What is the California SDI (CASDI) Tax Rate for 2026?
The California State Disability Insurance tax rate for 2026 is 1.3% of all gross wages. There is no taxable wage ceiling and no maximum annual contribution cap. Senate Bill 951 permanently removed the wage limit effective January 1, 2024, meaning every dollar of California employee wages is subject to the full 1.3% deduction. The Employment Development Department administers the program.
2026 California SDI — Key Figures at a Glance
| Parameter | 2026 Value | Details |
|---|---|---|
| Employee CASDI Rate | 1.3% | Applied to all gross wages — no cap |
| Taxable Wage Ceiling | None | Eliminated by Senate Bill 951, effective Jan 1, 2024 |
| Maximum Annual Contribution | No Limit | All earnings taxed at 1.3% regardless of amount |
| Employer SDI Contribution | $0 | 100% employee-funded; employers do not match |
| Maximum Weekly Benefit (WBA) | $1,765.00 | 2026 cap — applies to DI and PFL claims |
| Minimum Weekly Benefit | $50.00 | Applies to earnings between $300–$722.49 in highest quarter |
| PFL Maximum Duration | 8 weeks | Per benefit year for family caregiving and bonding |
| DIEC Premium Rate (Self-Employed) | 8.84% | Applied to net profit from Schedule SE or Schedule C |
| State Average Weekly Wage (SAWW) | $1,789 | Benchmark used to determine maximum benefit caps |
| Program Administrator | EDD | California Employment Development Department |
How Much CASDI Will Be Deducted From My Paycheck?
The formula is flat and unconditional: multiply your gross pay by 0.013. No exemptions apply based on income level. The table below shows exact deductions across common salary ranges for the 2026 payroll year.
| Annual Salary | Per Weekly Paycheck | Per Bi-Weekly Paycheck | Annual CASDI Total |
|---|---|---|---|
| $30,000 | $7.50 | $15.00 | $390.00 |
| $50,000 | $12.50 | $25.00 | $650.00 |
| $75,000 | $18.75 | $37.50 | $975.00 |
| $100,000 | $25.00 | $50.00 | $1,300.00 |
| $150,000 | $37.50 | $75.00 | $1,950.00 |
| $200,000 | $50.00 | $100.00 | $2,600.00 |
| $300,000 | $75.00 | $150.00 | $3,900.00 |
| $500,000 | $125.00 | $250.00 | $6,500.00 |
What Is CASDI Tax on a California Paycheck?
CASDI stands for California State Disability Insurance. It is a mandatory payroll deduction that funds two state-run programs: short-term disability insurance (DI) and Paid Family Leave (PFL). Both programs are administered by the California Employment Development Department and provide partial wage replacement when a covered worker cannot work due to illness, injury, pregnancy, or the need to care for a seriously ill family member or a newborn.
The deduction appears on the earnings statement of virtually every California W-2 employee. Unlike federal FICA taxes — which fund Social Security and Medicare — CASDI funds an entirely separate state pool. The money goes directly into the California Disability Insurance Fund, which pays out billions in benefits each year to eligible claimants statewide.
For 2026, the deduction rate is 1.3% of gross wages. There is no ceiling on how much can be withheld. A worker earning $40,000 annually and one earning $400,000 both pay 1.3% on every dollar — the tax applies equally at every income level under the structure established by Senate Bill 951.
Why Does My Pay Stub Say CASDI Instead of SDI?
SDI and CASDI are the same tax. The label difference comes entirely from payroll software. Platforms like ADP, Gusto, Paylocity, and Paychex prefix the California abbreviation with "CA" to distinguish the state-specific deduction from the generic SDI label used in other states — New Jersey, New York, Hawaii, and Rhode Island each run their own separate disability programs under the same SDI acronym.
When your pay stub reads "CASDI," it confirms you are a covered California employee with the standard 1.3% state deduction applied to your gross wages for that pay period. If your stub shows "SDI" instead of "CASDI," the calculation is identical — it is the same mandatory deduction under a slightly different label. Both terms refer to the California Unemployment Insurance Code program administered by the EDD.
Employees covered by an employer-approved Voluntary Plan are the exception: employees whose employer has obtained approval for a private Voluntary Plan (VP) may see a different label, a different rate, or no SDI deduction at all. Voluntary Plans must provide benefits at least equal to the state plan and must be approved by the EDD. If you see no CASDI line on your California paycheck and you are a W-2 employee, confirm with your HR department whether a Voluntary Plan is in effect.
How California SDI Tax Is Calculated: The 2026 Formula
The calculation has no tiers, no phase-outs, and no exemption thresholds based on income. Multiply your gross pay for the period by 0.013. The result is your CASDI deduction for that paycheck. Do the same for every pay period throughout the year and the sum equals your total annual SDI contribution.
Is CASDI Based on Gross or Net Income?
CASDI is calculated on gross wages — your total compensation before any federal or state income tax withholding is applied. However, certain employer-sponsored pre-tax deductions reduce the taxable wage base. If your employer deducts health insurance premiums under a Section 125 cafeteria plan, your CASDI base may be slightly lower than your total gross earnings on paper. Take-home pay, retirement contributions, and other post-tax deductions have no effect on the CASDI calculation. You can calculate your exact net wages hourly to see how this affects your specific deductions.
Multi-Year SDI Rate History
The rate has increased each year since SB 951 took effect. Knowing this history matters for payroll systems that carry prior-year configurations, and for employees verifying historical withholdings on older W-2 forms.
| Tax Year | Employee Rate | Taxable Wage Cap | Max Annual Contribution |
|---|---|---|---|
| 2023 | 0.9% | $153,164 | $1,378.48 |
| 2024 | 1.1% | None (SB 951) | Uncapped |
| 2025 | 1.2% | None | Uncapped |
| 2026 | 1.3% | None | Uncapped |
Many payroll calculators found online still display the 2024 rate of 1.1% or the 2025 rate of 1.2%. If a calculator shows either of those rates as "current," its math is outdated. For the 2026 payroll year, 1.3% is the only correct rate. By comparison, California employees pay 1.3% on every dollar earned with no ceiling — while states like Texas have no employee state disability insurance tax whatsoever, making California one of the highest-SDI states in the nation.
Who Is Exempt From California SDI Tax?
Most California employees have no exemption option — CASDI withholding is automatic and mandatory. There are, however, three defined categories where the standard state deduction does not apply.
- Federal Government Employees: Workers employed directly by a federal agency are not covered under California's state SDI program and are not subject to CASDI withholding.
- Certain Public Agency Employees: Employees of some local government agencies, school districts, or other public entities may be excluded if their employer has not elected SDI coverage. Coverage varies by agency — check with your HR or benefits administrator.
- Voluntary Plan (VP) Employees: Workers whose employer has obtained EDD approval for a private Voluntary Plan are exempt from the standard state CASDI deduction. The VP must provide equal or superior benefits to the state plan. Some VPs charge employees a lower rate; others charge nothing at all.
Self-employed individuals, independent contractors, and sole proprietors are not covered by default. They are exempt from mandatory CASDI because they have no employer to administer withholding. However, they may opt in voluntarily through the Disability Insurance Elective Coverage (DIEC) program, which operates under a separate rate of 8.84% applied to net profit — covered in the section below.
How to Estimate Your California SDI Weekly Benefit Amount
When you file a disability or Paid Family Leave claim, the EDD does not use your current paycheck to calculate your benefit. It looks backward — specifically at wages you earned during a defined 12-month base period that ended several months before your claim start date. Your weekly benefit amount is derived entirely from those historical earnings, not from what you are earning at the time of your claim.
Step 1 — Identify Your 12-Month Base Period
The base period consists of four consecutive calendar quarters ending approximately five to eighteen months before the first day of your disability or leave. The quarter your claim falls in determines which twelve months the EDD examines.
| Claim Start Quarter | Your 12-Month Base Period |
|---|---|
| January, February, or March | October 1 (two years prior) through September 30 (one year prior) |
| April, May, or June | January 1 through December 31 (prior calendar year) |
| July, August, or September | April 1 (prior year) through March 31 (current year) |
| October, November, or December | July 1 (prior year) through June 30 (current year) |
Step 2 — Find Your Highest-Earning Quarter
Once your base period is established, the EDD identifies the single quarter in which you earned the most. That figure — your highest base-period quarter — is the only number that drives your weekly benefit calculation. Lower-earning quarters in the base period do not reduce your benefit; they simply do not factor into the formula.
Step 3 — Apply the 2026 Sliding-Scale Replacement Rate
The EDD divides your highest-quarter earnings by 13 (the number of weeks in a quarter) to arrive at your average weekly wage. A sliding-scale replacement rate is then applied based on where your highest-quarter total falls. Lower earners receive approximately 90% of their average weekly wage. Higher earners receive approximately 70%, subject to the 2026 maximum cap of $1,765 per week.
| Highest Quarter Earnings | Replacement Rate | Weekly Benefit Amount (WBA) |
|---|---|---|
| Under $300.00 | N/A | Not eligible for benefits |
| $300.00 – $722.49 | Flat rate | $50.00 per week |
| $722.50 – $16,279.90 | ~90% | (Highest Quarter ÷ 13) × 0.90 |
| $16,279.91 – $20,931.30 | Flat rate | $1,127.00 per week |
| $20,931.31 or more | ~70% | (Highest Quarter ÷ 13) × 0.70, capped at $1,765.00 |
Worked Example: $60,000 Annual Salary
A worker earning $60,000 per year accumulates approximately $15,000 in each calendar quarter. That $15,000 highest-quarter figure falls within the 90% replacement band. Dividing by 13 gives an average weekly wage of $1,153.85. Applying the 90% rate produces a weekly benefit amount of approximately $1,038 per week — before any applicable offsets for part-time earnings.
What About Part-Time Return-to-Work Adjustments?
If you return to work part-time while receiving SDI benefits, your benefit is not automatically cancelled — but it may be reduced. The EDD calculates whether your combined income (part-time wages plus your full benefit) exceeds your pre-disability weekly wage. If it does, the benefit is reduced by exactly that excess amount.
Part-Time Offset Example
- Pre-disability weekly wage: $1,000
- Full approved weekly benefit: $600
- Part-time wages earned this week: $500
- Combined income: $500 + $600 = $1,100
- Excess over pre-disability wage: $1,100 − $1,000 = $100
- Adjusted weekly benefit: $600 − $100 = $500
- Total weekly income: $500 wages + $500 benefit = $1,000
If your part-time wages were $300 instead, your combined income ($300 + $600 = $900) would not exceed your pre-disability wage of $1,000 — and you would receive your full $600 benefit that week.
California SDI for Self-Employed Workers: DIEC Premium Calculator
Independent contractors, freelancers, and sole proprietors are not covered by standard CASDI withholding. No employer deducts the tax on their behalf, and no default coverage applies. The EDD offers an optional enrollment path called Disability Insurance Elective Coverage (DIEC), which gives self-employed Californians access to the same DI and PFL benefits available to W-2 employees.
How the DIEC Premium Is Calculated
DIEC premiums are based on net profit — the figure reported on your federal Schedule SE or Schedule C. The 2026 premium rate is 8.84% of net earnings. For self-employed individuals with net profits at or below $4,600, the EDD charges a flat annual minimum premium of $406.64 regardless of actual earnings. Above that threshold, the 8.84% rate applies to the full net profit figure.
| Annual Net Profit | Annual Premium | Quarterly Payment | Formula Applied |
|---|---|---|---|
| $4,000 or less | $406.64 | $101.66 | Flat minimum premium |
| $4,600 | $406.64 | $101.66 | Flat minimum premium (threshold) |
| $30,000 | $2,652.00 | $663.00 | $30,000 × 0.0884 |
| $62,000 | $5,480.80 | $1,370.20 | $62,000 × 0.0884 |
| $100,000 | $8,840.00 | $2,210.00 | $100,000 × 0.0884 |
Premiums are paid quarterly. The EDD bases your annual premium on the net profit figure from your most recently filed federal income tax return — specifically Schedule SE for self-employment tax or Schedule C for business income. If you have not yet filed for the prior year, the EDD will estimate your premium based on reported income until the actual return is processed.
Whether DIEC makes financial sense depends on your income level and health situation. At $62,000 in annual net profit, you pay $5,480.80 per year for coverage that could pay up to $1,765 per week if you become unable to work. A single 8-week PFL claim at the maximum rate would return $14,120 — more than two and a half times the annual premium at that income level.
Are California SDI and PFL Benefits Taxable?
The tax treatment of California disability benefits is one of the most misunderstood areas of state payroll law. The answer depends entirely on which type of benefit you received — standard disability insurance, Paid Family Leave, or disability benefits acting as a substitute for unemployment insurance. Each has a different federal tax outcome.
| Benefit Type | Federal Income Tax | California State Tax | Form Issued |
|---|---|---|---|
| Standard Disability Insurance (DI) | Not taxable | Not taxable | No form issued |
| DI Acting as UI Substitute | Taxable | Not taxable | Form 1099G from EDD |
| Paid Family Leave (PFL) | Taxable | Not taxable | Form 1099G from EDD |
Standard disability insurance benefits — those paid because of your own illness, injury, or pregnancy — are not subject to federal income tax and are not subject to California state income tax. The EDD does not issue a Form 1099G for these payments, and you do not report them on either your federal or state return.
Paid Family Leave benefits follow a different rule. PFL is federally taxable at your marginal income tax rate because it is classified as a wage-replacement benefit rather than a disability payout. The EDD reports all PFL payments on a Form 1099G, which you receive in January of the following year. You owe federal income tax on this amount — but California does not tax it at the state level.
The third scenario involves standard DI acting as a substitute for unemployment benefits. This occurs when a claimant would otherwise qualify for unemployment insurance but receives SDI instead. In this narrow circumstance only, the DI payments become federally taxable in the same manner as unemployment compensation, and the EDD issues a Form 1099G accordingly.
How to Deduct CASDI on Your Federal Tax Return (Schedule A)
Every dollar you contribute to California SDI through payroll withholding is potentially deductible on your federal return as a state income tax payment. The deduction is not automatic — it requires itemizing on Schedule A of Form 1040 rather than claiming the standard deduction. For high-income W-2 earners contributing thousands of dollars in CASDI annually, this deduction can produce a meaningful reduction in federal taxable income.
Step-by-Step: Claiming Your CASDI Deduction
- Locate Box 14 on your W-2: Your employer reports total CASDI withheld during the tax year in Box 14 of your W-2 form. The label reads "CASDI," "SDI," or occasionally "CA SDI." Note the exact dollar amount — this is your deductible figure.
- Open Schedule A (Form 1040): Schedule A is where you itemize deductions. Navigate to the "Taxes You Paid" section, which covers state and local taxes.
- Enter the amount on Line 5a: Line 5a is labeled "State and local income taxes." Enter your total CASDI contribution from Box 14 here. Select the checkbox confirming this is an income tax payment — not a general sales tax. CASDI qualifies as a state income tax under IRS guidance.
- Add other state taxes and apply the SALT cap: Combine your CASDI deduction with any California state income tax withheld (from Box 17 of your W-2) and any property taxes paid during the year. The total of all state and local taxes claimed on Schedule A is capped at $10,000 per return ($5,000 if married filing separately) under the current federal SALT limitation.
- Compare to the standard deduction: Itemizing only produces a tax benefit if your total Schedule A deductions exceed the federal standard deduction for your filing status. If your SALT total, mortgage interest, and charitable contributions combined exceed the standard deduction, itemizing — and claiming your CASDI — reduces your federal taxable income.
One scenario that causes confusion: if you worked for two or more California employers during the year and your combined wages exceeded the point where your total CASDI withholding was overpaid, you may be entitled to a refund. Because there is no wage cap in 2026, excess withholding from multiple employers can only occur if a payroll error was made — not as a result of surpassing a contribution ceiling as in prior years. If you believe you have been over-withheld, review your W-2 forms against the 1.3% formula and contact the EDD or your payroll administrator directly.
Frequently Asked Questions: California CASDI and SDI Tax
Yes — CASDI and SDI are the same mandatory California payroll deduction. CASDI is simply the payroll software abbreviation for California State Disability Insurance. Platforms like ADP, Gusto, and Paychex add the "CA" prefix to differentiate it from state disability programs in New Jersey, New York, Hawaii, and Rhode Island, which use the same SDI acronym for their own separate programs.
The California SDI tax rate for 2026 is 1.3% of all gross wages. There is no taxable wage ceiling and no annual contribution cap. Senate Bill 951 permanently eliminated the wage limit beginning January 1, 2024. Prior to that change, the tax applied only to wages up to a set annual threshold — in 2023, that cap was $153,164. That structure no longer exists for 2024, 2025, or 2026.
CASDI is a post-tax deduction in practical terms. The withholding is calculated on your gross wages before federal and state income tax is applied, but CASDI itself is not treated as a pre-tax reduction for income tax purposes. You do not exclude your CASDI contribution from taxable income on your W-2 — you pay income tax on the gross wage amount, and the CASDI deduction comes out separately. You can, however, deduct the total annual CASDI paid on Schedule A of your federal return as a state income tax payment.
Employees pay 100% of California SDI through automatic paycheck deductions. Employers do not contribute to and do not match the SDI fund. The employer's only role is administrative — they deduct the 1.3% from employee wages each pay period and remit the collected amount to the Employment Development Department. This makes California SDI entirely employee-funded, unlike federal FICA taxes where employers match the employee contribution dollar for dollar.
Yes, for the vast majority of California W-2 employees. Participation is mandatory under the California Unemployment Insurance Code. You cannot opt out, reduce your contribution rate, or defer the withholding. The three categories exempt from mandatory withholding are federal government employees, certain local public agency workers whose employer has not elected SDI coverage, and employees covered under an EDD-approved employer Voluntary Plan that replaces the state program.
CASDI is calculated on gross wages — your total earnings before any income tax withholding. It is not calculated on your take-home pay or your net income after deductions. One exception applies: if your employer administers a Section 125 cafeteria plan and deducts health insurance or other qualified benefits before calculating wages, those pre-tax employer-plan deductions may slightly reduce the CASDI wage base. Post-tax deductions — including retirement contributions to a Roth 401(k), loan repayments, or garnishments — have no effect on the CASDI calculation.
For standard disability insurance benefits — those paid due to your own non-work-related illness, injury, or pregnancy — the answer is no at both the federal and California state level. These payments are not taxable and are not reported as income on any return. Paid Family Leave (PFL) benefits are different: they are federally taxable as wage replacement income and reported on a Form 1099G. California does not tax PFL payments at the state level. The one exception for standard DI is when it substitutes for unemployment insurance — in that case, the DI payments become federally taxable and a Form 1099G is issued.
At a $60,000 annual salary, your highest base-period quarter contains approximately $15,000 in wages. The EDD divides that by 13 to get your average weekly wage of $1,153.85. Since $15,000 falls within the 90% wage replacement band, the estimated weekly benefit amount is approximately $1,038 per week. This estimate assumes consistent quarterly earnings and a claim start date that aligns your highest-earning quarter with the relevant base period. The actual amount is determined by the EDD based on verified W-2 wage records — use the Benefit Estimator tab above for your specific figures.
Follow these three steps. First, identify your 12-month base period using the calendar quarter in which your claim begins — the table in the Benefit Estimation section above maps each claim quarter to its corresponding base period. Second, find the single highest-earning quarter within that 12-month window. Third, divide that figure by 13 to get your average weekly wage and apply the sliding-scale rate: approximately 90% if your highest quarter is between $722.50 and $16,279.90, or approximately 70% if it exceeds $20,931.30. The result is your estimated weekly benefit amount, subject to the 2026 maximum of $1,765 per week.
Yes, if you itemize deductions on Schedule A of federal Form 1040. Your total annual CASDI contributions appear in Box 14 of your W-2, labeled CASDI or SDI. Transfer that amount to Schedule A, Line 5a, and select the State Income Taxes checkbox. The deduction is subject to the federal $10,000 SALT cap, which limits your combined state income taxes, local taxes, and property taxes to $10,000 per return. If your total state and local tax burden already reaches the cap without CASDI, the additional CASDI deduction provides no further federal benefit.
The 3.3% figure refers to California's standard withholding rate on certain payments to nonresident individuals and businesses — it is a separate, unrelated tax administered by the California Franchise Tax Board, not the EDD. It applies to nonresident income from California sources such as rent, royalties, or business income paid to out-of-state recipients. It has no connection to CASDI, SDI, or payroll disability withholding. If you saw 3.3% on a payroll document alongside CASDI, the two figures represent entirely different taxes.
Yes, through the Disability Insurance Elective Coverage (DIEC) program. Self-employed individuals, sole proprietors, and independent contractors are not covered by default but may apply voluntarily through the EDD. The 2026 DIEC premium rate is 8.84% of net profit from Schedule SE or Schedule C. For net profits at or below $4,600, the EDD charges a flat minimum annual premium of $406.64. Premiums are paid quarterly. Enrolled DIEC participants qualify for the same DI and PFL weekly benefit amounts available to standard W-2 employees, calculated using the same sliding-scale formula applied to their reported net earnings. You can estimate your full federal self-employment tax alongside these premiums.
Methodology and Data Sources
All calculations on this page use the 2026 statutory rates published by the California Employment Development Department. The employee withholding rate of 1.3%, the elimination of the taxable wage ceiling under Senate Bill 951, the weekly benefit amount sliding scale, and the DIEC premium rate of 8.84% are sourced directly from official EDD publications. Rates are verified against the EDD's Contribution Rates and Benefit Amounts reference page and the EDD Rates and Withholding tables.
The weekly benefit amount calculator applies the 2026 EDD sliding-scale formula exactly: the flat $50 band for highest-quarter earnings between $300 and $722.49, the 90% replacement band for earnings between $722.50 and $16,279.90, the flat $1,127 band for earnings between $16,279.91 and $20,931.30, and the 70% replacement band (capped at $1,765) for earnings above $20,931.30. These thresholds are taken from the EDD's official Calculating DI Benefit Payment Amounts guidelines.
Calculator results are estimates only. Actual SDI deductions are determined by your employer's payroll system based on your specific gross wage configuration. Actual weekly benefit amounts are determined by the EDD based on verified quarterly wage records from your base period. This tool does not account for Section 125 pre-tax benefit adjustments, Voluntary Plan modifications, or federal income tax withholding elections. Consult a licensed CPA or the EDD directly for binding payroll and benefit determinations.
This page was last updated for the 2026 payroll year. California adjusts SDI rates and benefit parameters annually, typically announced by the EDD each December. All figures will be reviewed and updated upon publication of the 2027 EDD rate notice.