The full California self-employment tax picture
| Tax type | Rate | Who collects it |
|---|---|---|
| Federal SE tax | 15.3% of net profit × 0.9235 | IRS |
| Federal income tax | 10–37% depending on income | IRS |
| California income tax | 1%–13.3% depending on income | California FTB |
| California SDI (optional) | ~0.9% if you opt in voluntarily | California EDD |
| CA LLC franchise tax | $800/year minimum (if you have an LLC) | California FTB |
The combined effective rate for most California self-employed people earning $50,000–100,000 in net profit is 35–45% after deductions. That's not marginal — that's the realistic chunk that leaves your account between federal and state taxes.
California income tax brackets (2025)
California has nine income tax brackets, plus a Mental Health Services surcharge at the top:
| Taxable income (single) | CA income tax rate |
|---|---|
| $0 – $10,412 | 1% |
| $10,413 – $24,684 | 2% |
| $24,685 – $38,959 | 4% |
| $38,960 – $54,081 | 6% |
| $54,082 – $68,350 | 8% |
| $68,351 – $349,137 | 9.3% |
| $349,138 – $418,961 | 10.3% |
| $418,962 – $698,274 | 11.3% |
| $698,275 – $1,000,000 | 12.3% |
| Over $1,000,000 | 13.3% (includes 1% surcharge) |
California doesn't conform to the federal SE deduction: Federally, you deduct half of SE tax from your gross income before applying income tax brackets. California does not allow this deduction on your state return — which means your California taxable income is slightly higher than your federal taxable income.
- →The full California self-employment tax picture
- →California income tax brackets (2025)
- →California's quarterly payment schedule — it's different
- →The California LLC minimum franchise tax
- →Real example: California freelancer, $60,000 net profit
- →California vs. other states for the self-employed
- →Frequently asked questions
- →The bottom line
California's quarterly payment schedule — it's different
This is the most common mistake California freelancers make. California's estimated tax schedule is not four equal payments. The FTB requires:
| Installment | Due date | % of estimated CA tax |
|---|---|---|
| 1st installment | April 15 | 30% |
| 2nd installment | June 15 | 40% |
| 3rd installment | No payment due | 0% |
| 4th installment | January 15 | 30% |
If you only pay federal quarterly on the federal schedule (25% each quarter), you may be underpaying California in Q1 and Q2 — and overpaying Q3 (when no California payment is due). Pay federal and California on their respective schedules separately.
Pay California at FTB.ca.gov: California estimated payments go to the Franchise Tax Board, not the IRS. Use Web Pay at FTB.ca.gov or FTB Form 540-ES. Federal payments go to IRS.gov/payments. They are separate — paying the IRS does not pay California.
The California LLC minimum franchise tax
If you have an LLC in California, you owe the FTB a minimum $800 franchise tax every year — even if your LLC made zero profit. This is due by the 15th day of the 4th month after your LLC's fiscal year ends (April 15 for calendar-year LLCs).
There's also an additional LLC fee if your gross receipts exceed $250,000:
| Gross receipts | Additional LLC fee |
|---|---|
| Under $250,000 | $0 (just the $800 minimum) |
| $250,000 – $499,999 | $900 |
| $500,000 – $999,999 | $2,500 |
| $1,000,000 – $4,999,999 | $6,000 |
| $5,000,000+ | $11,790 |
For California side hustlers earning under $250,000, the cost is just the $800 minimum per year. This is significantly higher than the annual LLC cost in most other states — something to factor into the LLC vs. sole proprietor decision if you're based in CA.
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Let's see what a single California freelancer earning $60,000 in net profit actually owes:
| Tax | Calculation | Amount |
|---|---|---|
| Federal SE tax | $60,000 × 0.9235 × 15.3% | $8,478 |
| SE deduction (saves) | $8,478 × 50% | −$4,239 |
| Federal standard deduction | Single 2025 | −$15,000 |
| Federal taxable income | $60,000 − $4,239 − $14,600 | $41,161 |
| Federal income tax | 10/12% brackets | ~$4,786 |
| CA taxable income | $60,000 − $5,202 (CA std ded) | ~$54,798 |
| CA income tax | 1–8% brackets | ~$2,800 |
| Total tax | ~$16,064 |
That's an effective rate of about 26.8% of net profit — before any business deductions. With $10,000–15,000 in legitimate deductions (home office, equipment, software), the effective rate drops to 20–24%.
California vs. other states for the self-employed
California has some of the highest combined rates for self-employed people. For context:
- Texas, Florida, Nevada, Washington: No state income tax — federal SE tax only
- New York City residents: State + city income tax can rival California
- California: High state income tax, $800 LLC minimum, unique quarterly schedule
The differences are real but shouldn't drive major life decisions on their own. What matters is maximizing deductions, paying quarterly to avoid penalties, and knowing the CA-specific quirks (quarterly schedule, LLC cost, FTB deadlines).
Frequently asked questions
What is the self-employment tax rate in California?
Federal SE tax (15.3%) applies to all self-employed workers nationwide. California adds state income tax of 1%–13.3% on top. There's no separate "California SE tax."
Do California freelancers pay state income tax on self-employment income?
Yes — at 1%–13.3% depending on income. CA doesn't allow the federal SE deduction on state returns, so California taxable income is slightly higher than federal.
When are California estimated tax payments due?
California uses 30%/40%/0%/30%: April 15 (30%), June 15 (40%), no September payment, January 15 (30%). Pay at FTB.ca.gov — separate from the IRS.
Does California have an LLC minimum franchise tax?
Yes — $800/year minimum regardless of profit, plus an additional fee if gross receipts exceed $250,000.
What is the combined CA + federal tax rate for self-employed?
Most California freelancers earning $40,000–100,000 in net profit pay an effective combined rate of 30–40% after deductions.
The bottom line
Being self-employed in California means federal SE tax plus one of the highest state income tax rates in the country. The key traps: California's uneven quarterly schedule (30/40/0/30), the $800 LLC minimum, and the lack of an SE tax deduction on your state return.
Set aside 35–40% of net self-employment income to cover both federal and California taxes. Pay the FTB separately from the IRS. And if you have a California LLC, don't forget the $800 franchise tax — it's due whether you earned $5 or $5 million.
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