California Employee Cost Calculator
California has the highest employment costs in the US. Calculate employee costs with $16 minimum wage (higher in SF, LA), state unemployment insurance (1.5%-6.2%), Employment Training Tax (0.1%), and State Disability Insurance.
$16.00/hr
3.40%
1.50% -6.20%
$7,000
Enter salary and state, then click Calculate
Ready to run payroll in California?
Once you know the true employee cost, the next job is paying people correctly. Full-service payroll software can help with pay runs, tax filings, W-2s, new-hire reporting, and state unemployment details.
Disclosure: some payroll links may be affiliate links, at no extra cost to you.
Key Facts About Hiring in California
Minimum wage: $16.00/hour (higher in some cities)
SUI rates: 1.5% to 6.2%
Additional SDI tax: 1.1% (employee-paid)
ETT tax: 0.1% on first $7,000
Most expensive state for employment costs
2026 California Employer Cost Snapshot
California is usually a high-cost hiring state because employers must plan around a high statewide minimum wage, local wage ordinances, California UI/ETT rules, workers' compensation coverage, and city-level payroll complexity in large metros.
Benefits are modeled at 18% for this example. Use the calculator above to replace this with your actual health insurance, retirement, and PTO assumptions.
New employers generally start with a 3.4% UI rate on the first $7,000 of wages.
The Employment Training Tax adds another small employer-paid tax on the same UI wage base.
Local minimum wages in cities such as San Francisco, Los Angeles, and San Jose can exceed the statewide rate.
Workers' compensation pricing can be material in construction, logistics, healthcare, and restaurant roles.
- Register with the California Employment Development Department before running payroll.
- Confirm whether local wage ordinances apply to the employee's work location.
- Budget separately for workers' compensation, because it is not included in SUI.
- Review ETT, SDI withholding, and paid sick leave rules before the first paycheck.
- For office roles, employer payroll taxes are often predictable, but benefits and local wage rules move the total cost most.
- For field or hourly roles, workers' compensation and overtime patterns can matter more than the state UI amount.
- California pages should link naturally to construction, retail, healthcare, and payroll software content because those searchers often need compliance help after estimating cost.
Ready to run payroll in California?
Once you know the true employee cost, the next job is paying people correctly. Full-service payroll software can help with pay runs, tax filings, W-2s, new-hire reporting, and state unemployment details.
Disclosure: some payroll links may be affiliate links, at no extra cost to you.
Official California payroll sources
Frequently Asked Questions - California
Calculate California Costs by Industry
Workers' compensation rates, turnover, and compliance requirements vary significantly by industry. See industry-specific costs for California.
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