What Is SDI Tax?

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Meta Title: What Is SDI Tax? (State Disability Insurance Explained)

Meta Description: SDI tax is a California payroll deduction of 1.1% (2025 rate) that funds the state's disability and paid family leave program. Here's who pays it.

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H1

What Is SDI Tax?

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ANSWER SECTION

SDI tax is California's State Disability Insurance — a mandatory employee payroll deduction that funds short-term disability and paid family leave benefits. In 2025, California employees pay 1.1% of wages (up to $153,164 in wages), for a maximum annual contribution of $1,684.80. Your employer withholds this from your paycheck and sends it to the state.

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H2: What Does SDI Tax Pay For?

California SDI provides two main benefits:

1. Disability Insurance (DI):

• Replaces wages when you cannot work due to non-work-related illness, injury, or pregnancy
• Pays approximately 60-70% of wages (depending on income level)
• Benefits last up to 52 weeks

2. Paid Family Leave (PFL):

• Replaces wages when you take time off to care for a seriously ill family member
• Replaces wages for bonding with a new child
• Pays same 60-70% rate as DI
• Benefits last up to 8 weeks

Both programs use the same funding pool from your SDI payroll deductions.

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H2: How Much Is SDI Tax in 2025?

2025 California SDI rates:

• Tax rate: 1.1% of wages
• Maximum wage base: $153,164
• Maximum annual contribution: $1,684.80

Example calculation: If you earn $75,000 in 2025: $75,000 × 1.1% = $825 in SDI tax

If you earn $200,000 in 2025: Only first $153,164 is taxed $153,164 × 1.1% = $1,684.80 (maximum)

Your employer automatically withholds this from each paycheck and reports it in Box 14 of your W-2 as "CA SDI" or "CASDI."

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H2: Who Has to Pay SDI Tax?

SDI tax applies to California employees who:

• Receive wages or salary from a California employer
• Have State Disability Insurance coverage (most employees)

Exemptions from SDI:

• Certain government employees (some opt out)
• Interstate Railroad employees (covered by federal program)
• Some nonprofit religious organization employees
• Self-employed individuals (unless they opt into Elective Coverage)

If you're exempt, your paystub should not show SDI deductions. If you see SDI being withheld, you're paying into the system and are eligible for benefits.

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H2: SDI Tax vs. Other States

California is one of a few states with mandatory disability insurance:

State	Program	Employee Pays?
California	SDI	Yes (1.1%)
New York	DBL/PFL	Yes (0.373% for PFL)
New Jersey	TDI/FLI	Yes (shared cost)
Hawaii	TDI	Yes (varies)
Rhode Island	TDI	Yes (1.1%)

Most other states have no mandatory disability insurance. In those states, you must purchase private disability insurance if you want coverage.

Note: California's SDI rate (1.1%) is in addition to federal FICA taxes (Social Security 6.2% + Medicare 1.45% = 7.65%). These appear separately on your paystub.

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H2: How to Claim SDI Benefits

If you become disabled or need family leave:

1. File a claim at SDI Online (edd.ca.gov) within 49 days of disability/start of leave
2. Provide medical certification from your doctor
3. Wait 7-day waiting period (no benefits paid for first week)
4. Receive payment via EDD Debit Card or direct deposit

2025 benefit amount: 60-70% of wages earned 5-18 months before your claim, depending on income:

• Lower wage earners: ~70%
• Higher wage earners: ~60%

Maximum weekly benefit for 2025: $1,620

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H2: Related Tax Questions

For more details on SDI tax rates and California-specific rules, see our complete guide to SDI tax in California with full rate tables and benefit calculations.

Learn how SDI compares to federal payroll taxes in our guide on what is Medicare tax — covering the 1.45% federal Medicare deduction that appears alongside SDI on your paystub.

California workers should also understand whether California taxes Social Security benefits, as state rules differ from federal taxation.

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