SDI Tax

What Does SDI Tax Mean?

An SDI tax is a State Disability Insurance tax. It is a payroll tax required by select states. The money from an SDI tax is put into a state disability insurance program that provides financial assistance to workers who lose the ability to work due to physical or mental disability not directly related to their profession. The only state that has a tax specifically called an SDI tax is California, but several other states have temporary disability insurance (TDI) that functions similarly. An SDI tax is paid through employee payroll as opposed to workers’ compensation insurance, which is paid for by employers.

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Which States Have an SDI Tax?

There are five states in the United States that currently provide a temporary disability insurance plan.

What Is the SDI Tax Rate?

Temporary disability insurance programs vary by state, so each has its own rate for taxation. Here are the tax rates as of 2020 for each state with a temporary disability program:

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