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.
November Withholding Came In Stronger Than Budget Projections But Only Slightly Above Last Year. Monthly personal income tax (PIT) withholding for November came in $415 million (6 percent) above projections included in 2025-26 budget agreement. However, the November budget projection anticipated a year-over-year decline in withholding. Instead, withholding totals came in slightly above last November (3 percent).
Withholding Since Mid-October Up 4 Percent Over Prior Year. The figure below shows weekly withholding totals between mid-October and the first week of december. Comparing week to week trends helps account for differences in holiday timing over the period. Income tax withholding receipts came in only slightly higher (4 percent) over the period, including for the first week of December, compared to the prior year.
Despite Some Decelleration, Withholding Persists as a Revenue Bright Spot. The figure below shows the latest 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 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 hoving near 10 percent growth. Despite relatively slower growth over the Thanksgiving period, withholding remains 7 percent higher for the fiscal year so far compared to last year.