California's income tax rates depend on how much you earn
California has a progressive income tax system, meaning the tax rate increases as your income increases. You pay different percentages on different portions of your income, not the same rate on all of it. The state's tax brackets change each year based on inflation.
For the 2024 tax year, California's income tax rates range from 1% on the lowest bracket to 13.3% on the highest. The exact bracket you fall into depends on your filing status (single, married filing jointly, head of household, or married filing separately) and your total taxable income. You will also owe federal income tax on top of California's state tax.
California also taxes capital gains — money you make from selling investments or property — at the same rates as ordinary income. Long-term capital gains (assets held over one year) are taxed the same way as wages and salary, which is different from the federal system.
Key Takeaways
- California income tax rates range from 1% to 13.3% depending on your income level and filing status, with rates increasing as you earn more.
- Sales tax in California is 7.25% statewide, but your actual rate depends on local taxes in your county or city, which can push the total to 8.5% or higher.
- Property tax is based on the assessed value of your home and is typically around 0.76% of that value, though rates vary by county.
- Tax brackets and rates change yearly, so the percentages that applied last year may not apply this year.
- You can find your specific tax bracket and estimated liability on the California Franchise Tax Board website or through tax preparation software.
How California sales tax works
California's base sales tax rate is 7.25%, but the actual rate you pay at checkout depends on where you live. Counties and cities add their own local sales taxes on top of the state rate. Some areas have local rates as low as 7.25%, while others reach 8.5% or higher.
Sales tax applies to most goods you buy in stores, but not to groceries, prescription medications, or medical devices. Services like haircuts, repairs, and professional fees are generally not taxed. Online purchases are taxed the same way as in-store purchases if the seller has a physical presence in California or meets certain sales thresholds.
You can look up the exact sales tax rate for your address on the California Department of Tax and Fee Administration website. Enter your ZIP code or address to see the combined state and local rate that applies to your location.
Property tax rates and how they are calculated
California property tax is based on the assessed value of your home, not the market value. When you buy a property, the county assessor sets an assessed value, and you pay tax on that amount. The statewide average property tax rate is approximately 0.76% of the assessed value, but rates vary by county.
Your property tax bill is calculated by multiplying the assessed value by the local tax rate. For example, if your home is assessed at $500,000 and your county's rate is 0.76%, your annual property tax would be around $3,800. Counties use property tax revenue to fund schools, local government, and public services.
Proposition 13, passed in 1978, limits how much the assessed value can increase each year. The assessed value can rise no more than 2% annually, even if your home's market value increases significantly. The assessed value resets to current market value only when the property is sold.
Other California taxes that affect residents
California has several additional taxes beyond income, sales, and property tax. The state imposes an excise tax on gasoline and diesel fuel, which is added to the price at the pump. This tax funds transportation and infrastructure projects.
California also taxes alcohol and tobacco products at higher rates than the federal government. Cigarettes and e-cigarettes carry a state excise tax on top of federal taxes. Alcohol purchases are subject to state excise taxes that vary by type of beverage.
Vehicle owners pay registration fees and vehicle license fees based on the vehicle's value. These are not technically taxes but function similarly. Some counties also charge vehicle license surcharges for specific purposes like transit or environmental programs.
How to find your specific tax bracket and rate
Your income tax bracket depends on your filing status and total taxable income. The California Franchise Tax Board publishes tax bracket tables each year on its website. You can download the current year's brackets for single filers, married couples, heads of household, and other statuses.
To find your bracket, add up your total income for the year, subtract any deductions you are may have access to to, and find the resulting number in the appropriate bracket table. The table will show you the tax rate that applies to that income level. Tax preparation software like TurboTax, H&R Block, or the IRS Free File program will calculate this automatically.
If you are self-employed or have investment income, your tax situation may be more complex. The Franchise Tax Board website has worksheets and guides for different income types. You can also contact a tax professional or use the Franchise Tax Board's phone line for general questions about your tax situation.
Tax deductions and credits that lower your California tax bill
California allows you to deduct certain expenses from your income before calculating tax. The standard deduction for 2024 varies by filing status: single filers get one amount, married couples filing jointly get a higher amount, and other statuses fall in between. You can take the standard deduction or itemize deductions if your itemized deductions are larger.
Common itemized deductions include mortgage interest, property taxes, charitable donations, and medical expenses above a certain threshold. California also offers tax credits for specific situations, such as the Earned Income Tax Credit for lower-income workers, the Child and Dependent Care Credit, and credits for education expenses.
Tax credits are more valuable than deductions because they reduce your tax bill dollar-for-dollar rather than reducing your taxable income. For example, a $1,000 credit saves you $1,000 in taxes, while a $1,000 deduction saves you taxes only on that $1,000 of income. The Franchise Tax Board website lists all available credits and the requirements for each.
Frequently Asked Questions
Is California's income tax higher than other states?
California's top income tax rate of 13.3% is among the highest in the nation. However, most residents pay lower rates because they fall into lower brackets. Your actual rate depends on your income level. States like New York, New Jersey, and Hawaii also have high top rates, while nine states have no income tax at all.
Do I have to pay California income tax if I moved out of state?
You owe California income tax only on income you earned while living in California. If you moved mid-year, you file as a part-year resident and pay tax only on income earned before you left. You will need to file a California return showing when you moved and where your income came from.
What is the difference between the sales tax rate I see online and what I pay at the register?
The rate you see online is usually the statewide base rate of 7.25%. Your actual rate includes local taxes added by your county and city. Look up your specific address on the California Department of Tax and Fee Administration website to see your exact combined rate.
Can I deduct state income taxes on my federal return?
You can deduct state income taxes (or sales tax) on your federal return, but only if you itemize deductions rather than take the standard deduction. The total deduction for state and local taxes combined is capped at $10,000 per year under current federal law.
When do I need to file my California tax return?
California tax returns are due on the same date as federal returns, typically April 15. If April 15 falls on a weekend or holiday, the deadline moves to the next business day. You can request an extension to October 15, but taxes owed are still due by April 15 or you will face penalties and interest.