The Overpaid Executive Tax (also referred to as the Overpaid Executive Gross Receipts Tax) was approved by San Francisco voters on November 3, 2020 and became effective on January 1, 2022. Generally, it imposes an additional gross receipts tax on taxable gross receipts from businesses in which the highest-paid managerial employee, within or outside of San Francisco, earns more than 100 times the median compensation of employees based in San Francisco.
The Overpaid Executive Tax is filed as part of the Annual Business Tax Return. To learn more, view our informational video.
Except for Administrative Office Tax filers, a business exempt from the Gross Receipts Tax as a small business enterprise is also generally exempt from the Overpaid Executive Tax.
Additionally, the Overpaid Executive Tax does not apply to:
- Certain nonprofit organizations and businesses exempt from local taxation, such as banks and insurance companies; and
- Receipts that are excluded from gross receipts for purposes of the gross receipts tax.
Overpaid Executive Tax rates vary and are based on the compensation ratio of the highest-paid managerial employee, within or outside of San Francisco, to the median employee based in the City.
Additional Gross Receipts Tax Rates
Executive Pay Ratio | Additional Gross Receipts Tax Rate |
Greater than 100:1 but less than or equal to 200:1 | 0.1% |
Greater than 200:1 but less than or equal to 300:1 | 0.2% |
Greater than 300:1 but less than or equal to 400:1 | 0.3% |
Greater than 400:1 but less than or equal to 500:1 | 0.4% |
Greater than 500:1 but less than or equal to 600:1 | 0.5% |
Greater than 600:1 | 0.6% |
Additional Administrative Office Tax Rates
Executive Pay Ratio | Additional Payroll Tax Rate |
Greater than 100:1 but less than or equal to 200:1 | 0.4% |
Greater than 200:1 but less than or equal to 300:1 | 0.8% |
Greater than 300:1 but less than or equal to 400:1 | 1.2% |
Greater than 400:1 but less than or equal to 500:1 | 1.6% |
Greater than 500:1 but less than or equal to 600:1 | 2.0% |
Greater than 600:1 | 2.4% |
Highest-Paid Managerial Employee is the individual employee or officer with managerial responsibility in a business function, within or outside of San Francisco, who received the most compensation for a tax year.
Compensation includes wages, salaries, commissions, bonuses, property issued or transferred in exchange for the performance of services (including but not limited to stock options) as well as compensation for services to owners of pass-through entities, and any other form of remuneration paid to employees for services.
Information reported in a filing, including compensation reported, is kept confidential under Article 6, Section 6.22-1 of the Business Tax & Regulation Code.
Estimated business tax payments are due April 30th, July 31st and October 31st. Residential Landlords with less than $2,190,000 in gross receipts are exempt from estimated quarterly business tax payments and will not receive an estimated business tax payment notice. 2024 estimated business tax amounts due will be payable on the business tax payment portal after March 1, 2024 for businesses that file their 2023 Annual Business Tax Return on or before February 29, 2024. For business that file their 2023 Annual Business Tax Return after March 1, 2024, estimated business tax amounts due will be payable on the business tax payment portal 48 hours after the 2023 Annual Business Tax Return is submitted. Learn more about quarterly estimated payments.
Article 33: Overpaid Executive Gross Receipts Tax Ordinance
Estimate Impact of Overpaid Executive Tax
This tool is for estimation purposes only and is not a replacement for filing a return. Use the tool by inputting the compensation amounts requested and the amount of San Francisco gross receipts, then click the "Submit" button. The tool will then show sample estimated Overpaid Executive Tax obligations below the button.
Informational Video
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