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.
Compared to Recent Projections. Monthly personal income tax (PIT) withholding for April came in $90 million (1 percent) below projections included in 2025-26 Governor's Budget. For the fiscal year overall, withholding is running $2.8 billion (3 percent) higher than the recently released projections, which themselves targeted 6 percent growth over the prior year.
Winter Uptick in PIT Withholding Growth Moderated a Bit in March and April. The figure below shows the latest monthly trends for income tax withholding. Each bar represents a snapshot of how 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 trending up between 5 percent and 6 percent most of the fiscal year. This growth ticked up to around 10 percent in January. Since the winter, monthly withholding totals for March and April have moderated somewhat, returning to the 5 percent to 6 percent (above prior year) range seen last summer.