California payroll taxes for employers

State unemployment insurance (SUTA)

Employers in California pay unemployment insurance tax on the first $7,000 of each employee's wages in 2026. New employers start at 3.4%, and rates for established employers range from 1.5% to 6.2%, based on their history of layoffs and claims.

• California also charges the Employment Training Tax (ETT) of 0.1% on the same $7,000 of wages.

State payroll programs

Employers withhold the employee share from paychecks and remit both shares to the state.

Federal taxes every employer pays

• Social Security: 6.2% from the employer and 6.2% from the employee, on wages up to $184,500 in 2026.
• Medicare: 1.45% each, with no cap. Withhold an extra 0.9% from an employee's wages above $200,000 (employee only).
• FUTA: 0.6% on the first $7,000 of each employee's wages after the normal state credit, up to $42 per employee. California is a credit reduction state: for 2025 its employers lost 1.2% of the credit, making the rate 1.8%. For 2026 the reduction could reach 5.3%; the final figure comes after November 10, 2026.