CASDI, or CA-SDI, stands for California State Disability Insurance.
Employees who can’t work because of a temporary non-work-related illness or injury can apply for short-term disability insurance through CASDI.
The state disability insurance program allows California employees to collect weekly, tax-free benefits until they’re ready to return to work or until their benefits expire (for up to 52 weeks or the amount in their taxable wage base period, whichever is less). The California SDI benefit payments are equal to around 70 to 90 percent of an eligible worker’s average gross income in a quarter. (Note: They aren’t taxable by the Internal Revenue Service (IRS), unless those benefits are received when an individual is already collecting unemployment benefits.)
Employees pay for the program through a state income tax that’s withheld from each paycheck. (Tip: Many small business payroll providers can automatically handle CASDI deductions for employers.)
The amount withheld will appear on an employee’s pay stub as “CASDI-E,” which stands for “California State Disability Income tax; Employee contribution.” It’s usually listed in the deductions section of a pay stub.
Keep reading to learn the basics of the CASDI tax and what your responsibilities are as an employer in California.
How is CASDI different from paid family leave (PFL) in California?
CASDI funds both of the state’s disability programs: disability insurance (DI) and paid family leave (PFL). The main difference between the programs is their purpose.
The DI program provides wage replacement benefits to employees who can’t work due to non-work-related illnesses and injuries, as well as health conditions like pregnancy and childbirth. The PFL program provides wage replacement benefits to employees who take time off work to bond with a new child, care for a family member, or support a military family member deploying to a different country.
Under CASDI, some women who give birth can qualify for both DI—to heal and recover from giving birth—and PFL to bond with their new child.
If you qualify for PFL for any reason, you can receive benefits for up to eight weeks in a 12-month period, with a maximum weekly benefit of $1,681. Learn more about California’s PFL program here.
Related: What is the Family and Medical Leave Act (FMLA)?
Who pays for CASDI?
Employees pay for CASDI—not employers.
As a California employer, you deduct the CASDI payroll taxes (as well as California Paid Family Leave) from each employee’s wages each pay period. If you use an online payroll service, it can usually take care of deducting the SDI tax for you.
When employees fill out information for CASDI on their W-2 form, they must enter the dollar amount withheld in Box 14. This allows them to claim it as an itemized deduction for state and local income taxes. The amount will be subtracted from their adjusted gross income to lower their total tax bill.
How much do employees pay for CASDI, and how is it withheld?
According to the State of California Employment Development Department (EDD), the employee contribution rate (or SDI rate) in 2025 is 1.2 percent of an employee’s taxable wage per year, up from 1.1 percent in 2024. The maximum weekly benefit amount is $1,681.
The contribution amount is withheld from the wages of employees who are covered by disability insurance and paid family leave.
In 2024, California eliminated the maximum contribution amount and the taxable wage ceiling.
2025 | 2024 | |
Employee contribution rate | 1.2% | 1.1% |
Maximum weekly benefit (MWB) | $1,681 | $1,620 |
Maximum benefit amount (MWB x 52) | $87,412 | $84,240 |
Who is eligible for CASDI?
Citizenship and immigration status don’t affect disability leave eligibility. Employees who are unable to work due to a non-work-related illness, injury, or pregnancy may be eligible for short-term disability insurance under CASDI.
To qualify for the state’s DI program, an employee must:
Be unable to perform their regular work for at least eight consecutive days
Have earned at least $300 in wages during the previous 12 months, from which CASDI was withheld through payroll deductions
Have lost wages due to their disability
Be employed or looking for work when they apply
Be under the care of a licensed physician, practitioner, or religious practitioner during the first eight days of their disability
Make the claim within 49 days of the date the disability started, and no earlier than nine days
Have their physician or practitioner complete a medical certification of the disability.
To qualify for the state’s PFL program, an employee must:
Be unable to do their regular work
Have lost wages because they need to bond with a new child, care for a seriously ill family member, or support a family member in the US armed forces who’s deploying to another country
Be employed or actively searching for employment when the leave starts
Have earned at least $300 and paid into the SDI program in the last 18 months
Are independent contractors eligible for CASDI?
If you or your worker is self-employed or works as an independent contractor, you have the option of paying into the EDD’s Disability Insurance Elective Coverage (DIEC) program.
This program provides DI and PFL coverage when you aren’t required to pay into state disability insurance (SDI). You pay for coverage through quarterly premiums.
For more information, visit the DIEC Forms and Publications page.
How much can I receive in CASDI benefits, and for how long?
The amount of money you receive in CASDI benefits depends on your annual income. Your weekly benefit amount is 70-90% (depending on how much you make) of the wages you earned in the period five to 18 months before your claim start date.
The maximum amount of time you can receive disability benefits is 52 weeks. However, the actual amount of time you’re eligible depends on your base period and your doctor’s note. You can estimate your weekly benefit amount using the EDD’s benefit calculator.
For PFL, you can receive benefits for up to eight weeks in a 12-month period. You can use the EDD’s PFL calculator to estimate your benefits.
Are CASDI benefits considered taxable income?
No, your CASDI benefits aren’t considered taxable income—you don’t have to report them. There’s one exception: if you receive unemployment insurance benefits, get a disability that prevents you from working, and then start receiving DI benefits, a portion of your DI benefits will be reported for tax purposes.
If this is the case, the EDD will notify you.
How do I file a CASDI claim, and how long does it take to receive benefits?
You can file a disability claim by applying on the EDD website. You’ll need to gather the following information to apply online:
Identity documents and Social Security number
Wages you expect to be paid by your employer while you’re not working
Employer information
Physician information
Workers’ compensation claim details, if relevant
After you apply online, you’ll need to ask your physician to submit a medical certification to confirm your disability. Once the EDD receives your application and physician certification, they’ll begin to process your claim.
Within two weeks, the EDD will mail you a packet of papers to review. If you spot any errors with your personal information on your claim form, you need to let them know right away. If your application is approved, you’ll start receiving benefits payments about two weeks from the time you applied.
Keep in mind that there’s a seven-day unpaid waiting period with every new claim. That means the first seven days of the program are unpaid, so your payments don’t technically start until your eighth day on leave.
What about applying for PFL?
You can also apply for the PFL program on EDD.ca.gov. In addition to providing your personal, employer, and physician information, you’ll also need to provide documentation related to your bonding, care, or military assist claim.
As with the DI program, it takes the EDD about two weeks to respond to a PFL application and issue payment.
What are my CASDI responsibilities as an employer?
As an employer, you don’t pay for CASDI. However, you do need to withhold and send employee contributions to the EDD.
You’ll also need to give employees certain information about the laws and regulations related to employment, benefits, and working conditions. This includes posting and providing the following:
Notice to Employees: Unemployment Insurance/Disability Insurance/Paid Family Leave (DE 1857A): This poster lists an employee’s right to claim UI, DI, and PFL benefits. If your employees aren’t covered by UI, you need to post the Notice to Employees (DE 1858).
Disability Insurance Provisions (DE 2515): Give this brochure to new hires and anyone who asks for time off due to a non-work-related illness, injury, pregnancy, or childbirth.
Paid Family Leave Benefits (DE 2511): Give this brochure to new hires and anyone who asks for time off to bond with a new child or to care for a seriously ill family member.
You can order these free posters and brochures through the EDD’s Online Forms and Publications page or by calling 1-800-480-3287. Or you can download and print DI Forms and Publications and PFL Forms and Publications.
When an employee files a claim, you’ll need to respond to the following:
Notice to Employer of Disability Insurance Claim Filed (DE 2503): You’ll receive this form after an employee files a DI claim. You must complete and return it to the EDD within two working days using either SDI Online or the paper form to verify the information on the employee’s claim.
Notice of Paid Family Leave (PFL) Claim Filed (DE 2503F): You’ll receive this form after an employee files a PFL claim. You need to complete and return the paper form to the EDD within two working days to verify the information on the employee’s claim.
If you have employees working in San Francisco, you may be required to supplement wages if an employee receives PFL benefits for bonding with a new child through birth, adoption, or foster care placement.
Visit the EDD’s PFL employers’ page for more information.
Can my company opt out of CASDI?
You can opt out of CASDI and create a private plan for voluntary disability insurance (known as a voluntary plan) if you meet certain requirements.
A voluntary plan must:
Provide all the benefits of SDI
Include at least one benefit that is better than SDI
Not cost employees more than SDI
Be approved by a majority of your employees before it goes into effect
The primary benefit of a voluntary plan is that it lets you provide employees with better coverage at, potentially, no additional cost. If your employees have a low claim rate, you can use the extra contributions to provide higher benefits or to underwrite a lower contribution rate.
To be approved, you need to post a security deposit with the EDD to guarantee that the voluntary plan meets all of the requirements.
For information on security deposits, reporting requirements, and disputing claims, read theDisability Insurance Employer’s Guide to Voluntary Plan Procedures (DE 2040).
Now you have a better understanding of CASDI and what goes in—and out—of your employees’ paychecks.
Quick note: This is not to be taken as tax, legal, benefits, financial, or HR advice. Since rules and regulations change over time and can vary by location, consult a lawyer or HR expert for specific guidance.
