California has the highest top income tax rate among all states
California's top marginal income tax rate is 13.3%, the highest in the nation. This rate applies to income above a certain threshold that changes each year—for 2024, it kicks in at $68,702 for single filers. The rate has been in place since 2012, when voters approved Proposition 30 to fund education and healthcare.
However, "highest rate" does not mean you pay that rate on all your income. California's tax system is progressive: you pay lower rates on your first dollars earned, then higher rates as your income climbs. A single person earning $50,000 pays a much lower effective rate than someone earning $500,000.
Other states come close. Hawaii's top rate is 11%, and Oregon's is 9.9%. New York's top rate is 10.9%, but only on income above $25 million. The difference between these states matters most if you earn high income; for middle-income earners, the gap narrows considerably.
Key Takeaways
- California's 13.3% top rate is the highest in the country, but it only applies to income above roughly $68,700 for single filers in 2024.
- Income tax is progressive in every state, meaning you pay lower rates on lower income and higher rates only on income above certain thresholds.
- Hawaii (11%), New York (10.9%), and Oregon (9.9%) have the next-highest top rates, but the income levels where those rates begin vary widely.
- Your actual tax bill depends on your total income, filing status, and deductions—not just the top rate your state publishes.
How California's tax brackets work in practice
California divides income into brackets. For 2024, a single filer pays 1% on the first $10,099, then 2% on income from $10,100 to $23,942, and so on, stepping up through nine brackets until reaching 13.3% on income above $68,702. The brackets adjust annually for inflation.
This means a single person earning $40,000 does not pay 13.3% on all of it. They pay 1% on the first $10,099, 2% on the next portion, and so on, reaching maybe 6% or 7% on their top dollars. Their effective tax rate—the actual percentage of total income paid in tax—is much lower than 13.3%.
A person earning $100,000 does pay the 13.3% rate, but only on income above $68,702. The first $68,702 is taxed at the lower bracket rates. This is why two people in the same state can have very different tax bills even though they live under the same top rate.
Why California's rate is so high compared to other states
California's 13.3% rate came from Proposition 30, passed in 2012. Voters approved a temporary increase in the sales tax and a permanent increase in income tax on high earners to fund schools and healthcare during the recession. The income tax increase was meant to expire after seven years, but voters extended it in 2016 through 2030.
The state also has no cap on how much income tax you can pay. Some states with high top rates have limits—for example, a maximum dollar amount or a cap on how much of your income can be taxed. California does not. A person earning $10 million pays the 13.3% rate on all income above the threshold.
California's high rate also reflects the state's spending priorities. The state funds public education, healthcare programs, and social services at levels higher than many other states, and income tax is the primary funding source.
Comparing California to other high-tax states
| State | Top Income Tax Rate | Income Level Where Top Rate Begins (2024, Single Filer) |
|---|---|---|
| California | 13.3% | $68,702 |
| Hawaii | 11% | $48,875 |
| New York | 10.9% | $25,000,000 |
| Oregon | 9.9% | $7,300 |
| Minnesota | 9.85% | $188,400 |
Hawaii's 11% rate looks close to California's, but it begins at a much lower income level—$48,875 for single filers. This means more of a middle-income person's earnings are taxed at the higher rate in Hawaii than in California.
New York's 10.9% rate is high, but it only applies to income above $25 million. Very few people reach that threshold, so the rate affects a tiny portion of the population. Oregon's 9.9% rate begins at just $7,300, meaning it hits middle-income earners faster than California's does.
Effective tax rates—what people actually pay as a percentage of income—vary by state and income level. A middle-income earner in Oregon might pay a higher effective rate than someone in California earning the same amount, because Oregon's top rate kicks in earlier.
States with no income tax
Nine states have no income tax at all: Alaska, Florida, Nevada, South Dakota, Tennessee, Texas, Washington, Wyoming, and New Hampshire (which taxes only dividends and interest, not wages). These states fund government through sales tax, property tax, and other sources.
Moving to a no-income-tax state can lower your tax bill significantly if you earn high income. However, these states often have higher sales taxes or property taxes to compensate. A person earning $50,000 might pay less total tax in Texas than California, but someone earning $200,000 might pay more in Texas due to higher sales and property taxes.
What affects your actual tax bill beyond the top rate
Your state income tax bill depends on more than just the top rate. Deductions, credits, and filing status all matter. California allows a standard deduction (roughly $5,200 for single filers in 2024) or itemized deductions, whichever is larger. Credits for dependent children, education expenses, and other circumstances reduce your tax owed.
Some states offer tax credits that California does not, and vice versa. A parent with two children might pay less in a state with a generous child tax credit, even if that state's top rate is higher than California's. Your actual bill requires looking at your specific situation, not just comparing top rates.
Federal income tax is separate from state income tax. You pay both. Your federal tax bill does not change based on which state you live in, but your combined federal and state bill does. A high earner in California pays more total income tax than a high earner in Texas, but the difference is smaller than California's state rate alone suggests.
Frequently Asked Questions
Does California's 13.3% rate apply to everyone who lives there?
No. The 13.3% rate only applies to income above roughly $68,702 for single filers in 2024. Lower income is taxed at lower rates. People earning under $10,099 pay 1%. People earning $30,000 pay rates ranging from 1% to about 4% on their income.
If I move to a no-income-tax state, will I definitely pay less tax?
Not necessarily. States without income tax usually have higher sales taxes or property taxes. If you earn high income and own property, you might pay more total tax in a no-income-tax state. The answer depends on your income level, whether you own a home, and how much you spend.
Can California's income tax rate change?
Yes. The current 13.3% rate is scheduled to expire on December 31, 2030, unless voters extend it again. The state legislature can also propose changes, though they require voter approval for tax increases. Rates have changed several times since California's income tax began in 1935.
How does California's rate compare to federal income tax?
Federal income tax has a top rate of 37%, but that applies only to income above $578,100 for single filers in 2024. Most people pay federal rates between 10% and 24%. You pay both federal and state tax. A high earner in California pays up to 13.3% state plus up to 37% federal, for a combined top rate of 50.3%.
Do I pay California income tax if I work remotely for a company in another state?
If you live in California and work remotely, you owe California income tax on your wages, regardless of where your employer is located. California taxes income earned by residents, not just income from California sources. If you move out of state, you stop owing California tax on wages earned after you leave.