2026 · California
California severance pay tax
Federal 22% plus California's 6.6% supplemental rate. But neither is your real tax rate. This works out what you owe.
California layoff at a glance
| State tax on severance | Flat 6.6% supplemental withholding |
| State income tax | Graduated, up to 13.3% |
| Unemployment weekly max | $450 for up to 26 weeks |
| Unemployment taxed by California? | No |
How California withholds on severance
California withholds a flat 6.6% on supplemental wages like severance. On top of that, the federal government withholds a flat 22% (37% over $1 million) and FICA, 6.2% Social Security up to the $184,500 wage base plus 1.45% Medicare.
California taxes income on a graduated scale topping out at 13.3%, so a large severance can be pushed into that top rate. If you also claim unemployment, California pays up to $450 a week for up to 26 weeks, and does not tax it. That's the California layoff picture in one place, the severance tax here, the unemployment on its own California page.
Worked example: $40,000 severance in California
A single filer, $40,000 severance paid separately, with $60,000 of other 2026 income:
| Federal withholding (22%) | −$8,800 |
| FICA (Social Security + Medicare) | −$3,060 |
| California withholding | −$2,640 |
| Net check | $25,500 |
| What it costs in tax | $14,778 |
Under-withheld by about $278, set that aside now, you will owe it at filing. The withholding is a fixed rate; your actual tax is your marginal rate on the severance stacked on your other income.
Stacking California unemployment on top
California sizes your weekly check off your highest-earning quarter, up to $450 a week, mid-pack nationally (34th of 51). There is no separate dependent add-on. Benefits run up to 26 weeks.
| Weekly benefit range | $40 - $450 |
| How the amount is set | Off your highest-earning quarter |
| Maximum duration | 26 weeks |
| Waiting week | Yes, one unpaid week |
| Dependent allowance | None |
| Taxed by California | No |
Stacked together, that $40,000 severance nets about $25,500 and California's unemployment can add up to $11,700 over 26 weeks, about 9 months of a $4,000 budget before you need a paycheck. File through Employment Development Department (EDD); nail down the exact figure in the runway calculator.
Questions about California severance tax
Is severance taxed higher in California?
No. It's withheld at a flat 22% federally and 6.6% by California, but it's taxed as ordinary income at your normal rates. The worked example on this page shows the gap in dollars: on a $40,000 severance, $8,800 of federal tax is withheld up front while the severance actually costs about $14,778 in tax for that filer. Whichever direction the gap runs, it settles up at filing, a refund if too much was taken, a bill to plan for if too little.
Does California tax my severance?
Yes, California taxes severance as wages. California withholds a flat 6.6% on supplemental wages like severance.
Will I get a refund or owe more?
It depends on your bracket. The flat 22% over-withholds for lower earners (refund) and under-withholds for those in the 32 to 37% brackets (set aside the difference). The crossover sits where your marginal rate passes 22%: below it, every severance dollar was over-withheld and comes back; above it, the flat rate quietly under-collects and the difference lands on your return as a balance due. For the $40,000 example on this page with $60,000 of other income, the calculator's verdict is printed under the worked example. Enter your numbers above to see which way it goes for you.
Your California layoff toolkit
- California unemployment benefits weekly amount and duration
- Runway calculator how long your money lasts
- California paycheck calculator take-home at your next job
- California 1099 tax if you go freelance
An estimate for the 2026 tax year. State supplemental figures from the verified dataset, last verified 2026-07-24. Nothing you enter is stored. Not tax advice.