Many types of labor charges are subject to tax. Tax applies to charges for producing, fabricating, or processing tangible personal property for your customers.California follows a state minimum wage law. California law requires employers to provide employees with a pay stub each payday. Calculate the amount the employee is to be paid, adding up all wages earned (regular and overtime) and including all other compensation due. Increases tied to the CPI effective July 1st each following year. Use Gusto's hourly paycheck calculator to determine withholdings and calculate take-home pay for your hourly employees in California. If you have individual or small business IRS or tax concerns, contact our San Jose tax attorney John D. Teter. He has over 30 years of legal experience. The delays continue to this day.