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.
Despite Drag from Timing Issues, May Withholding Came in Well Above May Revision Estimates and Up Modestly From Last Year. Monthly personal income tax (PIT) withholding for May totaled $8.8 billion, about $1.2 billion (16 percent) above projections included in the May Revision. May withholding was about 4 percent higher than its level in May of last year. May's modest year-over-year growth was likely dragged down by timing issues: April 2026 included one extra Thursday and May 2026 included one fewer Thursday, relative to 2025. Smoothing out these timing issues, April and May combined withholding was 13 percent higher than the same period last year.
Underlying Growth Trend Holding Steady Near 9 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. The trailing 12-month total of income tax withholding held near 9 percent in May. A closer measure of more recent trends, the 3-month total for March, April, and May, is up 13 percent from the same period one year earlier.