California · 2026 employer costs
The cost of an employee in California
At a $75,000 salary, the fully-burdened cost of an employee in California is about $81,317, the 32nd-lowest of 51 — above Rhode Island ($81,302) and Pennsylvania ($81,293), below Wisconsin ($81,338) and Oklahoma ($81,361).
California's 2026 state unemployment (SUI) tax applies to the first $7,000 of each employee's wages, at a 3.40% new-employer rate. Experienced employers pay 1.50%–6.20% based on their layoff history. Beyond SUI, California employers also deal with Employment Training Tax (ETT). Employee-funded State Disability Insurance (SDI) is excluded below — it is withheld from the worker, not an employer cost.
California employer payroll tax calculator
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How the $6,317 on top of salary breaks down
- Social Security74%
- Medicare17%
- FUTA2%
- State SUI4%
- ETT0%
- Workers' comp3%
| Base wages | Annual rate basis | $75,000 |
| Social Security (employer) | 6.20% up to $184,500 | $4,650 |
| Medicare (employer) | 1.45% (no cap) | $1,088 |
| FUTA (incl. projected credit reduction)est. | 2.10% on first $7,000 | $147 |
| State unemployment (SUI/CA) | 3.40% up to $7,000 | $238 |
| Employment Training Tax (ETT) | 0.10% up to $7,000 | $7 |
| Workers' compensation (est.)est. | ~0.25% (office/clerical est.) | $188 |
| Total annual cost | $81,317 |
$75,000 annualized wages · 2,080 paid hours · California · 1 in role · 1 total employer headcount · tax year 2026.
Health $0/year · retirement 0% · other benefits 0% · payroll/PEO fees $0/year.
Employer-paid costs only — employee withholdings (state income tax, SDI, employee-funded leave) are excluded; these are costs on top of wages, not deductions. Estimate for budgeting, not tax advice. Defaults use the new-employer SUI rate and an office-class workers'-comp estimate. See methodology.
California employer payroll taxes (2026)
- State income tax on wages
- Yes
- State unemployment (SUI) wage base
- $7,000
- SUI new-employer rate
- 3.40%
- SUI rate range (experienced)
- 1.50% – 6.20%
- FUTA (federal unemployment)
- 2.10% on first $7,000California adds a projected 1.50% FUTA credit reduction for 2026; US-DOL finalizes it after Nov. 10, 2026.
- Employment Training Tax (ETT)
- 0.10%Employer-paid. Shows 0.0% for employers with a negative UI reserve account.
- Workers' comp (office class, est.)
- ~$0.2–$0.3 / $100Estimate — set by your carrier and experience rating.
Excluded (employee-paid, not an employer cost): State Disability Insurance (SDI).
2026 tax year · each California figure carries a primary and an independent source (see sources) · last verified June 2026.
Worked examples
Fully-burdened employer cost in California, 2026 rates:
| Salary | Added | Total cost | Burden |
|---|---|---|---|
| $45,000 | $3,947 | $48,947 | +8.8% |
| $75,000 | $6,317 | $81,317 | +8.4% |
| $120,000 | $9,872 | $129,872 | +8.2% |
Includes Social Security (6.20% to $184,500), Medicare, FUTA, California SUI at the new-employer rate (3.40%), and an office workers' comp estimate. Excludes optional benefits.
California employer cost FAQ
How much does it cost to employ someone in California?
Beyond salary, a California employer pays Social Security and Medicare (7.65% combined), FUTA, and California state unemployment on the first $7,000 of wages, plus a projected 1.50% FUTA credit reduction for 2026. For a $75,000 salary that totals about $81,317 (+8.4%) before optional benefits.
What is the California SUI / SUTA rate for 2026?
The 2026 California taxable wage base is $7,000. New employers pay 3.40%; experienced employers range 1.50%–6.20% based on their claims history.
What employer payroll costs are specific to California?
On top of federal FICA/FUTA and SUI, California employers deal with Employment Training Tax (ETT).
What payroll taxes do California employers pay?
California employers pay federal Social Security (6.2%) and Medicare (1.45%), FUTA (0.6% on the first $7,000), and California state unemployment (SUI) at a 3.4% new-employer rate on the first $7,000, plus Employment Training Tax (ETT). Workers' compensation is on top. Employee-funded State Disability Insurance (SDI) is withheld from workers, not paid by the employer.
Do California employers pay FUTA?
Yes — every US employer, including in California, pays FUTA at 0.6% on the first $7,000 of each employee's wages (about $42 per employee per year); California has a projected 1.5% credit reduction for 2026, subject to the final US-DOL determination after Nov. 10, 2026.
States with a similar cost of employment
Read how the burden stack works in our labor burden rate guide, compare 1099 vs W-2 employer costs, and see every figure sourced in our methodology.