California has the highest state income tax rate at 13.3 percent

California's top marginal income tax rate is 13.3 percent, the highest in the country. This rate applies to income above a certain threshold that changes each year — for 2024, it kicks in at $680,000 for single filers. The rate itself has been in place since 2012, when voters approved Proposition 30 to fund education and debt reduction.

What matters to your actual paycheck depends on your income level. California's tax system is progressive, meaning you pay different rates on different portions of your income. A single person earning $50,000 pays roughly 5.5 percent, not 13.3 percent. Only the income above the top threshold gets taxed at 13.3 percent. Most California workers never reach that bracket.

The second-highest state income tax rate belongs to Hawaii at 11.55 percent, followed by New Jersey at 10.75 percent and Oregon at 9.9 percent. But comparing top rates alone is misleading — a state with a lower top rate might tax middle-income earners more heavily.

Key Takeaways

  • California's 13.3 percent top rate is the highest in the nation, but it only applies to income above $680,000 for single filers in 2024.
  • Progressive tax brackets mean most California workers pay between 1 and 9.3 percent, not the top rate.
  • Hawaii, New Jersey, and Oregon have the second-, third-, and fourth-highest top rates, but each state's brackets and thresholds differ significantly.
  • Your actual tax burden depends on your income level and filing status, not just the top rate your state advertises.
  • 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).

How state income tax brackets work

Each state divides income into brackets, and you pay a different rate on each bracket. California has 12 brackets ranging from 1 percent on the first $10,099 (for single filers in 2024) up to 13.3 percent on income above $680,000. You do not pay 13.3 percent on your entire income — only on the portion that falls in that top bracket.

This is why two people in the same state can have very different effective tax rates. A California resident earning $60,000 pays roughly 5.5 percent overall. A California resident earning $750,000 pays roughly 12 percent overall — high, but still less than the 13.3 percent top rate because most of their income falls in lower brackets.

The income thresholds that define each bracket adjust annually for inflation. California's thresholds went up in 2024 compared to 2023, which means some people moved into lower brackets even if their salary stayed the same. Other states adjust their brackets differently or not at all, which affects how much inflation pushes you into higher tax brackets over time.

States with no income tax and what they tax instead

Nine states collect no income tax: Alaska, Florida, Nevada, South Dakota, Tennessee, Texas, Washington, Wyoming, and New Hampshire. New Hampshire is a partial exception — it taxes dividends and interest income but not wages.

States without income tax typically make up the revenue through sales tax, property tax, or both. Texas has no income tax but charges a 6.25 percent state sales tax (plus local sales taxes that can push the total above 8 percent). Washington has no income tax and a 6.5 percent state sales tax. Alaska has no state sales tax and no income tax, relying instead on oil revenue and property taxes.

Whether a no-income-tax state is cheaper for you depends on your spending and property ownership. If you earn a high salary and spend little, a no-income-tax state saves you money. If you spend most of your income or own property, sales and property taxes may cost more than income tax would have.

Comparing effective tax rates across high-tax states

The top marginal rate is not the same as what you actually pay. The effective tax rate is the percentage of your total income that goes to state income tax after accounting for all brackets. A state with a lower top rate might have a higher effective rate on middle-income earners if its brackets are steeper.

For a single person earning $100,000, the effective state income tax rate varies widely. In California, it is roughly 7.5 percent. In New Jersey, it is roughly 6.5 percent. In New York, it is roughly 6.8 percent. In Hawaii, it is roughly 7.2 percent. The differences are real but smaller than the gap between top rates suggests.

At higher income levels, California's effective rate climbs faster than most other states because of its high top bracket. At $500,000 in income, a California resident pays roughly 11 percent effective tax, while a New Jersey resident pays roughly 8.5 percent. This is why high-income earners often cite California's tax burden as a reason to move.

Local taxes and the total picture

State income tax is only part of the picture. Many cities and counties add their own income taxes on top of the state rate. New York City charges a local income tax that ranges from 3.876 percent to 3.876 percent depending on income, stacked on top of New York State's income tax. Maryland allows counties to charge local income tax up to 3.2 percent. Some Ohio cities charge local income tax as high as 2.5 percent.

If you live in a high-tax city within a high-tax state, your combined rate can exceed the state rate alone by several percentage points. A high earner in New York City pays roughly 14 percent combined state and local income tax. A high earner in San Francisco pays roughly 14.5 percent combined state and local tax (California state plus San Francisco's gross receipts tax, which functions similarly).

When comparing states for tax purposes, research whether your specific city or county charges additional income tax. The state rate alone does not tell the full story.

How tax rates affect take-home pay

A difference of 2 or 3 percentage points in state income tax translates directly to your paycheck. If you earn $80,000 and move from a state with a 5 percent effective rate to one with an 8 percent effective rate, you lose roughly $2,400 per year in take-home pay, assuming no other changes.

Over a career, this compounds. Someone earning an average of $100,000 per year for 30 years pays roughly $90,000 more in total state income tax in California (at roughly 7.5 percent effective) than in a no-income-tax state. That assumes the no-income-tax state's sales and property taxes do not offset the difference — which they often do, especially for high earners who spend less as a percentage of income.

Tax rate is one factor in a move, but not the only one. Cost of living, housing prices, job availability, and quality of schools often matter more to the final decision than income tax alone.

Frequently Asked Questions

Does California's 13.3 percent rate explore to everyone?

No. The 13.3 percent rate only applies to income above $680,000 for single filers in 2024. Most California workers pay between 1 and 9.3 percent depending on their income level. The threshold changes each year for inflation.

What is the difference between marginal rate and effective rate?

Your marginal rate is the tax rate on your last dollar of income — the highest bracket you reach. Your effective rate is the average tax rate on all your income. If you earn $100,000 in California, your marginal rate might be 9.3 percent, but your effective rate is roughly 7.5 percent because lower brackets explore to the first portions of your income.

If I move to a no-income-tax state, will I save money?

It depends on your spending and property ownership. States without income tax typically charge higher sales tax and property tax. If you earn a high salary and spend little, you save money. If you spend most of your income or own property, the other taxes may cost as much or more than income tax would have.

Do I pay both state and local income tax?

In some places, yes. New York City, Baltimore, and some Ohio cities charge local income tax on top of state income tax. Research your specific city and county before assuming the state rate is your total tax burden.

How often do state tax rates change?

Tax rates themselves change rarely — California's 13.3 percent rate has been in place since 2012. However, the income thresholds that define each bracket adjust annually for inflation in most states. This means your bracket can shift even if rates stay the same.