California's tax rates depend on your income level and what you're buying

California has one of the highest income tax rates in the country, ranging from 1% to 13.3% depending on how much you earn. The state also charges sales tax, which varies by county but starts at 7.25% and can reach 10.75% in some areas. Property tax is set at 1% of your home's assessed value, though some counties add voter-approved increases. The rate you pay depends on which tax you're looking at and your personal situation.

Your actual tax burden combines multiple taxes across different categories. An employee earning $60,000 pays income tax, sales tax on purchases, and property tax if they own a home. A self-employed person pays the same income tax rates but also owes self-employment tax. Understanding each tax separately helps you see where your money goes and what you might be able to reduce.

Key Takeaways

  • California income tax ranges from 1% on the lowest earners to 13.3% on those earning over $680,000 per year, with rates rising in steps based on your income bracket.
  • Sales tax in California starts at 7.25% statewide but varies by county, with some areas charging as much as 10.75% when local taxes are added.
  • Property tax is 1% of your home's assessed value in most California counties, though some have voter-approved additions that raise the rate higher.
  • Your actual tax burden depends on whether you're an employee, self-employed, a homeowner, or a renter, since each situation triggers different taxes.

How California income tax brackets work

California uses a progressive tax system, meaning the percentage you pay increases as your income rises. You don't pay one flat rate on all your income—instead, different portions of your earnings are taxed at different rates. For example, a single filer in 2024 pays 1% on the first $10,099 of income, then 2% on income between $10,099 and $23,942, and so on, up to 13.3% on income over $680,063.

The brackets change slightly each year because California adjusts them for inflation. If you're married filing jointly, the income ranges are wider, so you can earn more before hitting higher tax rates. Self-employed people pay the same income tax rates as employees, but they also owe self-employment tax (Social Security and Medicare), which adds roughly 15.3% on top of income tax for net earnings over $400.

You can reduce your California income tax by claiming deductions—the standard deduction for a single filer in 2024 is $5,202, and for married filing jointly it's $10,404. If you have significant expenses (mortgage interest, charitable donations, medical costs), you may be able to itemize deductions instead and lower your taxable income further.

Sales tax rates by county and what gets taxed

California's base sales tax rate is 7.25%, but most counties add their own local tax on top of that. The total rate you pay at checkout depends on where you live. Los Angeles County charges 9.5%, San Francisco charges 8.625%, and San Diego charges 7.75%. Some rural counties stay closer to the base 7.25%, while others reach 10.75% or higher when multiple local taxes stack together.

Sales tax applies to most goods you buy in stores, but not to groceries, prescription medications, or medical devices. Clothing and shoes are taxed in California, unlike some other states. Services like haircuts, repairs, and professional fees are generally not taxed, but labor charges bundled with a product sale sometimes are. Digital products like e-books, streaming subscriptions, and downloaded software are taxed as well.

If you buy something online from an out-of-state seller, California requires you to pay sales tax on that purchase too—either at checkout if the seller collects it, or when you file your tax return if they don't. This is called use tax, and it applies the same rate as sales tax would in your county.

Property tax and how assessments work

California property tax is 1% of your home's assessed value, set by county assessors. The assessment is not the same as the market price of your home—it's based on the purchase price when you bought it, then adjusted by a maximum of 2% per year, even if your home's actual value rises much faster. This means longtime homeowners often pay significantly less property tax than newer residents in the same neighborhood.

When you buy a home, the county reassesses it at the new purchase price, and your property tax jumps to 1% of that amount. If your home is worth $800,000 but you bought it for $500,000 ten years ago, you're paying tax on roughly $650,000 (the original price plus 2% annual increases), not the current market value. This system, called Proposition 13, is unique to California and makes property tax more predictable for long-term owners.

Many California counties have added voter-approved tax increases on top of the base 1% rate. These are called assessments or parcel taxes and typically fund schools, fire departments, or local infrastructure. Some homeowners pay an additional 0.1% to 0.5% depending on where they live. Check your county assessor's website to see what your total property tax rate is, since it varies by location.

Other California taxes you may encounter

California charges a vehicle license fee (VLF) based on your car's value, not a flat registration fee like many states. The fee is 0.65% of your vehicle's current market value, calculated by the Department of Motor Vehicles. A car worth $20,000 costs roughly $130 per year in VLF, while a $50,000 car costs about $325. This fee is due every year when you renew your registration.

If you own a business, you may owe California's gross receipts tax or franchise tax depending on your business structure. Corporations pay a minimum franchise tax of $800 per year, plus 8.84% of net income over $250,000. Sole proprietors and partnerships don't pay a separate franchise tax but do pay income tax on business earnings. Limited liability companies (LLCs) pay a flat annual fee based on gross revenue, ranging from $250 to $11,790.

California also taxes gasoline at 68.2 cents per gallon (as of 2024), one of the highest gas taxes in the country. This is included in the price you see at the pump. Alcohol purchases are taxed at the state level, and some counties add local alcohol taxes on top. Cigarettes and vaping products face an additional excise tax of $2.87 per pack.

How to estimate your total tax burden

Your actual tax percentage depends on combining income tax, sales tax, and property tax (if you own a home). A single person earning $60,000 per year in California pays roughly 5.5% in state income tax, plus 8% to 10% in sales tax on purchases, plus property tax if they own. The combined rate is higher than in many states, but it varies widely based on where you live and how much you spend.

Use the Franchise Tax Board's tax calculator on their website to estimate your income tax liability based on your specific situation. For sales tax, multiply your expected annual spending by your county's rate. If you own property, divide your property tax bill by your home's assessed value to see your effective rate. Adding these together gives you a rough picture of your total state tax burden.

Keep in mind that federal income tax is separate from California state tax and applies to all U.S. residents. Your federal rate depends on your income bracket and filing status. Some people also owe local income taxes if they live in cities like San Francisco or Los Angeles that charge them. Check your city's tax office website to see if your city has a local income tax.

Deductions and credits that lower your California taxes

The standard deduction is the simplest way to reduce your taxable income. For 2024, it's $5,202 for single filers and $10,404 for married couples filing jointly. If your deductible expenses (mortgage interest, property taxes, charitable donations, medical costs) add up to more than the standard deduction, you can itemize instead and claim the larger amount.

California also offers tax credits that directly reduce the tax you owe, not just your taxable income. The Earned Income Tax Credit (EITC) is available to low- and moderate-income workers and can be worth hundreds to thousands of dollars. The Child and Dependent Care Credit helps parents pay for childcare. The California Earned Income Tax Credit is separate from the federal version and may provide additional money back.

If you're over 65, blind, or disabled, you may may have access to for an additional standard deduction. Renters can claim a renter's credit if they meet income limits. Teachers and educators can deduct up to $250 in classroom expenses. Check the Franchise Tax Board's website or Form 540 instructions to see which credits and deductions explore to your situation.

Frequently Asked Questions

What's the difference between California's income tax and federal income tax?

California income tax is a state tax that goes to California's government, while federal income tax goes to the U.S. government. Both are withheld from your paycheck if you're an employee. You file separate returns for each—a California Form 540 and a federal Form 1040. The rates and brackets are different, and some deductions allowed on one return may not be allowed on the other.

Do I pay sales tax on groceries in California?

No. Groceries—including fruits, vegetables, meat, dairy, bread, and prepared foods bought cold—are not subject to California sales tax. However, hot prepared foods, candy, and soda are taxed. If you're unsure whether a specific item is taxed, ask the cashier or check your receipt.

Why do I pay property tax every year if I own my home?

Property tax funds local schools, fire departments, police, and infrastructure. California law requires homeowners to pay 1% of their assessed property value annually. Even if you own your home outright with no mortgage, you still owe property tax. If you don't pay, the county can place a lien on your home or eventually foreclose.

Can I deduct California state income tax on my federal return?

You can deduct state income tax (or state sales tax, if you choose) on your federal return, but only if you itemize deductions instead of taking the standard deduction. The total of all state and local taxes (SALT) you deduct is capped at $10,000 per year for federal purposes, so this benefit is most valuable for high-income earners in high-tax states.

What happens if I move out of California—do I still owe state income tax?

You owe California income tax only on income earned while you were a California resident. If you move to another state mid-year, you file a part-year resident return and pay California tax only on income earned before you left. You'll also file a return in your new state for income earned after you moved. Keep documentation of your move date to support your claim.