California has a reputation as a high-tax state, and at the top it is: no state taxes high incomes more heavily, and its average sales tax is among the ten highest. But the picture is more mixed for everyone else. Middle incomes face moderate income tax rates, and Proposition 13 keeps property tax rates below the national average. Here is how each tax works in 2026.
Where California tax money comes from
Share of state and local tax collections, fiscal year 2023, from the Tax Foundation.
Income tax
California taxes income in nine brackets, plus a 1% Mental Health Services Tax on taxable income above $1 million. Capital gains are taxed as ordinary income, with no lower rate. The standard deduction is $5,540 for single filers and $11,080 for married couples filing jointly, and each filer also gets a $153 personal exemption credit.
| Rate | Single: taxable income over | Married filing jointly: over |
|---|---|---|
| 1% | $0 | $0 |
| 2% | $11,079 | $22,158 |
| 4% | $26,264 | $52,528 |
| 6% | $41,452 | $82,904 |
| 8% | $57,542 | $115,084 |
| 9.3% | $72,724 | $145,448 |
| 10.3% | $371,479 | $742,958 |
| 11.3% | $445,771 | $891,542 |
| 12.3% | $742,953 | $1,000,000 * |
| 13.3% | $1,000,000 | $1,485,906 |
Brackets as published in the Tax Foundation’s 2026 state income tax table. The 13.3% rate is the 12.3% bracket plus the 1% Mental Health Services Tax, which starts at $1 million of taxable income for every filing status. * For married couples, income between $1 million and $1,485,906 is taxed at 12.3% (the 11.3% bracket plus the surcharge), and 13.3% applies above $1,485,906.
State Disability Insurance (SDI)
Most California employees pay 1.3% of their wages for SDI, which funds disability and paid family leave benefits. Since 2024 there is no wage cap, so SDI applies to every dollar of wages. Combined with the 13.3% income tax rate, the top rate on wages is 14.6%, the highest in the country.
What it adds up to
State income tax plus SDI for a single filer with no pre-tax deductions in 2026:
| Salary | State income tax | SDI | Total |
|---|---|---|---|
| $75,000 | $2,788 | $975 | $3,763 |
| $150,000 | $9,720 | $1,950 | $11,670 |
From our Paycheck Calculator. At $75,000, take-home pay is $57,830 in California, compared with $61,593 in Texas or Florida.
Sales tax
The statewide base rate is 7.25%, the highest state-level rate in the country. Cities and counties add district taxes on top, and rates above 10% are common in Los Angeles County and parts of the Bay Area. The population-weighted average combined rate is 9.03% (7.25% state plus 1.78% local), 7th highest of the 50 states and D.C.
- Exempt: most groceries and prescription drugs.
- Taxed: most other goods, including hot prepared food and restaurant meals. Most services are not taxed.
- Use tax: if you buy something from an out-of-state seller who does not collect California tax, you owe use tax at the same rate, usually reported on your state income tax return.
See how California compares with every other state in our sales tax by state guide.
Property tax and Proposition 13
- Base rate: 1% of assessed value, plus voter-approved bonds and special assessments such as Mello-Roos districts in newer developments. Total rates are often 1.1% to 1.3% of assessed value.
- Assessed value: set at the purchase price when you buy, then allowed to rise no more than 2% a year while you own the home.
- Reassessment: the home is reassessed at market value when it is sold or newly built on.
- Homeowners’ exemption: $7,000 off the assessed value of your main home, worth about $70 a year. File with your county assessor; claims filed by February 15 get the full exemption for that year.
- Proposition 19: homeowners 55 or older, severely disabled or displaced by a wildfire or disaster can move their assessed value to a new home anywhere in California, up to three times.
Across the state, homeowners pay an effective rate of about 0.70% of market value, because many assessed values sit well below current prices. A new buyer pays on the full purchase price, though: on a home bought at the $734,700 median, a 1.1% total rate means about $8,100 a year.
Other California taxes
| Tax | Rate | Who pays |
|---|---|---|
| Corporate income tax | 8.84% | C corporations |
| Vehicle license fee | 0.65% of the vehicle’s value each year | Vehicle owners, as part of registration |
| Documentary transfer tax | $1.10 per $1,000 of price (county), plus city taxes in some cities | Real estate sales |
| Estate and inheritance tax | None | — |
Frequently asked questions
What is the sales tax in California?
The base rate is 7.25% statewide. With local district taxes, the average combined rate is 9.03%, and many cities charge more than 10%.
Does California tax retirement income?
Social Security is exempt. Pensions, 401(k) and IRA withdrawals are taxed as ordinary income.
How much does Proposition 13 save?
It depends on how long you have owned your home. Because assessed values can rise only 2% a year, owners who bought decades ago may pay a fraction of the tax a new buyer pays on a similar home.
Do I pay California tax if I move out during the year?
You pay California tax on all income while you were a resident and on California-source income after you leave. Part-year residents file Form 540NR.
Last updated: November 5, 2026.
Sources
- Tax Foundation: California tax data
- Tax Foundation: State Individual Income Tax Rates and Brackets, 2026
- Tax Foundation: State and Local Sales Tax Rates, Midyear 2026
- California EDD: Payroll tax rates and withholding (SDI)
- California Franchise Tax Board
- California State Board of Equalization: Property taxes
- California State Board of Equalization: Proposition 19
- CDTFA: California city and county sales and use tax rates