Federal and California Tax Estimator
2025 2026

2025 withholding guide

Paycheck Withholdings (2025)

How to annualize paycheck inputs and calculate federal, payroll, and California wage withholding.

Educational use only. This guide is for general educational purposes and is not financial, tax, legal, or accounting advice. Tax rules can change and individual facts matter. Verify the information with official sources and a qualified professional before making tax or financial decisions.

1. Annual Pay and Deductions

Convert one paycheck amount into its full-year equivalent:

Annual Amount= Paycheck Amount × Frequency Multiplier

Choose the annual multiplier for the paycheck schedule:

Annual Frequency= Monthly = 12; Semimonthly = 24; Biweekly = 26

Limit the annualized amount to the employee's workdays in the year:

Pro‑Rated Annual Amount= MIN(Annual Amount, Annual Amount × Monday–Friday Employment Days ÷ 260)

Add 401(k) deductions taken from bonuses, then cap both plans at their annual limits:

Annual 401(k)= MIN($23,500, Pro-Rated 401(k) + Bonus 401(k)) Annual FSA= MIN($3,300, Pro-Rated FSA)

Add annual salary, bonus, and stock compensation:

Total Gross= Annual Salary + Annual Bonus + Annual Stock Rewards

2. Federal Regular and Supplemental Withholding

Subtract eligible payroll deductions from regular federal wages:

Federal Regular Wages= Annual Salary - Medical - 401(k) - FSA/HSA

Calculate regular-pay withholding after applying the relevant brackets and credits:

Regular Withholding= Bracket Base + MAX(0, Wages - Prior Bracket MAX) × Bracket Rate - Eligible Children × $2,000 - Other Dependents (18+) × $500

Apply the supplemental federal rates to bonus and other supplemental wages:

Supplemental Withholding= MIN(Supplemental Wages, $1,000,000) × 22% + MAX(0, Supplemental Wages - $1,000,000) × 37%

Use this table to find 2025 federal withholding bands by filing status:

2025 federal withholding Single Married filing jointly
No-withholding band ends $8,600 $16,600
10% band ends $20,550 $40,500
37% bracket starts above $635,000 $793,550

3. Social Security and Medicare Withholding

Subtract FICA-exempt payroll deductions from gross wages:

FICA Wages= Total Gross - Medical - FSA/HSA

Apply the Social Security rate to wages up to the annual wage base:

Social Security Withholding= MIN(FICA Wages, $176,100) × 6.2%

Apply the base and additional Medicare rates to FICA wages:

Medicare Withholding= FICA Wages × 1.45% + MAX(0, FICA Wages - $200,000) × 0.9%

4. California Withholding and SDI

California income tax withholding is calculated for each payroll period. It does not wait for year-to-date wages to reach the annual Method B standard deduction. For California regular taxable wages and SDI wages, HSA is not deducted.

Method B is California EDD's exact-calculation withholding method. Its low-income exemption is a payroll-period threshold for zero withholding, not a deduction. Its standard deduction is the payroll-period deduction used before the Method B tax table is applied.

Bonus and stock reward wages are California supplemental wages when they are not paid with regular wages. The flat California supplemental rate for bonuses and stock options is 10.23%, with no allowance credits.

Subtract eligible payroll deductions from regular California wages:

California Period Taxable Wages= Regular Wages - Medical - 401(k) - FSA

Subtract the payroll-period standard deduction from regular taxable wages:

Period Withholding Taxable Income= MAX(0, Period Regular Taxable Wages - Period Standard Deduction)

Calculate regular-pay withholding after applying the relevant brackets and credits:

Regular Withholding= 0 When Period Regular Taxable Wages ≤ Low‑Income Exemption Threshold; Otherwise MAX(0, Period Tax Table Amount - Period Allowance Credits)

Apply California's flat supplemental rate to bonus and stock wages:

California Supplemental Withholding= (Bonus + Stock Rewards) × 10.23%

Add regular and supplemental withholding to estimate annual California withholding:

Annual California Withholding Estimate= Regular Method B Withholding + Supplemental Withholding

Subtract SDI-exempt payroll deductions from gross wages:

California SDI Wages= Total Gross - Medical - FSA

Apply the SDI rate to California SDI wages:

California SDI= California SDI Wages × 1.2%

Use this table to review 2025 California withholding and SDI values:

2025 California withholding item Value
Annual low-income exemption: single / MFS $18,368
Annual low-income exemption: MFJ with 2+ / head of household $36,736
Annual Method B standard deduction: single / MFS $5,540
Annual Method B standard deduction: MFJ / head of household $11,080
Annual Method B allowance credit $163.90
Bonus and stock supplemental PIT rate 10.23%
California SDI rate 1.2%

Official Sources

Tax Guides