Employer payroll taxes in California for 2026
On top of each paycheck, a California employer pays these taxes. None of them come out of the employee's pay. On a $60,000 salary they add $4,982.00 a year, so the employee costs $64,982.00.
| Employer tax | Rate | Wages taxed |
|---|---|---|
| Social Security | 6.2% | First $184,500 |
| Medicare | 1.45% | No limit |
| Federal unemployment (FUTA) | 2.1% (includes the 1.5% credit reduction) | First $7,000 |
| California unemployment (SUTA) | 3.5% for new employers | First $7,000 |
California still owes the federal government money it borrowed to pay unemployment benefits, so its employers get a smaller FUTA credit. The Department of Labor sets the 2026 reduction in November. Until then the calculator uses its January estimate of 1.5%, due with Form 940 in January 2027.
California unemployment tax (SUTA)
California employers pay state unemployment tax on the first $7,000 of each employee's wages in 2026. A new employer starts at 3.5%, and experienced employers pay from 1.6% to 6.2% depending on their layoff history.
New employers pay 3.4% for two to three years, plus the 0.1% Employment Training Tax.
What an employee costs in California
Yearly employer taxes and total cost for a single filer paid every two weeks, at the new-employer unemployment rate, for an employer with 10 employees. Benefits and workers' compensation insurance are extra.
| Salary | Employer taxes | Total cost | Added to pay | Employee take-home |
|---|---|---|---|---|
| $30,000 | $2,687.00 | $32,687 | 9% | $25,651 |
| $40,000 | $3,452.00 | $43,452 | 8.6% | $33,159 |
| $50,000 | $4,217.00 | $54,217 | 8.4% | $40,562 |
| $60,000 | $4,982.00 | $64,982 | 8.3% | $47,807 |
| $75,000 | $6,129.50 | $81,130 | 8.2% | $57,565 |
| $100,000 | $8,042.00 | $108,042 | 8% | $72,320 |
| $125,000 | $9,954.50 | $134,955 | 8% | $86,961 |
| $150,000 | $11,867.00 | $161,867 | 7.9% | $101,166 |
Withholding from California paychecks
From the employee's pay you withhold federal income tax under the W-4, 6.2% Social Security, 1.45% Medicare and California income tax, along with CA SDI. Employees checking their own pay can use the California paycheck calculator. Running a bonus? Use the bonus payroll calculator.
California employer taxes compared with nearby states
The same $60,000 employee, at each state's new-employer unemployment rate. Of the states that border California, Arizona has the lowest employer taxes.
| State | State unemployment | All employer taxes | Total cost |
|---|---|---|---|
| California | $245.00 | $4,982.00 | $64,982 |
| Arizona payroll calculator | $160.00 | $4,792.00 | $64,792 |
| Nevada payroll calculator | $1,311.00 | $5,943.00 | $65,943 |
| Oregon payroll calculator | $1,360.80 | $5,992.80 | $65,993 |
Sources
California unemployment and program rates come from the state's own 2026 figures: edd.ca.gov, edd.ca.gov, edd.ca.gov. Federal figures follow IRS Publication 15 and Publication 15-T. See how we calculate for the withholding method.