How Much Does It Cost to Hire an Employee in California? (2026)
State-specific payroll taxes, workers' comp, and total employer costs in California.
Total Cost at $60K Salary
$66,454
Cost multiplier: 1.11x
SUTA Rate (Mid)
3.4%
Wage base: $7,000
Workers' Comp Rate
1.54%
Has state income tax
California Employer Tax Details
State-specific payroll obligations for employers
| SUTA Rate Range | 1.5% – 6.2% |
| SUTA New Employer Rate (typical) | 3.4% |
| SUTA Wage Base | $7,000 |
| Workers' Compensation (avg) | 1.54% of payroll |
| State Income Tax | Yes |
| Disability Insurance | 1.1% |
CA SDI (1.1%) covers both disability and paid family leave. Employee-paid.
Example Employer Costs in California
Mandatory employer taxes only (no benefits or overhead)
| Component | $40,000 Salary | $60,000 Salary | $80,000 Salary |
|---|---|---|---|
| Social Security (6.2%) | $2,480 | $3,720 | $4,960 |
| Medicare (1.45%) | $580 | $870 | $1,160 |
| FUTA | $42 | $42 | $42 |
| SUTA (CA) | $238 | $238 | $238 |
| Workers' Comp | $616 | $924 | $1,232 |
| State Programs (DI/PFL) | $440 | $660 | $880 |
| Total Employer Taxes | $4,396 | $6,454 | $8,512 |
| Total Cost (salary + taxes) | $44,396 (1.11x) | $66,454 (1.11x) | $88,512 (1.11x) |
These estimates include mandatory employer payroll taxes only. Add benefits ($7K-$17K) and overhead (~10% of salary) for full cost.
How California Compares
California's typical SUTA rate of 3.4% is above the national average of ~1.70%. With a relatively low wage base of $7,000, the maximum SUTA cost per employee is capped early.
Workers' compensation at 1.54% of payroll is above the national average of ~1.20%.
Employee Costs in Other States
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