New California Tax Withholdings Effective November 1, 2009

California has announced and released new personal income tax withholding tables effective for wages paid on November 1 through December 31, 2009.  The withholding rates have been increased by 10% in order to accelerate tax collections by the State and to prevent under withholding by employees. While the withholding rates have increased, the underlying state tax rates that determine the taxes employees owe in 2009 have not changed.

The changes include:

  • An increase in the CA Withholding tax rates from 6.25 to 6.875% for wages paid on or after November 1, 2009.
  • The Exemption amount has changed from $1.90/weekly to $2.90/weekly
  • An increase in the rate for bonus payments and stock options from 9.3% to 10.23%
  • An increase in the tax rate on other supplemental wages such as overtime, commission or vacation pay from 6% to 6.6%

More information can be found on the CA website including FAQs:

For Sage Accpac US Payroll users,  these changes have been incorporated into the November 1, 2009 payroll tax update that are current on the Payroll Update Plan (PUP).  You may download according to this new tax table schedule at (select the "Download Tax Table" link at the top of the page). This update is available via download only and it does not require an activation code.

Please call our office Support line at 866.436.3530 dial 1 from the main menu for assistance to deploy this new tax update.

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