Comparison•2025 Tax Year•Last verified: January 2026
California vs New York: Side Hustle Tax Comparison 2025
Compare California and New York taxes for freelancers and gig workers. Both have high taxes - see which costs more for your side hustle income.
California and New York are America's two most populous high-tax states, home to the nation's largest economies and highest costs of living. For side hustlers choosing between the coasts—or considering leaving either state—understanding how their tax burdens compare is essential.
California's rates reach 13.3% (the highest in the nation), while New York's top rate is 10.9%—but NYC residents add another 3.876% on top. Depending on where you live in New York, you might actually pay more than Californians.
**Why This Comparison Matters:**
Both states are major migration sources as high earners seek tax relief:
- **CA top rate**: 13.3% (highest state rate in the US)
- **NY + NYC combined**: Up to 14.776% (higher than CA for city residents)
- **NY state only**: 10.9% (lower than CA for non-NYC residents)
- **Both losing residents**: Net outmigration to lower-tax states
- **Remote work impact**: Tech and finance workers can now choose
For side hustlers, the comparison depends heavily on whether you're in NYC or elsewhere in New York. NYC residents may actually envy Californians.
Side-by-Side Tax Comparison
| Metric | California | New York |
|---|---|---|
| State Income Tax Rate | 1% - 13.3% | 4% - 10.9% |
| City Tax (NYC) | None | 3.078% - 3.876% |
| Combined Top Rate | 13.3% | 14.776% (NYC) |
| Common Side Hustler Rate | 6% - 9.3% | 5.85% - 6.85% (+NYC) |
| Est. Tax on $25K Side Hustle (CA)* | ~$11,358 | — |
| Est. Tax on $25K Side Hustle (NYC)* | — | ~$11,715 |
| Est. Tax on $25K Side Hustle (Upstate)* | — | ~$10,746 |
| Property Tax (Avg Rate) | 0.71% | 1.40% |
| Sales Tax (State + Local Avg) | 8.82% | 8.52% |
*Assumes single filer with $60,000 W-2 income + $15,000 net side hustle income. Actual taxes vary based on deductions, filing status, and total income.
California Analysis
**California Tax Analysis for Side Hustlers**
California has the highest top state income tax rate in the nation, with progressive rates that hit side hustlers hard.
**Key California Tax Facts (2025):**
- **Tax Type**: Progressive (9 brackets)
- **Rate Range**: 1% to 13.3%
- **Common Side Hustler Rate**: 6% to 9.3%
- **Mental Health Tax**: Additional 1% over $1 million
- **No Local Income Tax**: At least CA cities don't add more
**Example**: If you earn $80,000 from your W-2 job and $25,000 from side hustle income (net of expenses) in California:
- Federal SE Tax: ~$3,533
- Federal Income Tax on side income: ~$5,500
- California State Tax: ~$2,325
- **Total Tax on Side Hustle: ~$11,358** (45.4% effective rate)
California offers the Bay Area tech ecosystem and LA entertainment industry, but the tax cost is among the nation's highest.
New York Analysis
**New York Tax Analysis for Side Hustlers**
New York's state rates are lower than California's, but NYC's additional tax can push the total burden even higher.
**Key New York Tax Facts (2025):**
- **State Tax Type**: Progressive (9 brackets)
- **State Rate Range**: 4% to 10.9%
- **NYC Additional Tax**: 3.078% to 3.876%
- **Combined NYC Rate**: Up to 14.776%
- **Upstate Rate**: 10.9% max (no city tax)
**Example (NYC resident)**: Same scenario—$80,000 W-2 job and $25,000 from side hustle income:
- Federal SE Tax: ~$3,533
- Federal Income Tax on side income: ~$5,500
- NY State Tax: ~$1,713
- NYC Tax: ~$969
- **Total Tax on Side Hustle: ~$11,715** (46.9% effective rate)
**Example (Upstate NY)**: Same income, no NYC tax:
- NY State Tax only: ~$1,713
- **Total Tax on Side Hustle: ~$10,746** (43.0% effective rate)
NYC residents pay MORE than Californians. Upstate New Yorkers pay less.
Calculate Your Side Hustle Taxes
Use our calculator to see exactly what you'd owe in each state. Try entering your numbers, then switch between California and New York to compare.
Which State Is Right for Your Side Hustle?
**California May Be Better If You:**
- Work in tech (Bay Area ecosystem is unmatched)
- Work in entertainment (LA is the center)
- Comparing to living IN New York City specifically
- Value coastal weather and outdoor lifestyle
- Have Prop 13 protected property (lower property taxes)
**New York (Upstate) May Be Better If You:**
- Can live outside NYC (avoid city tax)
- Work in finance with occasional NYC access needed
- Want lower state rates than California
- Prefer four seasons and East Coast proximity
- Don't need to be in a major metro daily
**Important Considerations:**
1. **NYC is the key variable**: NYC residents pay more than Californians. Upstate New Yorkers pay less. This single factor determines which state "wins."
2. **Property taxes flip in NY's favor... sort of**: CA's Prop 13 keeps assessed values low for long-term owners. New buyers in CA pay market-rate assessments.
3. **Cost of living**: Both states have expensive metros (SF, LA, NYC) and cheaper areas. Compare specific cities, not just states.
4. **Exit audits**: Both CA and NY aggressively audit former residents who move to low-tax states. If leaving either, establish genuine new residency.
5. **Industry access**: Tech favors CA (though NY has fintech). Finance favors NY. Entertainment favors CA. Match your freelance niche to the ecosystem.
Frequently Asked Questions
Which state has higher taxes - California or New York?
It depends on where in New York. NYC residents pay a combined state + city rate up to 14.776%, which exceeds California's 13.3% top rate. However, upstate New York's top rate is 10.9% with no city tax, making it lower than California. For typical side hustlers, NYC is more expensive than CA, but the rest of NY is cheaper.
Should I move from California to New York for tax savings?
Only if you're moving to upstate New York or the suburbs. Moving from California to NYC would likely increase your tax burden, not decrease it. If taxes are your primary concern, both states lose to no-tax alternatives like Texas, Florida, or Nevada.
Which state is worse for side hustle income specifically?
For side hustle income that stacks on top of W-2 wages, NYC is typically worse because the city tax applies to all income. In California, you're paying the state's high rates but no additional city income tax. Upstate NY is the best of these three options for side hustlers.
Related Comparisons
Sources
- • California Franchise Tax Board - 2025 Tax Rates
- • New York State Department of Taxation and Finance - 2025 Tax Rates
- • NYC Department of Finance - City Income Tax Rates
- • IRS Publication 334 - Tax Guide for Small Business
- • Tax Foundation - State Tax Data 2025