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.
Monthly Withholding. Withholding payments during December 2022 totaled $12.6 billion, $1.8 billion (12.5 percent) below December 2021. Relative to last year, December was by far the weakest month so far this fiscal year. As we pointed out in a recent post, end-of-month bonuses had been coming in much lower this year compared to 2021. With this newest batch of data, end-of-year and holiday bonuses also have come in much weaker than last year. To make an apples-to-apples comparison for the month, we compare the same period across the two years. And specifically for December, we include the first few days of January withholding as well in order to capture any withholding trends that may have been delayed by the holidays.
Year-to-Date Withholding. The graph compares the running total of withholding payments since the start of the 2022-23 fiscal year relative to the same period last year. To-date, personal income tax withholding is $3.5 billion lower (6.7 percent) than last year.