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 February came in $887 billion (11 percent) above projections included in 2025-26 Governor's Budget. For the fiscal year overall, withholding is already running $2.8 billion (4.2 percent) higher than the recently released projections, which themselves targeted 6 percent growth over the prior year.
Uptick in PIT Withholding Growth Showing Up in Most Recent Data. 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 6 percent most of the fiscal year. This growth range has ticked up to around 10 percent beginning in December. For the first time on record, as of January, the state collected more than $100 billion in income tax withholding over the prior year.