About California State Disability Insurance (CA SDI)
California State Disability Insurance (CA SDI) is a program that provides short-term income replacement benefits to eligible workers who are unable to work due to non-work-related illnesses, injuries, or pregnancy. CA SDI benefits are paid out for up to 52 weeks and the amount of the benefit is based on the worker’s earnings. In the next couple of years, there are going to be significant changes.
Changes in 2024:
In September 2022, Governor Newsom signed SB 951, repealing the wage ceiling for contributions into SDI funds beginning January 1, 2024. This means all wages paid will be subject to California’s SDI tax.
This change will classify employees into three categories for the SDI benefits paid and short-term disability insurance:
- Employees on parental leave
- Employees taking time off to care for injured and ill family members
- Employees unable to work due to injury or health condition
To pay for these increased benefits, SB 951 will eliminate the taxable wage limit on individuals’ wages subject to the annual California SDI withholding rate. The SDI rate for 2023 is 0.9% with a maximum wage base of $153,164 and a maximum amount to withhold of $1,378.48 ($153,164 x 0.9%). Beginning in 2024, all California wages will be subject to the 0.9% SDI tax.
You can download our Burnham flyer here with more information on the impact on the individual and the employer.
Paid Family Leave Resources:
Or you can find more resources on the CA Paid Family Leave here.
ADDITIONAL INFORMATION
For questions regarding this Legislative Update or any other related compliance issues, please contact your Burnham Benefits Consultant or Burnham Benefits at 949‐833‐2983 or inquiries@burnhambenefits.com.