California Contractor Tax Guide
Verified marginal bracket rate at $75,000 of state taxable income as of 2026-09-23 — not the top bracket rate. Actual brackets vary by income.
Combined Social Security and Medicare tax (Self-Employment).
Progressive marginal rates, applied separately to taxable income.
How 1099 Taxes Work in California
As a freelancer, consultant, or gig worker in California, you are technically your own employer. This means you aren't subject to standard W-2 withholding from a "boss." Instead, you must manually track your earnings and determine federal and any applicable state obligations. Check the California Franchise Tax Board for state-specific rules.
California-Specific Considerations
Business Entity Tax
Every LLC — including a single-member LLC taxed as a disregarded entity — owes an $800/year minimum franchise tax to the FTB (Form 3522), due whether or not the LLC has any income. Once California-source gross receipts exceed $250,000, an additional LLC fee applies on top of the $800: $900 ($250K–$499,999), $2,500 ($500K–$999,999), $6,000 ($1M–$4,999,999), up to $11,790 at $5M+. A plain sole proprietorship with no LLC owes none of this.
Local Income Tax
None. California has no city or county income tax on individuals. (Some cities, including San Francisco, levy a local gross-receipts business tax on companies operating there, but most solo contractors fall under its small-business exemption.)
Filing & Estimated Payments
Individual returns use Form 540. California does not use an even 25/25/25/25 split like the IRS. Its schedule is front-loaded: 30% due April 15, 40% due June 15, 0% due September 15, and the remaining 30% due January 15 — meaning California expects 70% of your year's estimated tax paid in by mid-June.
Worth Knowing
California's “ABC test” (AB 5) presumes any worker is an employee, not a contractor, unless the hiring business can prove all three of: the worker is free from its control, the work is outside its usual business, and the worker has an independently established trade. It's one of the strictest worker-classification laws in the country and directly affects whether certain California gigs can legally be structured as 1099 work at all.
Worked Example: $75,000 California Contractor
On $75k of net 1099 profit (single filer, no deductions), the calculator estimates $6,504 in federal income tax, $10,597 in self-employment tax, and $4,985 in state tax — leaving about $52,914 take-home.
Sources: California FTB — LLCs, California FTB — Form 3536 Instructions (LLC Fee), California EDD — AB 5, California FTB — Form 540-ES Instructions
Quarterly Estimated Payments
Federal estimated payments generally apply when you expect to owe at least $1,000, subject to withholding and safe-harbor rules. Typical federal due dates are below; weekends and holidays can shift them. January is in the following year. State requirements vary:
Deductions and Expenses in California
The single best way to lower your tax bill in California is to optimize your business deductions. Common expenses you can subtract from your gross income include:
Home Office
A proportional amount of rent or mortgage for your dedicated workspace.
Software & Tools
Subscriptions, laptops, and professional design or dev tools.
Travel & Auto
Mileage driven for client meetings or local hardware purchases.
Internet & Phone
The percentage of your utility bills used primarily for business.
Official California Tax Resources
California Franchise Tax Board
Visit the official state portal to download forms, pay online, or contact support.
Calculate Your Net Pay
Ready to see an estimate of how much you'll keep after California taxes? Try our free take-home estimator.
Open CalculatorDoes California tax income?
California uses progressive tax brackets, so the rate varies by income level. Our estimator uses 9.3% as an illustrative rate for a moderate contractor income, not the top bracket rate.