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. Withholding on stock options has made up a growing share of collections in recent years.
April Withholding Came in Well Above Budget Projections and Up Sharply From Last Year. Monthly personal income tax (PIT) withholding for April totaled $10 billion, about $1 billion (11 percent) above projections included in the Governor's Budget. April withholding was about 22 percent higher than its level in April of last year. April's strong year-over-year growth was likely boosted by two factors: timing issues (April 2026 included five Thursdays, typically the largest collection day, while April 2025 included four Thursdays) and a relative weak April 2024, when the stock market declined briefly before continuing its upward climb.
April Accelleration Pushes Growth Trend Back Up Toward 10 Percent. The figure below shows recent monthly trends for income tax withholding. Each bar represents a snapshot of how total income tax withholding for the prior 12 months compares to the same period one year before. This perspective helps filter out some of the month-to-month volatility in withholding that can make underlying trends difficult to interpret. After decelerating to roughly 7 percent through March, the trailing 12-month total of income tax withholding has moved back up to approximately 9 percent following April's strong result. The 3-month total for February, March, and April is up 13 percent from the same period one year earlier, a significant pickup from the 4.8 percent growth recorded through March. During April, total 12-month withholding collections surpassed $110 billion for the first time on record.