What is the average income in California?

The median household income in California is approximately $91,905 (2024), ranking 5th among US states. However, after adjusting for cost of living, California drops to near the bottom. San Jose has the highest metro median at $143,000, while the Inland Empire is around $75,000.

Why is California so expensive?

Housing is the primary driver — California's median home price of $785,000 is nearly double the national average. Restrictive zoning and building regulations limit supply, while high demand from tech and entertainment industries drives prices up. Add the nation's highest state income tax (up to 13.3%) and above-average costs for groceries, gas, and utilities.

What is California's income tax rate?

California has the highest state income tax in the US — a graduated system with rates from 1% to 13.3%. The 13.3% rate applies to income over $1 million. The top rate for most high earners is 9.3% (on income over $66,295). California also has no tax on Social Security benefits.

Living in California: Income, Housing, Taxes & Cost of Living (2026)

California has the largest economy of any U.S. state (and the 5th largest in the world), the highest top income tax rate (13.3%), and some of the most expensive housing markets in the country. The Bay Area, Los Angeles, and San Diego metros dominate the job market in tech, entertainment, biotech, and finance, with salaries to match — but housing costs absorb a massive share of those earnings. The Inland Empire, Central Valley, and Sacramento offer meaningfully lower costs while still providing access to California’s job markets. The state has no tax on Social Security but taxes all other retirement income. California is a financial powerhouse for high earners in the right industries, but the all-in cost (income tax + housing + insurance) makes it one of the most expensive places to live in the country.

California at a Glance

Metric	Value	National Rank
Population (2024)	38.9 million	1st
Median household income	$91,905	5th
Median home price	$785,000	2nd highest (behind Hawaii)
Cost of living index	142	3rd highest
State income tax	1-13.3%	Highest in US
Sales tax (state + local avg)	8.68%	Above average
Property tax (effective rate)	0.71%	Below average (Prop 13)

Income in California

Median Household Income by Metro

Metro Area	Median Household Income	Cost of Living Index	Adjusted Income*
San Jose-Sunnyvale	$143,000	168	$85,119
San Francisco-Oakland	$130,800	180	$72,667
San Diego	$89,500	144	$62,153
Los Angeles-Long Beach	$76,400	146	$52,329
Sacramento	$82,400	115	$71,652
Riverside-San Bernardino	$75,200	105	$71,619
Fresno	$62,400	98	$63,673
Bakersfield	$60,800	95	$64,000
Stockton	$70,200	104	$67,500
Santa Barbara	$84,000	155	$54,194

Adjusted income = income normalized by cost of living relative to national average of 100.

Top-Paying Industries

Industry	Average Salary (CA)	National Average	CA Premium
Software engineering	$155,000	$127,260	+22%
Biotechnology	$110,000	$85,000	+29%
Entertainment/Film	$95,000	$72,000	+32%
Healthcare (physician)	$285,000	$252,000	+13%
Legal	$142,000	$120,000	+18%
Registered nurse	$120,450	$81,220	+48%

Housing in California

Home Prices by City

City/Area	Median Home Price	Price per Sq Ft	Median Rent (2BR)	Price-to-Income
San Jose	$1,450,000	$785	$3,200	10.1
San Francisco	$1,350,000	$920	$3,500	10.3
Los Angeles	$920,000	$625	$2,800	12.0
San Diego	$850,000	$575	$2,600	9.5
Orange County	$1,050,000	$650	$2,900	10.5
Santa Barbara	$1,200,000	$720	$2,800	14.3
Sacramento	$510,000	$310	$1,800	6.2
Riverside	$530,000	$285	$1,900	7.1
Fresno	$370,000	$215	$1,350	5.9
Bakersfield	$330,000	$195	$1,250	5.4
State Average	$785,000	$440	$2,200	8.5
National Average	$412,000	$210	$1,650	5.4

Monthly Housing Cost Comparison

Scenario	California ($785K, 10% down)	National ($412K, 20% down)	Monthly Difference
Mortgage payment (7.40%, Freddie Mac average, Oct. 8, 2026)	$4,892	$2,282	+$2,610
Property taxes	$464	$340	+$124
Insurance	$200	$150	+$50
PMI (if applicable)	$353	$0	+$353
Total monthly	$5,909	$2,772	+$3,137

Taxes in California

Income Tax Brackets (2025)

Taxable Income (Single)	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 – $698,271	11.3%
$698,272 – $1,000,000	12.3%
Over $1,000,000	13.3%

Total Tax Burden (High Tax State)

Gross Income	Federal Tax	CA Income Tax	FICA	Property Tax ($785K home)	Total Rate
$75,000	$8,115	$3,195	$5,738	$5,574	30.2%
$100,000	$13,615	$5,570	$7,650	$5,574	32.4%
$150,000	$25,915	$11,160	$10,878	$5,574	35.7%
$200,000	$37,915	$17,750	$12,804	$5,574	37.0%
$300,000	$68,415	$28,260	$14,378	$5,574	38.9%

California vs Texas: Tax Comparison ($150K Income)

Tax Type	California	Texas
State income tax	$11,160	$0
Property tax (on $500K home)	$3,550	$9,500
Sales tax (estimated)	$3,000	$2,800
Total state/local taxes	$17,710	$12,300
Difference		TX saves $5,410/year

Cost of Living

Category	California Index	National Average	Annual Difference
Housing	202	100	+$17,136
Groceries	106	100	+$300
Transportation	118	100	+$1,800
Healthcare	108	100	+$400
Utilities	92	100	-$320
Overall	142	100	+$19,316

Affordability Analysis

Income Needed to Live Comfortably

Household Type	San Francisco	Los Angeles	Sacramento	Fresno
Single person	$105,000	$78,000	$58,000	$48,000
Couple	$155,000	$118,000	$88,000	$72,000
Family of 4	$210,000	$155,000	$115,000	$92,000

Can You Afford a Home?

Household Income	Max Affordable Home	Where in CA?
$75,000	$295,000	Bakersfield, Fresno outskirts
$100,000	$390,000	Fresno, Sacramento suburbs, Inland Empire outskirts
$150,000	$590,000	Sacramento, Riverside, Stockton
$200,000	$785,000	State average — not Bay Area or LA coast
$300,000	$1,180,000	Most of LA, San Diego, Sacramento prime
$400,000+	$1,570,000+	Bay Area (still tight for SF/SJ)

California’s “Hidden” Affordable Areas

Area	Median Home Price	Cost of Living Index	Proximity to Major City
Bakersfield	$330,000	95	1.5 hrs to LA
Fresno	$370,000	98	3 hrs to SF, 3.5 hrs to LA
Sacramento (suburbs)	$470,000	110	State capital, growing tech
Riverside/Inland Empire	$530,000	105	1 hr to LA
Redding	$355,000	98	3 hrs to Sacramento
Stockton	$430,000	100	1.5 hrs to SF

California Pros and Cons

Financial Pros	Financial Cons
Highest wages in many industries	Highest state income tax (13.3% top rate)
Prop 13 caps property tax increases	Extremely high housing costs
No tax on Social Security	High gas prices ($4.50-$5.50+/gallon)
World-class job market (tech, entertainment, biotech)	High sales tax (8.68% avg)
Strong worker protections, high minimum wage ($16.50+)	Traffic/commute costs in major metros
Diverse economy — recession-resistant	Cost of living 42% above national average

Written by WealthVieu

WealthVieu researches and writes data-driven personal finance guides using primary sources including the IRS, Bureau of Labor Statistics, Federal Reserve, and Census Bureau.

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