SDI Tax (State Disability Insurance Tax) is a payroll tax in some states (e.g., California) to fund short-term disability benefits for employees, deducted from wages.
- What is SDI tax?
Answer: It is a payroll tax for state disability benefits. - Which states have it?
Answer: States like California, New York, and New Jersey have it. - What is the rate?
Answer: In California, it’s approximately 1.1% of wages up to a cap in 2025. - What does it cover?
Answer: It covers disability, paid family leave, and medical costs. - How does HR manage it?
Answer: HR deducts and remits it to the state.
