1. What is SDI Tax?

SDI (State Disability Insurance) Tax is a payroll tax that funds disability insurance programs in certain states. It provides short-term benefits to eligible workers who are unable to work due to non-work-related illness, injury, or pregnancy.

2. How Does the Calculator Work?

The calculator uses the SDI Tax formula:

Where:

• \( \text{Earnings} \) — Employee's gross earnings subject to SDI tax ($)
• \( \text{SDI Rate} \) — Current SDI tax rate (%)

Explanation: The calculation is straightforward - multiply earnings by the SDI rate (expressed as a decimal).

3. Importance of SDI Tax Calculation

Details: Accurate SDI tax calculation ensures proper withholding from employee paychecks and compliance with state disability insurance requirements.

4. Using the Calculator

Tips: Enter earnings in dollars and the current SDI rate as a percentage. Both values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: Which states have SDI tax?
A: Currently California, Hawaii, New Jersey, New York, and Rhode Island have state disability insurance programs.

Q2: Who pays SDI tax?
A: In most states, employees pay the tax through payroll deductions. Some states require employer contributions.

Q3: What's the typical SDI tax rate?
A: Rates vary by state and year. For example, California's rate for 2023 is 0.9% of wages up to the taxable wage limit.

Q4: Is there a wage base limit for SDI tax?
A: Yes, most states cap the amount of wages subject to SDI tax each year.

Q5: Can self-employed people pay SDI tax?
A: In some states, self-employed individuals can opt into the disability insurance program.