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California Payroll Taxes for Employers (2026): SUTA and State Programs

Last updated: 2026-10-12 · 2026 rates checked against California EDD's own pages and the other official sources below

California employers pay state unemployment tax (SUTA) on the first $7,000 of each employee's wages in 2026, and new employers pay 3.5% — at most $245.00 per employee for the year. Every California employer also pays federal Social Security (6.2% up to $184,500), Medicare (1.45%) and FUTA (0.6% plus a projected 1.5% credit reduction on the first $7,000).

SUTA wage base

$7,000

per employee, 2026

New-employer rate

3.5%

2026

New-employer max

$245.00

SUTA per employee per year

FUTA

2.1%

projected; $147/employee

What will payroll taxes cost me in California?

Enter your headcount and average pay to see the employer's share of California and federal payroll taxes for 2026. Change the SUTA rate to the one on your rate notice.

California employer payroll tax estimator · 2026

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Employees in California

Average annual wages per employee ($)

Your SUTA rate (%)3.5% is the 2026 new-employer rate. Enter your assigned rate once you have one.

Estimated annual employer payroll taxes
Tax	Per year
California unemployment (SUTA) 3.5% × first $7,000 per employee	$1,225
Federal unemployment (FUTA) 2.1% × first $7,000 (includes the projected 2026 credit reduction)	$735
Social Security (employer half) 6.2% × first $184,500	$15,500
Medicare (employer half) 1.45% of all wages	$3,625
Total employer taxes	$21,085
Per employee	$4,217

Assumes every employee earns the average and works in California all year. Workers' comp premiums and benefits are extra — the payroll cost calculator adds them.

California unemployment insurance tax (SUTA) in 2026

2026 taxable wage base: $7,000 per employee (48th highest of 51)
New-employer rate: 3.5%
How the new-employer rate works: UI 3.4% for new employers (2–3 years) plus the 0.1% Employment Training Tax, both on the first $7,000.
Most a new employer pays per employee: $245.00 (3.5% × $7,000)
Experience-rated range (2026, as published): 1.5% to 6.2%
2025 average employer rate: 3.49% of taxable wages (U.S. DOL)
Employee contribution: None — employer-paid only
Agency: California EDD

Same $7,000 wage base as Arkansas, Florida, Louisiana and Tennessee. Register with California EDD when you first pay wages in California; you get an account number for quarterly wage reports and tax payments.

Paid leave, disability and other California payroll programs

State Disability Insurance (SDI, includes Paid Family Leave) · employee-paid, withheld by you1.3% of wagesNo wage cap since 2024.

Federal payroll taxes every California employer pays

Social Security: 6.2% from you and 6.2% withheld from the employee, on wages up to $184,500 in 2026.
Medicare: 1.45% each on all wages; withhold an extra 0.9% (employee only) on wages over $200,000.
FUTA: 6.0% of the first $7,000 per employee, less up to 5.4% credit for California unemployment tax paid on time = 2.1% for 2026 after California's projected 1.5% credit reduction (final figure after Nov. 10, 2026).
Federal income tax withholding from each paycheck based on the employee's Form W-4.

FUTA: California employers paid an extra 1.2% FUTA credit reduction for 2025 ($84 per employee). The projected 2026 reduction is 1.5% (2.1% total FUTA, $147 per employee); the final figure is set after Nov. 10, 2026.

Next for California employers: California paycheck calculator (employee withholding) · California new hire reporting · California payday & final paycheck rules · California workers' comp · full payroll cost calculator

California payroll tax FAQ

What is the California SUTA rate for new employers in 2026?

3.5%. UI 3.4% for new employers (2–3 years) plus the 0.1% Employment Training Tax, both on the first $7,000.

What is the California SUTA wage base for 2026?

$7,000 per employee. Once an employee's 2026 wages pass that amount, you stop paying California unemployment tax on them for the rest of the year. That is the 48th highest wage base of the 50 states and DC (the federal FUTA base is $7,000).

Do employees pay unemployment tax in California?

No. In California unemployment tax is paid only by the employer; it can't be deducted from pay. Only Alaska, New Jersey and Pennsylvania collect an employee share.

What other payroll taxes do California employers pay?

Besides unemployment tax: State Disability Insurance (SDI, includes Paid Family Leave) (employee-paid): 1.3%. No wage cap since 2024.

How much FUTA do California employers pay?

FUTA is 6.0% of the first $7,000 per employee, less a credit of up to 5.4% for paying state unemployment tax on time. California has an outstanding federal loan, so the credit is reduced: the projected 2026 reduction is 1.5%, for 2.1% total ($147 per employee). The final figure is set after Nov. 10, 2026.

How does my California SUTA rate change after the first years?

New employers keep the new-employer rate until they have enough history to be experience-rated (the timing is set by state law). After that, California EDD assigns a rate each year based on your layoffs and benefit charges; published 2026 rates run from 1.5% to 6.2%. Use the rate on your annual rate notice. The 2025 average employer rate in California was 3.49% of taxable wages.