the responsibility of your staff.

Year	California FUTA Rates
2024	6% for first $7000
2023	6% for first $7000
2022	6% for first $7000

💡Good to Know: If you file form 940 (FUTA tax return) federal law provides you with a 5.4 percent FUTA tax credit toward the 6.0 percent regular tax. For more information please visit

FICA Rates

In California, the FICA tax rates for 2024 are as follows:

For Employees and Employers

• Social Security Tax: 6.2% on the first $168,600 of wages
• Medicare Tax: 1.45% on all wages

Additional Medicare Tax

• For employees: 0.9% on wages exceeding $200,000 for single filers or $250,000 for joint filers.

Important Notes

• Employers and employees split the FICA tax burden equally.
• Self-employed individuals are responsible for the entire 15.3% FICA tax (including both the employer and employee portions).

 

Year	California FICA Rates
2024	7.65%
2023	7.65%
2023	7.65%

Other Taxes

Your payroll contributions may also include payments toward mandatory government programs or voluntary employee benefits. Some examples of these are workers' compensation insurance and state disability Insurance.

• The ETT rate in California for 2024 is 0.1 percent
• The SDI withholding rate in California for 2024 is 1.1 percent. Additionally, there is no wage cap for SDI withholdings in 2024, so there is no maximum amount to withhold.

For more information please visit.

Other Deductions on Paystub

As part of the payroll process, you must keep track of any paid time off that your company provides, whether for personal leave, vacation, sick leave, parental leave, or any other reason. Also, you will need to consider staff health insurance and your retirement plan. Here are some examples:

• Retirement Contributions: Money put into a 401(k) or other retirement savings plan.
• Health Insurance Premiums: The employee's portion of health insurance costs not covered by the employer.
• Life Insurance Premiums: The employee's portion of life insurance costs.
• Disability Insurance Premiums: Voluntary short-term or long-term disability insurance costs.
• Union Dues: Fees paid to a labor union.
• Charitable Contributions: Donations to charitable organizations through payroll deduction.
• Wage Garnishments: Court-ordered deductions for things like child support or unpaid debts.

 

California Payroll Taxes Withholding

Each pay period, you will deduct the amount the employee requested to be withheld from their paycheck on Form W-4, plus any additional amount the employee requested to be withheld, and send it to the IRS along with their regular federal income tax payment.

California Hourly Paycheck Calculator

“Paycheck” refers to the money you get as a salary or wage. If you want to know how much money you'll be getting after taxes, subtract that number from the gross compensation.

Scenario: Part-Time Retail Worker in Los Angeles, California

• Employee: Sarah 
• Position: Part-time Sales Associate 
• Hourly Rate: $16.50 (California minimum wage in 2024) 
• Hours Worked per Week: 25 hours 
• Filing Status: Single with 1 allowance (for herself)
• Pay Period: Bi-weekly (every two weeks)

Additional Information

• Sarah enrolled in her employer's health insurance plan and contributes $50 per pay period.
• She also contributes $25 per pay period to a 401(k) retirement plan.
• She has authorized a $10 donation to a local charity from each paycheck.

Using the California Hourly Paycheck Calculator

1. Input Hourly Rate: $16.50
2. Input Hours Worked: 50 (25 hours/week * 2 weeks)
3. Filing Status: Single
4. Allowances: 1
5. Pay Frequency: Bi-weekly
6. State: California
7. Additional Deductions:
• Health Insurance: $50
• 401(k) Contribution: $25
• Charitable Donation: $10

The California Payroll Tax Calculator Will Output:

• Gross Pay: $825.00
• Federal Income Tax (Estimated): $99.00 (This is an estimate based on a single filer with one allowance. Actual amounts may vary depending on the individual's tax situation.)
• Social Security Tax: $51.15
• Medicare Tax: $11.96
• California State Income Tax (Estimated): This amount varies greatly depending on income and filing status. A California income tax calculator can provide a more accurate estimate.
• State Disability Insurance (SDI): $9.07
• Other Deductions: $85.00 (As per the given scenario, including health insurance, 401(k), and charitable contributions.)

Net Pay (Estimated): $568.82 (This is an approximation and may vary depending on actual tax withholdings and other factors.)

 

 

California Child Support Calculator

When a parent stops living with their kid, they are responsible for paying child support.

Children who are eligible for child support programs in California must either be under 19 years of age or still attending high school. However, children with disabilities who require continued assistance from a parent beyond these age limits may need support for a longer period of time.

When determining a child's support obligation, California courts must use statewide consistent rules. Using the data you provide, the child support calculator will do the computation required by the state's universal guidelines. 

Labor Laws in California

Employer discrimination and retaliation against members of certain protected groups is illegal in California.

Moreover, employers are obligated to provide reasonable accommodations for workers experiencing pregnancy, pay all employees fairly, facilitate wage negotiations, grant employees access to their personnel records, and safeguard employees who report wrongdoing.

Good to Know: Labor Cost Calculator 2024 for Free

 

California Paystub Generator

The generator automatically calculates taxes and deductions based on California state laws and produces a professional-looking paystub that can be printed or downloaded for record-keeping purposes

GENERATE YOUR STUB NOW

Payroll processing software compiles workers' gross monthly pay, subtracts mandatory withholdings, and displays the resulting net pay to each worker.

Real Check Stubs make what would normally take hours a simple matter. This site protects you against fraudulent check stub makers.

California Tax Resources

California Department of Tax and Fee Administration

• Website: https://www.cdtfa.ca.gov
• Phone number: 1-800-400-7115
• Address: 450 N Street Sacramento, CA 95814-4311 PO Box 942879, MIC:88 Sacramento, CA.

Other Resources:

• California Employment Development Department (EDD): https://edd.ca.gov/en/payroll_taxes/rates_and_withholding/
• IRS Publication 15 (Circular E): https://www.irs.gov/pub/irs-pdf/p15.pdf
• 2024 California Employer's Guide: https://edd.ca.gov/siteassets/files/pdf_pub_ctr/de44.pdf
• EDD Tax-Rated Employers: https://edd.ca.gov/en/payroll_taxes/tax-rated-employers/

Frequently Asked Questions

To what extent does $75,000 a month in California get you?

A person earning $75,000 per year in the California area, USA, will pay taxes of $19,714. Your take-home income will be $4,607 each month.

How much do people in California have to pay in taxes?

Whether you live in California or not, if you have income from a source inside the state, you must file and pay state income taxes. The sales tax rates vary between 7.25% and 10.75%, while the income tax rate varies between 1% and 12.3%.

How do I figure up my gross pay?

To determine a worker's pay for a given time, it is necessary to first determine their yearly wage and then divide that figure by the total number of pay periods. Each pay period's gross compensation is represented by this figure. To calculate take-home pay, start with gross income and subtract mandatory deductions and payroll taxes.