Quick Answer
State Disability Insurance (SDI) is a payroll deduction that provides partial wage replacement if you can't work due to non-work-related illness or injury. In California, employees pay 0.9% of wages up to $153,164 in 2026, which equals a maximum annual deduction of $1,378.
Best Answer
Sarah Chen, CPA
Best for employees in states with mandatory SDI programs who want to understand their deduction
What is State Disability Insurance (SDI)?
State Disability Insurance (SDI) is a payroll deduction that provides short-term disability benefits when you can't work due to non-work-related illness, injury, or pregnancy. Think of it as insurance that replaces part of your income when you're temporarily unable to work due to medical reasons.
Currently, only a few states require SDI contributions: California, Hawaii, New Jersey, New York, Rhode Island, and Washington. If you work in one of these states, you'll see this deduction on your paystub.
How much does SDI cost?
The amount varies by state, but California has the largest program. Here's what employees pay in 2026:
California SDI:
Example: California SDI deduction calculation
Let's say you earn $75,000 annually in California:
If you earn $200,000 annually:
What benefits does SDI provide?
SDI typically replaces 55-60% of your average weekly wages, subject to maximum benefit amounts. According to the Social Security Administration, the average SDI benefit duration is 6-12 months.
California SDI benefits in 2026:
Key factors that affect your SDI deduction
What conditions qualify for SDI benefits?
Important: Work-related injuries are covered by workers' compensation, not SDI.
What you should do
Check your paystub to see if you're paying SDI. If you live in California, Hawaii, New Jersey, New York, Rhode Island, or Washington, you likely are. Keep records of your SDI contributions, as they may be tax-deductible on your state return.
If you're planning a move or job change, factor SDI costs into your take-home pay calculations. Use our paycheck calculator to see how SDI affects your net pay in different states.
Key takeaway: SDI costs California employees 0.9% of wages up to $153,164 annually, providing partial income replacement for non-work-related disabilities lasting up to 52 weeks.
Key Takeaway: SDI costs California employees 0.9% of wages up to $153,164 annually, providing partial income replacement for non-work-related disabilities lasting up to 52 weeks.
SDI rates and maximums by state for 2026
| State | Employee Rate | Max Taxable Wages | Max Annual Deduction | Max Weekly Benefit |
|---|---|---|---|---|
| California | 0.9% | $153,164 | $1,378 | $1,540 |
| New York | 0.5% | $142,800 | $714 | $170 |
| New Jersey | 0.47% | $151,900 | $714 | $759 |
| Rhode Island | 1.1% | $81,500 | $897 | $978 |
| Hawaii | 0.5% | $57,500 | $288 | $746 |
| Washington | 0.4% | $162,000 | $648 | $1,327 |
More Perspectives
Sarah Chen, CPA
Best for remote workers who may work across multiple states with different SDI requirements
SDI for remote workers across state lines
As a remote worker, your SDI obligations depend on where your employer withholds taxes, not necessarily where you live or work. This creates unique situations that traditional employees don't face.
Key rule: You typically pay SDI in the state where your employer is required to withhold your income taxes. According to IRS Publication 15, this is usually determined by where you perform services or where your employer is located.
Common remote worker scenarios
Scenario 1: You live in Texas (no SDI) but work remotely for a California company
Scenario 2: You live in California but work for a Texas-based company
What to check on your paystub
Look for these SDI-related deductions:
Action steps for remote workers
1. Review your paystub: Confirm which state's SDI you're paying
2. Check your employment agreement: Verify tax withholding arrangements
3. Consult HR: Ask about SDI obligations if you move states
4. Plan for moves: Factor SDI changes into relocation decisions
Key takeaway: Remote workers pay SDI based on where their employer withholds taxes, which may differ from their home state, creating potential gaps or duplications in coverage.
Key Takeaway: Remote workers pay SDI based on where their employer withholds taxes, which may differ from their home state, creating potential gaps or duplications in coverage.
Sarah Chen, CPA
Best for people who moved between states and need to understand changing SDI obligations
SDI when you move between states
Moving between states can significantly change your SDI situation. You might start paying SDI for the first time, stop paying it entirely, or switch between different state programs.
Moving TO an SDI state
Example: You move from Texas (no SDI) to California in July 2026
Moving FROM an SDI state
Example: You move from California to Florida (no SDI) in March 2026
Moving between SDI states
Example: Moving from New York to California
Important timing considerations
Mid-year moves affect annual limits:
What to track when moving
1. Final paystubs: Keep records of SDI paid in your old state
2. Benefit eligibility: Note cutoff dates for accessing benefits
3. New state requirements: Research SDI obligations in your new location
4. Employment changes: Update W-4 and state withholding forms
Key takeaway: Moving between states can start, stop, or change your SDI deductions mid-year, affecting both your take-home pay and benefit eligibility without any carryover between state programs.
Key Takeaway: Moving between states can start, stop, or change your SDI deductions mid-year, affecting both your take-home pay and benefit eligibility without any carryover between state programs.
Sources
- IRS Publication 15 — Employer's Tax Guide for payroll withholding requirements
- Social Security Administration Disability Statistics — Annual Statistical Report on disability programs
Related Questions
Reviewed by Sarah Chen, CPA on February 28, 2026
This content is for educational purposes only and is not a substitute for professional tax advice. Consult a qualified tax professional for advice specific to your situation.