The state of California charges employers for various taxes as part of employment. These include:
Unemployment Insurance (UI)
California’s Employment Training Tax (ETT)
Additionally, if you’re an employer, you may also be required to withhold certain amounts from employees’ paychecks, including:
State Disability Insurance (SDI) – which is a tax paid by employees only.
Federal Income Tax (FIT), sometimes referred to as personal income tax
Depending on your company’s payroll size, there may be additional obligations to meet.
For 2026, here are the rates and wage bases that employers must know:
Social Security: 6.2 percent for both employee and employer up to $184,500.
Medicare: 1.45 percent each employee and employer, with no wage base cap.
Employee Additional Medicare: 0.9 percent for employees earning more than $200,000 per year
Federal Unemployment Tax Act (FUTA): 6 percent for the first $7,000 in wages you pay each employee in the calendar year. The amount of FUTA you owe can be adjusted for the current year based on how much you pay in UI and other employer-side taxes. You’ll need this number to determine the rate at which you pay UI taxes.
California State Disability Insurance (SDI): 1.3 percent of all wages subject to SDI withholding. However, this doesn’t have a maximum limit on wages; instead, it applies to all wages that would be subject to SDI withholding, such as commissions, bonuses, overtime, and so forth.
What Is a California Employer Payroll Tax Calculator?
A California employer payroll tax calculator is essentially an online tool designed to help businesses compute the total amount they’ll owe in California payroll taxes. It processes inputs about your business’s pay period, the types of pay and deductions you offer employees, and other factors before calculating how much money will flow through your business’s accounts.
How Does the Payroll Tax Calculator Work?
In general, a payroll tax calculator takes the following inputs into account:
Pay details – including gross wages, any voluntary deductions or additions, and the number of days worked during the pay period
Exemptions – the number of exemptions claimed by your employees on their W-4 form
Federal information – such as whether your employees are exempt or nonexempt, and whether you pay any bonuses
State information – whether you have any supplemental wages and how many employees work for you
Locale information – the location where you operate your business, as well as your state
Voluntary deductions – such as contributions to health insurance, retirement savings plans, or similar benefits offered by your employer
Using this data, the payroll tax calculator will estimate your net pay, the federal income tax withheld from your paycheck, the amount of SDI withheld, and how much your employer owes in payroll taxes for 2026.
Known Limitations
The results from a payroll tax calculator should be considered planning estimates only, rather than definitive calculations. They do not constitute advice regarding payroll tax, legal, or accounting matters.
The results assume your business pays wages only within California, doesn’t operate multiple locations, and isn’t subject to special rules under the federal law. Additionally, local taxes may affect your overall liability, particularly in cities like San Francisco and Oakland.
You may also want to consider how multi-state rules apply. For instance, if your business operates outside of California, it could be affected by additional rules, or some of its operations could be treated differently for purposes of California law.
Other factors that might affect the accuracy of these estimates include:
Whether you claim wage-type exemptions
Whether taxable fringe benefits are included
Whether you use the Supplemental Wage Treatment
Whether you have made a DE 4/W-4 election
Whether pre-tax deduction eligibility exists for your employees
If you’re unsure whether your company has been assigned a specific UI rate, refer to the notice sent by the state labor agency. Otherwise, you can expect to file quarterly reports to report your wages and calculate how much you owe in payroll taxes.
How California Employers File and Pay State Payroll Taxes
To actually file and pay California’s state payroll taxes, employers use the EDD’s online platform, e-Services for Businesses. Using this platform, California employers can:
File their wage reports
Make payments
Update their payroll tax accounts
Register new employers, close existing ones, or re-open them
Report employees hired during the quarter
Report independent contractors who were newly added
The site allows employers to download a sample report, as well as instructions for preparing one, from the site. Employees will need to provide a government-issued ID with their Social Security number, but you don’t need to collect this from them directly.