California employers make regular income tax withholding payments for their employees. These amounts are reported every weekday, providing a real-time indication of the direction and magnitude of aggregate change in the employers’ payroll. Most withholding payments are for employees’ wages and salaries, but withholding is also due on bonuses and stock options received by employees.
Compared to Recent Projections. Monthly personal income tax (PIT) withholding for July came in $402 million (5 percent) above projections included in 2025-26 budget agreement. This amounts to 14 percent growth above the prior year level.
Recent Trend in Withholding Remains Strong by Historical Standards. The figure below shows the latest monthly trends for income tax withholding. Each bar represents a snapshot of how income tax withholding for the prior 12 months compares to the year before. This viewpoint helps filter out some of the month-to-month variation in income tax withholding that makes interpreting trends difficult. The trailing 12-month total of income tax withholding had been trending up between 5 percent and 10 percent since early 2024.