California Pay Stub,
Paycheck & Tax Guide

Everything you need to know about California payroll requirements, paycheck withholding, income tax and sales tax — all in one place.

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California Payroll & Tax Topics

California requires employers to provide employees with an itemized wage statement each pay period. This statement must clearly show gross wages, deductions, net pay, hours worked and the applicable pay period dates. Both electronic and paper formats are accepted as long as employees can easily access and review their records.

A California paycheck reflects gross pay minus federal and state tax withholding, Social Security, Medicare and any additional deductions. California's state income tax is often cited as one of the highest in the country, which directly affects take-home pay. Understanding these deductions can help employees and employers estimate net pay more accurately.

California levies a progressive state income tax, meaning the rate increases as taxable income rises. The tax applies to wages, salaries and most other earned income for residents, and to California-sourced income for nonresidents. Employers are required to withhold state income tax from employee paychecks based on the employee's filing status and withholding allowances.

California has a statewide base sales tax rate, and many cities and counties add local district taxes on top of it. Combined rates can vary significantly depending on where a purchase is made within the state. Most tangible goods are taxable, while certain items such as groceries and prescription medication are generally exempt.

California Resources

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