Correction: An earlier version of this post mistakenly understated withholding in June. This version reports the corrected tallies.
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.
June Withholding In-Line With Monthly Estimate, With Fiscal Year Total Above Projections. Monthly personal income tax withholding for June totaled $8.9 billion, roughly in-line with projections included in the May Revision. June withholding was about 11 percent higher than its level in June of last year. For the fiscal year total, withholding came in roughly $1.2 billion (1 percent) above the May Revision estimates.
Underlying Growth Trend Holding Steady. 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. The trailing 12-month total remained at 9 percent in June. The 3-month total (a better, but noisy gauge of more recent trends) for April, May, and June is up about 13 percent from the same period last year, similar to May's pace.