California paychecks in 2026: what changed
California's 2026 withholding tables, SDI rate and minimum wage are below.
The changes
- New federal withholding tables. The IRS updated Publication 15-T for 2026, including changes from the 2025 tax law. The standard deduction is $16,100 single, $32,200 married filing jointly, and $24,150 head of household.
- Social Security wage base: $184,500 (up from $176,100). If you earn more, Social Security stops later in the year.
- Tips and overtime deductions for 2025–2028 — see below.
- SDI: 1.3% of all wages, with no wage limit.
- Minimum wage: $16.90 from January 1, 2026 (up from $16.50 in 2025).
- Withholding: the 2026 EDD tables use a yearly standard deduction of $5,706 or $11,412 and a credit of $168.30 per regular allowance.
Tips and overtime in 2026
New federal deductions apply for 2025 through 2028: up to $25,000 for qualified tips, and up to $12,500 ($25,000 for joint filers) for the extra "half" of time-and-a-half overtime. Both phase out above $150,000 of income ($300,000 joint).
These are deductions on your tax return. Your employer still takes Social Security and Medicare out of tips and overtime, and still withholds income tax unless you tell it otherwise. If you expect to claim them, you can put the expected amount in Step 4(b) of your W-4 (and in the Step 4(b) box above) so less income tax is withheld during the year.
Work out your 2026 California paycheck →
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Sources
- IRS Publication 15-T (2026), Federal Income Tax Withholding Methods — Worksheet 1A and the annual percentage-method tables
- IRS Publication 15 (2026), Employer's Tax Guide — Social Security and Medicare rates
- Social Security Administration — 2026 wage base of $184,500
- IRS — tips and overtime deductions
- California EDD — 2026 Withholding Schedules, Method B – Exact Calculation Method — Tables 1–28; worked examples A–F
- California EDD — Contribution rates, withholding schedules, and meals and lodging values — no DE 4 → single, zero allowances
- California EDD — Employee's Withholding Allowance Certificate (DE 4) — filing statuses; line 1a regular and 1b estimated-deduction allowances
- California EDD — Tax-rated employers — SDI withholding rate for 2026 is 1.3%; all wages subject since January 1, 2024
- California EDD — California Employer's Guide 2026 (DE 44) — SDI rate covers disability and paid family leave; no SDI taxable wage limit
- California EDD — Types of Payments (DE 231TP) — 401(k) deferrals: SDI yes, PIT no; section 125 benefits generally not subject; HSA contributions subject to PIT withholding
- California Labor Commissioner — Minimum wage FAQ — $16.90 from January 1, 2026; tips can't be credited toward the minimum wage
- California Labor Commissioner — Overtime FAQ — 1.5× over 8 hours a day and 40 a week; 2× over 12 hours a day
- California Labor Commissioner — Paydays, pay periods, and final wages — at least twice a month; final pay immediately if fired, within 72 hours if you quit without notice
- California Labor Commissioner — Waiting time penalty — daily wage for each day late, up to 30 days
- California Labor Commissioner — How to file a wage claim