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.
| California | Source | |
|---|---|---|
| Minimum wage | $16.90 an hour | US Department of Labor, Wage and Hour Division: State Minimum Wage Laws |
| State income tax | 1 % to 13.3 % | Tax Foundation: State Individual Income Tax Rates and Brackets, 2026 (rates as of January 1, 2026) |
| State sales tax | 7.25 % | 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.
Good to know
- Workers also pay 1.3 % State Disability Insurance on wages, with no wage ceiling.
Sources
- US Department of Labor, Wage and Hour Division: State Minimum Wage Laws (2026-07-01)
- Tax Foundation: State Individual Income Tax Rates and Brackets, 2026 (rates as of January 1, 2026) (2026-02-19)
- Tax Foundation: State and Local Sales Tax Rates, Midyear 2026 (2026-07-06)
- US Census Bureau, American Community Survey 2024 1-year estimates, table B25064 (Median Gross Rent) (2025-09)