I own an S Corp in California and put myself on payroll. Why am I getting taxed so much or how do they calc?

See a business tax planning specialist at once!

Don't forget that you have to pay 15.3% FICA taxes on earnings. Isn't it wonderful that the ultra-wealthy want to lower capital gains taxes to a measly 9% while entrepreneurs like yourself window up paying close to 40% at the federal level?

Payroll tax withholding rates are based on "pay period". In short, even though that was likely a one-time check, it is assumed (by the calculation) that you get that check every "pay period" (usually 1 or 2 weeks). So, you are at the highest federal rate (35% or so), plus SSI/Medicaid (about 12%), plus your CA state tax (guessing 8%). End result: withholding for that pay period is 55%.

Wow, a $60K check? Did you only pay yourself once this year?

Irregular checks are taxes 7.65% for fica/mc; 25% for IRS and 5-10% for California. That is NOT 50%.

Did you specify that it was an annual pay period (if it was), not weekly or monthly? The tax calculation is done as if you make that same amount every pay period. If it was calculated even as a monthly check, tax would be huge.

an employee who had a $60K check, once a year would have would have $4590 withheld for FICA, $600 for CASDI

a single person, annual check with no allowances would have $11287.50 withheld, a married person, no allowances $7462.50 withheld

and $1791 for married and $2444 for single for Calif. state income tax

Doesnt sound right...Did you take out medicare and SSA tax? You know you could also pay yourself a 1099 and deduct expenses.