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The Mandate Monitor

California SDI and Paid Family Leave: 1.3% of wages in 2026

In effectChecked November 9, 2026Run by California Employment Development Department (EDD)

Short answer

California’s State Disability Insurance (SDI) is paid by employees: employers withhold 1.3% of all wages in 2026 and 1.4% in 2027, with no wage cap since 2024. SDI funds both Disability Insurance and Paid Family Leave (PFL), which pays up to 8 weeks of benefits to bond with a new child, care for a seriously ill family member or help with a family member’s military deployment. Employers register with the California Employment Development Department (EDD), withhold and deposit SDI with their payroll taxes, report wages every quarter and hand out the required notices.

Next date: January 1, 2027: State Disability Insurance (SDI) withholding rate rises to 1.4% of all wages for 2027.

Does your payroll handle California SDI and Paid Family Leave? See the free state route and the 2 payroll systems with help docs that cover it.

What changed recently

  1. · New law

    California widens the military reason for Paid Family Leave

    Assembly Bill 2054 expands California Paid Family Leave’s definition of covered active duty beyond deployment to a foreign country. It adds training, deployment elsewhere and, for reserve members including the National Guard, a call or order to federal or state active duty. It starts on July 1, 2028, or sooner once specified changes are made to the California Employment Development Department (EDD) claims system.

Every change, newest first

On your payroll: California SDI and Paid Family Leave2026
Premium, share of wages
1.3%
Most you may deduct from employees
1.3%
Employer pays at least
0%
2027 premium
1.4%

2027 rate: announced.

California SDI and Paid Family Leave premium calculator

In 2026, California SDI and Paid Family Leave premiums are 1.3% of each employee’s wages. Employers may deduct all of it from pay.

Total premium a year
$650.00
Most you may deduct from employees
$650.00
Employer pays at least
$0.00

Assumes the full employee share is deducted.

California SDI and Paid Family Leave deadlines

  1. · Paid leave

    State Disability Insurance (SDI) withholding rate rises to 1.4% of all wages for 2027

  2. · Paid leave

    Fourth-quarter 2026 DE 9 and DE 9C wage reports are delinquent if not filed by this date

    They cover October through December 2026 wages and the State Disability Insurance withheld.

  3. · Paid leave

    Latest date for the wider Paid Family Leave military definition in Assembly Bill 2054 to start

    It starts sooner once specified changes are made to the California Employment Development Department (EDD) claims system.

Dates already passed (4)
  • : Third-quarter 2026 DE 9 and DE 9C wage reports are delinquent if not filed by this date. They cover July through September wages and the State Disability Insurance withheld.
  • : State Disability Insurance (SDI) withholding rate is 1.3% of all wages for 2026.
  • : Higher benefit rates take effect for new Disability Insurance and Paid Family Leave claims under SB 951. New claims pay up to 70% to 90% of regular weekly wages.
  • : SB 951 removes the taxable wage limit for State Disability Insurance (SDI). All wages are now subject to SDI withholding, with no yearly maximum per employee.

What employers have to do

  1. Register with the California Employment Development Department (EDD) within 15 days of paying more than $100 in wages in a calendar quarter.
  2. Withhold State Disability Insurance (SDI) from every paycheck: 1.3% of all wages in 2026 and 1.4% in 2027. There is no wage cap, so withholding continues all year.
  3. Deposit State Disability Insurance (SDI) together with California personal income tax withholding through e-Services for Business, on the schedule that matches your federal deposit schedule.
  4. File the quarterly contribution return (DE 9) and wage detail report (DE 9C) electronically by each quarter’s delinquent date, such as February 1, 2027 for October through December 2026.
  5. Post the Notice to Employees (DE 1857A), and give the Disability Insurance Provisions brochure (DE 2515) and Paid Family Leave brochure (DE 2511) to new hires and to employees who ask for time off for a covered reason.
  6. Return the notices the state sends when an employee files a claim (DE 2503 for Disability Insurance, DE 2503F for Paid Family Leave) within two working days.

Handling California SDI and Paid Family Leave in payroll

The free route: register directly with the state

You can register and report on your own through California Employment Development Department (EDD). You’ll still need your payroll to figure the premium on each paycheck and withhold any employee share.

Payroll systems with a help document covering California SDI and Paid Family Leave

SystemWhat the documentation saysLink
GustoGusto’s paid family leave article lists California PFL as included in the employee disability (SDI) contribution and says Gusto usually pays state-funded PFL taxes for the employer. Read their help doc, Nov 8, 2026See plans for Gusto
Patriot SoftwareCalifornia tax list says Patriot withholds the employee SDI contribution, which it notes funds Paid Family Leave, and files it on Forms DE 9 and DE 9C for Full Service customers. Read their help doc, Nov 8, 2026See plans for Patriot Software

Listed alphabetically. We may earn a commission from these links; it never decides who’s listed.

How California SDI and Paid Family Leave works

Employees pay all of it. Employers withhold State Disability Insurance (SDI) at 1.3% of every dollar of wages in 2026 and 1.4% in 2027. Since SB 951 took effect on January 1, 2024, there is no taxable wage limit and no maximum withholding per employee. Employers pay nothing toward SDI themselves. It shows on pay stubs as CASDI.

No premium cost to the employer: State Disability Insurance (SDI) is withheld from employees’ wages, and the California Employment Development Department (EDD) says employers do not pay for Disability Insurance or Paid Family Leave benefits. The cost is payroll setup and paperwork. Employers in San Francisco may also have to pay part of an employee’s wages during Paid Family Leave for bonding with a new child under the city’s Paid Parental Leave Ordinance.

Paid Family Leave (PFL) pays up to 8 weeks in a 12-month period to bond with a new child, care for a seriously ill family member, or take part in a qualifying event tied to a family member’s military deployment abroad. A law signed September 28, 2026 (Assembly Bill 2054) widens the military reason to also cover a family member’s training and deployment other than to a foreign country and, for reserve members including the National Guard, a call or order to federal or state active duty. It starts on July 1, 2028, or sooner once specified changes are made to the California Employment Development Department (EDD) claims system. Disability Insurance (DI) pays up to 52 weeks for an employee’s own illness, injury or pregnancy that isn’t work-related. Both pay about 70% to 90% of the wages earned 5 to 18 months before the claim, from $50 up to $1,765 a week for claims starting on or after January 1, 2026. PFL replaces wages but does not by itself protect the employee’s job; job protection comes from other laws such as the federal Family and Medical Leave Act (FMLA) or the California Family Rights Act (CFRA).

Questions employers ask

Who has to follow California SDI and Paid Family Leave?

Any business with employees in California. You must register with the California Employment Development Department (EDD) within 15 days once you pay more than $100 in wages in a calendar quarter, or $750 in cash wages in a quarter for household employees. State Disability Insurance (SDI) is then withheld from every covered employee’s wages.

What happens if an employer doesn’t comply?

Late payroll tax payments, including State Disability Insurance (SDI) withholding, carry a 15% penalty plus interest. Late or unreported employee wages on the DE 9C draw a $20-per-employee wage item penalty, filing the DE 9 on paper instead of electronically brings a $50 penalty, and filing the DE 9C on paper brings a further $20 per employee. Failing to withhold and send payroll taxes, even by mistake, can be charged as a misdemeanor punishable by a fine of up to $1,000, up to one year in jail, or both (California Employment Development Department, California Employer’s Guide, DE 44, 2026).

Can employers use a private plan instead?

Allowed as a Voluntary Plan (VP), a private short-term disability plan that takes the place of State Disability Insurance (SDI). The employer and a majority of employees must agree, and the California Employment Development Department (EDD) must approve the plan before it starts. A VP must provide every SDI benefit plus at least one better benefit, can’t cost employees more than SDI, and must match any later SDI benefit increases. Employees who stay on SDI still have SDI withheld and sent to the EDD.

Everything employers in California must do ·Paid leave in every state

Sources

  1. Contribution Rates, Withholding Schedules, and Meals and Lodging Values (SDI rate 2024 to 2027, wage limit removed), California Employment Development Department (read Nov 7, 2026)
  2. California Employer’s Guide 2026 (DE 44, Rev. 52, 4-26): SDI withholding, deposits, DE 9 and DE 9C due dates, penalties, California Employment Development Department (read Nov 8, 2026)
  3. Payroll Tax Calendar: 2026 payroll tax due dates, California Employment Development Department (read Nov 7, 2026)
  4. Step 1: Register as an Employer, California Employment Development Department (read Nov 7, 2026)
  5. Paid Family Leave (weeks available, $50 to $1,765 weekly benefit), California Employment Development Department (read Nov 7, 2026)
  6. Paid Family Leave Benefit Payment Amounts (70% to 90% of wages), California Employment Development Department (read Nov 7, 2026)
  7. Disability Insurance and Paid Family Leave Weekly Benefit Amounts (DE 2588, Rev. 23, 2-26), claims beginning on or after January 1, 2026, California Employment Development Department (read Nov 7, 2026)
  8. Disability Insurance (up to 52 weeks), California Employment Development Department (read Nov 7, 2026)
  9. Employer Requirements (withholding, posters and brochures, claim notices, San Francisco ordinance), California Employment Development Department (read Nov 7, 2026)
  10. Voluntary Plan, California Employment Development Department (read Nov 7, 2026)
  11. SB 951 Social Media Toolkit (higher benefit rates for claims from January 1, 2025), California Employment Development Department (read Nov 7, 2026)
  12. Assembly Bill 2054, Chapter 729, Statutes of 2026 (Unemployment Insurance Code section 3302.1), California Legislature (read Nov 9, 2026)