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California: minimum wage, income tax and cost of living

California in numbers: the minimum wage, state income tax, sales tax and median rent, from official sources, and what they mean for a budget.

Updated: October 11, 2026

What it costs to live and work in California: the minimum wage, state income tax, sales tax and median rent, from official sources, and what they mean for your monthly budget.

CaliforniaSource
Minimum wage$16.90 an hourUS Department of Labor, Wage and Hour Division: State Minimum Wage Laws
State income tax1 % to 13.3 %Tax Foundation: State Individual Income Tax Rates and Brackets, 2026 (rates as of January 1, 2026)
State sales tax7.25 %Tax Foundation: State and Local Sales Tax Rates, Midyear 2026
Median gross rent$2,104 a month (2024)US Census Bureau, American Community Survey 2024 1-year estimates, table B25064 (Median Gross Rent)

The statewide minimum wage is $16.90 an hour in 2026, adjusted every year by a set formula.

California taxes income at 1 % to 13.3 %; the top rate, which includes a 1 % mental health surcharge, applies above $1 million.

The state rate is 7.25 % (including a mandatory 1.25 % local add-on); other local taxes add 1.78 % on average, for a combined 9.03 %.

What income does rent in California take?

A common rule of thumb is to keep rent at or below 30 % of gross income. At the median rent of $2,104 a month, that means a household income of about $84,200 a year before tax.

Work out your take-home pay

Good to know

  • Workers also pay 1.3 % State Disability Insurance on wages, with no wage ceiling.

Sources

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