This page summarizes the application of San Francisco’s Overpaid Executive Gross Receipts Tax for tax years beginning in 2025 following the adoption of Proposition M. View pre-Proposition M rules for 2024 and prior years here.
The Overpaid Executive Gross Receipts Tax imposes an additional gross receipts tax on businesses engaging in business within the City, generally measured by the business’s gross receipts from taxable business activities attributable to the City, where the business’s highest-paid managerial employee, within or outside of San Francisco, had compensation for the tax year that was more than 100 times the median compensation of employees based in San Francisco for the tax year. The exemptions, rates and calculations were modified with passage or Proposition M in November 2024.
The Overpaid Executive Gross Receipts Tax is filed as part of the Annual Business Registration and Tax Form.
For 2025, persons other than lessors of residential real estate are required to file a return if in the tax year they were engaged in business in San Francisco, were not otherwise exempt, and had more than $5,000,000 in combined taxable San Francisco gross receipts.
A business, other than a business subject to the administrative office tax, exempt from the Gross Receipts Tax as a small business enterprise is also generally exempt from the Overpaid Executive Gross Receipts Tax. Additionally, a business is exempt if it meets both of the following criteria:
- 1,000 or fewer U.S. employees; or
- $1 billion or less in gross receipts reported on U.S. federal income tax returns
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 Gross Receipts 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 Overpaid Executive Gross Receipts Tax Rates
| Executive Pay Ratio | 2025 & 2026 | 2027 | 2028 |
| Greater than 100:1 but less than or equal to 200:1 | 0.020% | 0.021% | 0.021% |
| Greater than 200:1 but less than or equal to 300:1 | 0.040% | 0.042% | 0.043% |
| Greater than 300:1 but less than or equal to 400:1 | 0.060% | 0.062% | 0.064% |
| Greater than 400:1 but less than or equal to 500:1 | 0.080% | 0.083% | 0.086% |
| Greater than 500:1 but less than or equal to 600:1 | 0.100% | 0.104% | 0.107% |
| Greater than 600:1 | 0.120% | 0.125% | 0.129% |
Additional Overpaid Executive Administrative Office Tax Rates
| Executive Pay Ratio | 2025 & 2026 | 2027 | 2028 |
| Greater than 100:1 but less than or equal to 200:1 | 0.080% | 0.083% | 0.086% |
| Greater than 200:1 but less than or equal to 300:1 | 0.160% | 0.166% | 0.171% |
| Greater than 300:1 but less than or equal to 400:1 | 0.240% | 0.250% | 0.257% |
| Greater than 400:1 but less than or equal to 500:1 | 0.320% | 0.333% | 0.343% |
| Greater than 500:1 but less than or equal to 600:1 | 0.400% | 0.416% | 0.428% |
| Greater than 600:1 | 0.480% | 0.499% | 0.514% |
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.
To determine the Highest-Paid Managerial Employee and Compensation of this employee, Compensation shall not be annualized or converted to a full-time equivalency.
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.
Median compensation is based on the full-time and part-time employees who are based in the City during the tax year, adjusted to reflect full-time, full-year earnings. Compensation paid to the company’s highest-paid managerial employee is excluded from the median calculation, even if that individual is based in San Francisco.
Estimated business tax payments are due April 30th, July 31st and October 31st. Residential Landlords with $5,000,000 or less in gross receipts in the current or prior tax year are generally exempt from estimated business tax payments. Learn more about estimated quarterly payments.
Article 33: Overpaid Executive Gross Receipts Tax Ordinance
History of the Overpaid Executive Gross Receipts Tax
In November 2020, San Francisco voters approved the Overpaid Executive Gross Receipts Tax, imposing an additional tax beginning in 2022. In November 2024, San Francsico voters approved Proposition M, which modified which businesses are exempt, how the highest paid executive salary is calculated, and lowered rates.
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