California · 2026 and 2027
California employer payroll taxes and employee cost: 3.4% SUTA on $7,000
In California, a $50,000 employee costs a new employer about $62,794 a year in 2026: 25.6% on top of pay for payroll taxes, unemployment insurance, workers' comp and health coverage. Change any input to see your own number.
Calculate the cost of an employee in California
Estimates for planning, not tax or legal advice. Rates change and some depend on your business; confirm yours with your state agencies, insurer or payroll provider.
What a California employer pays on top of pay
Every line of the calculator, explained, with the official source of each number.
- Social Security and Medicare
7.65% of pay
The employer matches the employee: 6.2% Social Security on pay up to $184,500 in 2026 ($192,300 in 2027) and 1.45% Medicare on all pay.
per Social Security Administration, as of Jan 1, 2026
- Federal unemployment tax (FUTA)
2.1% of $7,000
6% of the first $7,000, less the 5.4% credit for paying state unemployment tax, plus California's potential 2026 credit reduction of 1.5%: $147 per employee. The U.S. Department of Labor had not published the final 2026 reduction by Nov 11, 2026; it publishes it after Nov 10, 2026.
per Internal Revenue Service, as of Jan 1, 2026; per U.S. Department of Labor, Employment and Training Administration, as of Nov 10, 2026
- California unemployment insurance (SUTA)
3.4% of $7,000
New employers pay 3.4% on the first $7,000 of each employee's pay in 2026. After two to three years the rate follows your own claims history. The 2027 wage base is $7,000.
per U.S. Department of Labor, Employment and Training Administration, as of Jan 1, 2026; per California Employment Development Department, as of Jan 1, 2026
- Employment Training Tax
0.1% of $7,000
An employer-paid surcharge billed with unemployment insurance: $7 per employee a year.
per California Employment Development Department, as of Jan 1, 2026
- State Disability Insurance
$0 for the employer
Withheld from employees at 1.3% of all wages in 2026; employers pay no SDI.
per California Employment Development Department, as of Jan 1, 2026
- Paid sick leave
40 hours a year
One hour of paid sick leave for every 30 hours worked; employers may cap use at 40 hours or five days a year. The hours are paid but not worked, so they raise the cost per hour worked.
per California Labor Commissioner (DIR), as of Jan 1, 2024
- Workers' compensation
$1.86 per $100 of payroll
Index rate for a standard mix of job classes: rank 4 of 51 (1 = highest) and 170% of the national median in the 2024 study. Your premium depends on your job classes and claims history.
per Oregon Department of Consumer and Business Services, as of Jan 1, 2024
- Health insurance (employer share)
$7,647 single / $19,210 family
Average employer contribution per enrolled employee a year at California private-sector employers that offer coverage, 2025 survey.
per Agency for Healthcare Research and Quality (MEPS-IC), as of Jan 1, 2025
- Minimum wage
$16.90 in 2026, $17.40 in 2027
California's rate since Jan 1, 2026. Higher rates apply to fast food and some health care workers, and in many cities. From January 1, 2027: $17.40.
per California Department of Industrial Relations, as of Jan 1, 2026; per California Department of Industrial Relations, as of Jan 1, 2027
Checked against each source on Oct 23, 2026. Press image of these numbers, free to use with attribution: PNG · SVG.
Two worked examples in California
Both for a new employer with 10 employees in a general industry in 2026, with single health coverage at the state average.
Salaried employee at $50,000
A $50,000 salary, 40 hours a week.
| Pay for hours worked2,040 hours | $49,038 |
|---|---|
| Paid sick leave required by law40 hours | $962 |
| Social Security (employer share)6.2% of $50,000 | $3,100 |
| Medicare (employer share)1.45% of $50,000 | $725 |
| FUTA (with credit reduction)2.1% of $7,000 | $147 |
| State unemployment insurance (new employer)3.4% of $7,000 | $238 |
| Employment Training Tax0.1% of $7,000 | $7 |
| Workers' compensation (state index rate)$1.86 per $100 of payroll | $930 |
| Health insurance (single coverage, state average)average employer contribution | $7,647 |
| Total cost a year | $62,794 |
25.6% on top of pay · $30.78 per hour worked
Hourly employee at $18 an hour
$18 an hour for 40 hours a week, 52 weeks.
| Pay for hours worked2,040 hours | $36,720 |
|---|---|
| Paid sick leave required by law40 hours | $720 |
| Social Security (employer share)6.2% of $37,440 | $2,321 |
| Medicare (employer share)1.45% of $37,440 | $543 |
| FUTA (with credit reduction)2.1% of $7,000 | $147 |
| State unemployment insurance (new employer)3.4% of $7,000 | $238 |
| Employment Training Tax0.1% of $7,000 | $7 |
| Workers' compensation (state index rate)$1.86 per $100 of payroll | $696 |
| Health insurance (single coverage, state average)average employer contribution | $7,647 |
| Total cost a year | $49,040 |
31% on top of pay · $24.04 per hour worked
What changes for California employers in 2027
- The Social Security wage base rises from $184,500 to $192,300: up to $484 more employer tax for employees paid above it. per Social Security Administration, as of Jan 1, 2027
- California's minimum wage becomes $17.40 an hour on January 1, 2027. per California Department of Industrial Relations, as of Jan 1, 2027
- The California unemployment insurance wage base becomes $7,000, with a 3.4% new-employer rate. per California Employment Development Department, as of Jan 1, 2027
Only changes already official on Oct 23, 2026. Most states publish next year's unemployment insurance rates in November and December; this page is updated when they do.
Frequently asked questions
How much does it cost to hire an employee in California?
About $62,794 a year in 2026 for a $50,000 employee of a new California employer with 10 staff: $12,794 above pay, of which $7,647 is health coverage, $930 workers' comp and $238 California unemployment tax. At $18 an hour full time: $49,040.
What payroll taxes do employers pay in California?
California payroll taxes on a $50,000 employee come to $4,217 a year for a new employer: $238 of California unemployment insurance at 3.4% on $7,000, $7 of Employment Training Tax, $3,825 of Social Security and Medicare and $147 of FUTA.
What is the California SUTA rate for new employers in 2026?
3.4% on the first $7,000 of each employee's pay: up to $238 per employee a year. For 2027 the wage base is $7,000 and the rate 3.4%.
Is paid sick leave required in California?
Yes. One hour of paid sick leave for every 30 hours worked; employers may cap use at 40 hours or five days a year. That is 40 paid hours a year for a full-time California employee at 100 employees.
How much does workers' comp cost in California?
$1.86 per $100 of payroll at California's index rate (rank 4 of 51, 170% of the median): about $930 on $50,000 of pay.
How much do California employers pay for health insurance?
$7,647 a year per employee with single coverage and $19,210 with family coverage, the average California private-employer share of $9,162 and $27,057 premiums in 2025.
Does California have a paid family leave or disability tax for employers?
State Disability Insurance: Withheld from employees at 1.3% of all wages in 2026; employers pay no SDI.
More employer cost pages
Cities in California with their own rules
States with a similar employer cost
Minimum wage in California
Data and rules for every state
Terms on this page
Software and services for these costs
- Payroll Software
Calculates and files these payroll taxes for every state you hire in.
- PEO Services
Takes on payroll taxes, workers' comp and benefits, often at group rates.
- Benefits Administration
Runs the health plan and leave programs behind the benefits lines.
Benefits and workers’ comp are most of this cost
A PEO pools employers for health insurance and workers’ comp, often at group rates. Compare PEOs we research, with verified prices and features.