Self-employment tax in California
California freelancers face three layers of tax: federal self-employment tax, federal income tax, and California state income tax on top. Unlike no-tax states, CA taxes your 1099 income at progressive rates — so it pays to set aside more.
What a California freelancer owes
- Federal self-employment tax of 15.3% (Social Security + Medicare).
- Federal income tax on your net profit (after the deductible half of SE tax).
- California state income tax from 1% up to 12.3% (plus a 1% surcharge on income over $1M).
Estimate your California taxes
Free 1099 self-employment tax calculator — add California's 1%–12.3% state rate. No sign-up.
Enter California's 1%–12.3% in the State Tax field for a full estimate.
States with no income tax are set to 0%. Estimate only — adjust for local taxes.
Estimates use 2026 US federal figures (IRS Rev. Proc. 2025-32): self-employment tax of 15.3% (12.4% Social Security up to the $184,500 wage base + 2.9% Medicare) plus federal income tax on your net profit after the standard deduction. State and local taxes are only included if you set a state rate above. Simplified estimate for planning only — not tax advice.
Guide: Self-employment tax in California — the federal bill plus the state bill
California self-employed workers pay the same federal self-employment tax as everyone else — and then a state income tax bill on top. Planning for only one of the two is the most common reason California freelancers and contractors end the year short.
The federal part works like this. On your net profit (income minus business expenses), you pay self-employment tax of 15.3%, applied to 92.35% of your profit. That covers Social Security and Medicare. You also pay federal income tax on your profit after deducting half of the SE tax. Both are paid through quarterly estimated payments to the IRS (Form 1040-ES), due in April, June, September, and January.
The California part is separate. California does not charge its own self-employment tax, but it taxes your self-employment profit as ordinary income at rates from 1% up to 12.3%, with an additional 1% Mental Health Services Tax on income over $1 million. California estimated payments run on their own schedule with an uneven split that trips people up: you pay 30% of the year's estimated state tax in April, 40% in June, nothing in September, and 30% in January (Form 540-ES). Missing the larger June installment is a classic cause of underpayment penalties. Two more California specifics: if you operate as an LLC, California charges an $800 annual minimum franchise tax, plus an additional fee based on gross income for larger LLCs. And unlike the federal system, California does not conform to every federal deduction — the federal qualified business income deduction, for example, does not apply on your California return.
Worked example. A Los Angeles designer nets $80,000. Federal SE tax: $80,000 × 92.35% × 15.3% ≈ $11,304. Federal income tax after the half-SE-tax deduction and standard deduction might be roughly $8,000–$9,000. California income tax on the same profit, with no QBI deduction at state level, might run roughly $3,500–$4,500. Total: around $23,000–$24,000 — close to 30% of profit, split across two different payment calendars.
Staying on top of two systems takes clean monthly numbers. MoneyFeed is a WhatsApp tool that works with the bookkeeping app you already use: text expenses or snap receipts in chat, export tidy CSV, Excel, or PDF records, and use the totals to size both your IRS and FTB payments. At year-end, hand your CPA the records and let them file.
FAQ
No. California taxes your self-employment profit as regular income (rates 1%–12.3%, plus 1% on income over $1 million). The 15.3% self-employment tax is federal only.
April 15 (30% of the annual estimate), June 15 (40%), September 15 (0%), and January 15 (30%), using Form 540-ES. The uneven split is different from the federal four equal installments.
California LLCs owe an $800 annual minimum franchise tax, and LLCs with higher gross income owe an additional income-based fee. This is separate from your personal income tax on the same business profit.
No. The QBI deduction is a federal deduction only; California does not conform to it, which is one reason your state bill may look higher than expected relative to your federal one.
The FTB charges an underpayment penalty that works like interest on the shortfall for each period. Paying at least what you owed the prior year (the safe harbor) generally protects you from the penalty.
California freelancer tax — FAQ
Do freelancers pay state income tax in California?
Yes. California has a progressive state income tax from 1% up to 12.3% (a 1% Mental Health Services surcharge applies over $1 million), on top of federal taxes.
How much should a California freelancer set aside for tax?
Because of the extra state layer, many CA freelancers set aside 30%+ of net income. Your exact rate depends on your bracket — estimate the federal portion with our calculator and add your CA rate.
What taxes do I owe as a California 1099 worker?
Federal self-employment tax (15.3%), federal income tax, and California state income tax — usually via quarterly estimated payments to both the IRS and the FTB.
Figures are 2026 headline guidance for freelancers and the self-employed, not tax advice. Check current IRS and state rules or a CPA for your situation.