California has adopted new budget measures, as part of Assembly Bill No. X4 17 (ABX4 17) employers are now required to withhold a greater portion of employee wages. This new law increases the applicable withholding rate on employee wages by 10%. Also, for supplemental wages, the withholding rate is increased to 6.6% (formerly 6%); and for stock options and bonus payments, the withholding rate is increased to 10.23% (formerly 9.3%). Each of these changes applies to amounts paid on or after November 1, 2009.

View Withholding Tables and revised Tax Forms here.

For an explanation of supplemental wages click here to download PDF.

Read more about the budget legislation here.

Article courtesy Payroll Masters

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