California Tip & Overtime Tax Calculator (2026)

Estimate OBBBA tip tax savings for California tipped workers, plus jump to the overtime tax calculator for California overtime premium deductions ($12,500 cap).

Minimum Wage$16.50/hr

Tipped Min. Wage$16.50/hr

State Income Tax9.3%

Your Information

Hourly Wage (before tips)

Your base pay per hour

Hours Per Week

Average Tips Per Hour

Your average tip earnings per hour worked

Weeks Worked Per Year

Your Annual Tax Savings in California

$7,018

per year in federal income tax on tips

Annual Tip Income

$49,000

Federal Tax Saved on Tips

$7,018

Your Marginal Federal Rate

22.0%

FICA Still Owed on Tips

$3,749

Annual Base Pay

$28,875

Total Annual Income

$77,875

California has a state income tax rate of 9.3%. State tax treatment of tips may vary — check your state's rules.

Tips Tax Deduction in California

Under the One Big Beautiful Bill Act (OBBBA), workers in California who earn tips can deduct 100% of their tip income from federal income tax for tax years 2025 through 2028.

California Minimum Wage for Tipped Workers

The minimum wage in California is $16.50/hour. California does not allow a lower tipped minimum wage — all workers receive the full minimum wage regardless of tip income.

Top Tipped Industries in California

Restaurant servers
Bartenders
Rideshare drivers
Hair stylists

Does California Tax Tips? (State Conformity)

Yes — California still taxes tips. California has not conformed to the federal OBBBA tip deduction. Tips are deductible from federal taxable income, but you still owe California state income tax (rate: 9.3%) on tip income.

State Income Tax Applies to Tips

California has a state income tax rate of 9.3%. While the OBBBA exempts tips from federal income tax, California may still tax tip income at the state level. Check with a local tax professional for details.

How the No Tax on Tips Law Works

What Qualifies

Cash tips received directly from customers
Credit/debit card tips
Tips from tip pools or tip sharing
Service charges distributed as tips

What Doesn't Change

FICA taxes still apply: You still pay 6.2% Social Security + 1.45% Medicare on tip income
Tips must still be reported: Report all tips to your employer and on your tax return
Annual cap: Deduction limited to $25,000 per year in tip income
Income limit: The deduction applies to workers earning less than $150,000/year (single) or $300,000 (married filing jointly)

Overtime Tax Deduction in California (2026)

The same OBBBA Schedule 1-A rules apply nationwide: only the FLSA overtime premium (the half of time-and-a-half) is deductible, up to $12,500 ($25,000 joint), with MAGI phase-outs. California state income tax may still apply to overtime wages even when the federal premium deduction is available.

Use the free Overtime Tax Calculator to estimate federal savings for California workers — including common searches like “california overtime tax calculator.”

Federal Calculators

Compare with the federal-level tools: Tip Tax Savings (Federal) | Overtime Tax Calculator (Federal)