California Payroll Tax And Labor Laws 

Get your California State Tax ID Number 

Click here to obtain State Tax and Unemployment ID  

Note: California utilizes one application to receive an ID used for State Income Tax and State Unemployment Insurance filings.  

California Wage and Hour Laws 

Minimum Wage 

California’s state-mandated minimum wage is $16.00 per hour for covered employers, regardless of the number of employees, as of January 1, 2023.   

Please note that many cities and counties within California have their own separate minimum wage rates, which are higher than the state-mandated rate. Minimum wage rates for all jurisdictions are subject to change. Employers should verify they meet current state, county, and local requirements.  

Overtime 

• Overtime in the state of California is determined on a daily or weekly basis, depending on the circumstances. California’s overtime law requires covered employers to pay employees:  

  • For hours worked over 8 in a single workday, at one and one-half times the regular rate of pay;  
  • For hours worked over 12 in a single workday, at twice the regular rate of pay;  
  • For hours worked over 40 in a workweek, at one and one-half times the regular rater of pay;  
  • For hours worked on a 7th consecutive day of work of the workweek:  
  • at one and one-half times the regular rate of pay for the first 8 hours;  
  • at twice the regular rate of pay for any time worked over 8 hours.  

Pay Frequency 

With some exceptions, wages must be paid at least twice during each calendar month on the days designated in advance as regular paydays. The employer must establish a regular payday and is required to post a notice that shows the day, time, and location of payment.  

Wages earned between the 1st and 15th days, inclusive, of any calendar month must be paid no later than the 26th day of the month during which the labor was performed, and wages earned between the 16th and last day of the month must be paid by the 10th day of the following month.   

Wages earned in other payroll periods such as weekly, biweekly (every two weeks), or semimonthly (twice per month) when the earning period is something other than between the 1st and 15th, and 16th and last day of the month, must be paid within seven calendar days of the end of the payroll period within which the wages were earned.  

For more information on pay frequencies in California, click here.  

California Unemployment 
 
Taxable Wage Base ($000s):                                   $7,000 

New Employer Rate (% Taxable Wages):                 3.4%

California Income Tax Withholding 

California's law requires employers to withhold state personal income tax (PIT) from employee wages and remit the amounts withheld to the Employment Development Department.  

Persons in business for themselves (independent contractors) are not employees and are generally not subject to withholding.  

California has no specific reciprocal taxation agreements with other states. Still, residents of Arizona, Guam, Indiana, Oregon, and Virginia are allowed credit toward their California income tax liability for taxes paid to their home states.  

California State Resources 

California Department of Tax and Fee Administration  

California Department of Industrial Relations  

California Employment Development Department  

California SUI Rate  

SurePayroll, Inc. and its subsidiaries assume no liability and make no warranties on or for the information contained on these state payroll pages. The information presented is intended for reference only and is neither tax nor legal advice. Consult a professional tax, legal or other advisor to verify this information and determine if and/or how it may apply to your particular situation.  

This website contains articles posted for informational and educational value. SurePayroll is not responsible for information contained within any of these materials. Any opinions expressed within materials are not necessarily the opinion of, or supported by, SurePayroll. The information in these materials should not be considered legal or accounting advice, and it should not substitute for legal, accounting, and other professional advice where the facts and circumstances warrant. If you require legal or accounting advice or need other professional assistance, you should always consult your licensed attorney, accountant or other tax professional to discuss your particular facts, circumstances and business needs.  

Revised 1/1/2024