California vs Oregon: Taxes & Take-Home Pay 2026

California vs Oregon: two high income tax states

Oregon is one of the few states where moving from California does not cut your income tax, and at most incomes it raises it. Oregon’s rates (4.75%, 6.75%, 8.75%, 9.90%) climb fast: single filers pay 8.75% on taxable income above $11,400. California starts lower but reaches higher, to 13.3%.

Oregon’s offsetting advantage is that it has no sales tax at all, against an average combined 9.03% in California. For a household that spends heavily on taxable goods, that can matter as much as the income tax difference.

Worked example: single filer, $150,000

Standard deductions; the Portland column assumes a Multnomah County resident inside Metro.

• At this income Oregon state tax is $2,986 higher than California’s. Oregon’s federal tax subtraction, which the table does not include, would lower the Oregon figure for filers who qualify.
• Portland adds Metro’s Supportive Housing Services tax and Multnomah County’s Preschool for All tax above their thresholds, which is why the Portland column is $523 lower than the rest of Oregon.
• Without sales tax, spending $40,000 a year on taxable goods saves about $3,612 in Oregon compared with California’s average rate.

How the income tax gap changes with income

Because Oregon’s brackets are narrow and its standard deduction is small ($2,900 single), Oregon taxes most incomes more heavily than California, whose lower brackets are wider. Oregon’s top 9.9% rate starts at $125,000 for single filers, while California’s rates only pass it from 10.3% (above $384,109 of taxable income). By this site’s calculation, California’s income tax overtakes Oregon’s for a single filer at around $775,000 of wages, ignoring Oregon’s federal tax subtraction.

Payroll deductions compared

California withholds SDI at 1.3% of all wages. Oregon has two smaller payroll taxes: Paid Leave Oregon at 0.6% up to $184,500 of wages and the statewide transit tax at 0.1% of all wages. At $150,000 that is $1,050 in Oregon against $1,950 in California.

Big purchases and the no-sales-tax advantage

Oregon’s lack of sales tax matters most on large purchases. A $40,000 taxable purchase costs about $3,612 in California sales tax at the average combined rate, and $4,100 in Los Angeles. In Oregon it costs nothing in sales tax. Over several years of furniture, electronics, appliances and everyday taxable goods, the saving can rival the income tax difference for a middle-income household.

Retirement income: little difference

Both states exempt Social Security and both tax pensions, 401(k) and IRA withdrawals at their regular rates. A retiree moving from California to Oregon does not gain much on income tax; the bigger change is Oregon’s lack of sales tax. Retirees who want lower income tax in the Pacific Northwest usually look at Washington instead, which taxes none of these.

Filing in the move year and cross-border work

Each state taxes the income that belongs to it, so a mid-year mover files two part-year returns rather than choosing one.

• California: Form 540NR for the part-year, covering income while resident and California-source income afterwards.
• Oregon: Form OR-40-P for part-year residents, reporting all income while an Oregon resident and Oregon-source income otherwise.
• Working in Oregon while living in Washington (the Vancouver–Portland commute) means filing Oregon Form OR-40-N as a nonresident; Oregon taxes those wages.
• Southern Oregon residents who work across the line in California file a California 540NR for that work; a credit for tax paid to the other state keeps the same wages from being taxed twice.