The Golden State has the nation's highest tax rate. Here's exactly what you'll owe.
California levies a progressive income tax with 10 brackets, starting at 1% on your first $10,412 and climbing to 13.3% on income above $1 million — the highest marginal rate of any US state. On top of federal income tax (10–37%), California residents face a combined top rate of 50.3%.
Unlike most states, California taxes capital gains as ordinary income. A $200,000 stock sale is taxed the same as $200,000 in salary. For tech workers with equity comp, this makes tax planning — and tools like the State Tax Escape Calculator — essential.
| Taxable Income | CA Rate | Combined* |
|---|---|---|
| $0 — $10,412 | 1% | 11.0% |
| $10,413 — $24,684 | 2% | 12.0% |
| $24,685 — $38,959 | 4% | 16.0% |
| $38,960 — $54,081 | 6% | 18.0% |
| $54,082 — $68,350 | 8% | 30.0% |
| $68,351 — $349,137 | 9.3% | 31.3% |
| $349,138 — $418,961 | 10.3% | 45.3% |
| $418,962 — $698,271 | 11.3% | 46.3% |
| $698,272 — $1,000,000 | 12.3% | 49.3% |
| $1,000,001 — $1M+ | 13.3% | 50.3% |
*Combined = California + federal marginal rate. Actual effective rate is lower due to progressive brackets. Does not include 1% Mental Health Services Tax on income over $1M.
Standard Deduction: $5,540 (single) / $11,080 (married filing jointly)
Capital Gains: Taxed as ordinary income — no preferential rate. The 13.3% top rate applies.
Property Tax: Capped at ~1.1% of assessed value (Prop 13). Average effective rate: 0.71%.
Retirement: 401(k)/IRA withdrawals taxed. Social Security exempt. Roth IRA withdrawals are tax-free.
Sales Tax: 7.25% base rate (highest in US) + 0.1–3.5% local add-ons. Average combined rate: 8.68%.
Try our State Tax Escape Calculator to compare California's tax burden against every other state — including no-income-tax states like Texas, Florida, and Nevada.
California has 10 income tax brackets ranging from 1% to 13.3%. The top marginal rate of 13.3% applies to income over $1 million. Additionally, there is a 1% Mental Health Services Tax surcharge on income above $1 million. For most earners ($68,351–$349,137), the marginal rate is 9.3%.
No. California taxes capital gains (both short-term and long-term) as ordinary income. This is unique among high-tax states — most states either exclude or reduce long-term capital gains. At the top bracket, California's 13.3% rate on capital gains is the highest in the nation.
California has the highest top marginal income tax rate in the US at 13.3%. For comparison: New York tops out at 10.9%, New Jersey at 10.75%, and Hawaii at 11%. Seven states (Texas, Florida, Nevada, Wyoming, Alaska, South Dakota, Washington) have no income tax at all.
For high earners, the savings can be substantial. Someone earning $500,000 could save roughly $40,000-50,000 per year by moving to a no-income-tax state. However, consider: California's higher salaries (especially in tech), property prices in destination states, lifestyle changes, and the FTB's aggressive audit of suspected incomplete moves.
California allows a standard deduction of $5,540 (single) or $11,080 (married filing jointly) for 2025. Itemised deductions generally follow federal rules but California does NOT allow deductions for state/local taxes paid (SALT). California also has renter's credit ($60 single / $120 joint) for qualifying taxpayers.
Yes. California fully taxes 401(k), Traditional IRA, and pension withdrawals as ordinary income. Social Security benefits are exempt from California state tax. Roth IRA withdrawals are tax-free at both federal and California state level — making Roth conversions especially valuable for California retirees.