California Payroll Compliance
Every rate, wage base, and threshold California employers need for 2026 — sourced from the EDD and FTB, with the local ordinances that override the state rate.
Minimum Wage & Hours
California’s statewide minimum wage is $16.50/hour for all employers in 2026, regardless of size. California does not allow a tip credit — tipped employees must receive the full minimum wage before tips. Many cities and counties set higher local minimums (see below).
| Item | 2026 Value | Notes |
|---|---|---|
| Statewide minimum wage | $16.50/hr | All employers; annual CPI adjustment |
| Tipped minimum wage | $16.50/hr | No tip credit permitted in California |
| Overtime threshold | 8 hrs/day | Daily OT — 1.5x after 8, 2x after 12 |
| Exempt salary minimum | $68,640/yr | 2x state minimum wage, full-time |
| Pay frequency | Semi-monthly | At minimum; specific paydays required |
Local Minimum Wage Exceptions
Over 30 California cities and counties set minimum wages above the state floor. These override the state rate for hours worked within that locality. A selection of the highest:
State Income Tax Withholding
California personal income tax (PIT) is withheld using either Method A (wage bracket) or Method B (exact calculation), published annually by the EDD. New hires must complete federal Form W-4 and California Form DE 4.
| Item | 2026 Value | Notes |
|---|---|---|
| Withholding methods | A & B | Wage bracket or exact calculation |
| Supplemental wage rate | 6.6% | 10.23% for bonuses & stock options |
| Required certificate | DE 4 | In addition to federal W-4 |
| Top marginal PIT rate | 13.3% | Plus 1% mental health surcharge over $1M |
State Disability Insurance (SDI) & Paid Family Leave
California’s SDI program funds both Disability Insurance and Paid Family Leave through a single employee payroll deduction. For 2026, the rate is 1.3% with no wage cap since SB 951 removed the ceiling, so high earners contribute on every dollar.
| Item | 2026 Value | Notes |
|---|---|---|
| SDI withholding rate | 1.3% | Up from 1.2% in 2025 |
| Wage cap | None | Removed by SB 951 (eff. 2024) |
| Who pays | Employee | Withheld; employer remits to EDD |
| Max weekly benefit | $1,765 | Funds DI + PFL |
| W-2 reporting | Box 14 | Label as CASDI |
Unemployment Insurance (SUI) & ETT
California’s UI taxable wage base remains $7,000 per employee. For 2026 the EDD moved to Schedule F+ (Schedule F plus a 15% emergency surcharge), with experience-rated employer rates from 1.5% to 6.2%.
| Item | 2026 Value | Notes |
|---|---|---|
| UI taxable wage base | $7,000 | Per employee, per year |
| Rate schedule | Schedule F+ | F plus 15% emergency surcharge |
| Experienced rate range | 1.5%–6.2% | Based on reserve account |
| New employer UI rate | 3.4% | First 2–3 years |
| ETT rate | 0.1% | On first $7,000; positive reserve only |
| Rate notice | DE 2088 | Mailed late December |
Official California .gov Resources
Verify every figure and register for accounts at the source. These are the agencies California employers interact with for payroll.