SDI stands for “State Disability Insurance” and it’s a payroll tax that is required in some, but not all states. The tax is paid by employees, not employers, and the money supports employees financially if they are disabled while working at their current job.

SDI should not be confused with workers compensation insurance, which is paid by employers.

Which states currently require SDI contributions?

The states that currently require SDI contributions are:

  • California
  • Hawaii
  • New Jersey
  • New York, and
  • Rhode Island.

How much is SDI?

The SDI tax rates differs per state. It’s best to check what the specific SDI tax rate is in your state.

It can be tough to keep track of all the tax requirements in your city, county, state, and more. It’s best to use a CPA or payroll provider like Gusto to help ensure your payroll is compliant.

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