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.
September Withholding Beat Estimate by $1.3 Billion. Monthly personal income tax (PIT) withholding for September came in $1.254 billion (16 percent) above projections included in 2025-26 budget agreement. This amounts to an astonishing 24 percent growth above the prior year level.
June, July, August, and September Withholding Total Up 13 Percent Over Prior Year. 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, following the strength shown so-far this summer. Looking back at June, July, August, and September of last year, this years' collections now surpass that level by $4 billion (13 percent).