The SDI tax on your paycheck is a state disability insurance contribution. It funds a state program that replaces part of your wages if you can't work because of an illness, injury or other disability that isn't job-related. Only a few states require it: California, New York, New Jersey, Hawaii and Rhode Island.
If you work in one of those states, the deduction is mandatory and comes out of every paycheck. It's usually small. In New York, for example, it tops out at $0.60 a week. Here is how SDI works, which states withhold it, and how to account for it when estimating your take-home pay.
What SDI is and what it pays for
State disability insurance is a form of short-term disability coverage run by the state. Workers pay in through payroll, and if you become unable to work for a covered reason, you can file a claim for partial wage replacement for a limited period.
A few points that often cause confusion:
- SDI isn't workers' compensation. Workers' comp covers job-related injuries and is paid for by employers. SDI covers disabilities that happen outside of work.
- SDI isn't Social Security Disability. Social Security disability benefits are federal and funded through the Social Security tax you already pay. SDI is a separate state program.
- SDI isn't optional. In states that require it, covered employees pay it the same way they pay state income tax.
Some states bundle paid family leave into the same program or show it on the same line, so the deduction may cover more than disability alone. Benefit amounts, waiting periods and claim rules are set by each state, so check your state's disability insurance agency for details.
Which states withhold SDI tax
Five states withhold an employee disability insurance contribution in 2026:
| State | Program name | 2026 employee amount |
|---|---|---|
| California | State Disability Insurance (SDI) | 1.3% of all wages (no wage cap) |
| New York | Disability benefits (SDI) | 0.5% of wages, maximum $0.60 a week |
| New Jersey | Disability insurance (with unemployment and family leave insurance) | 0.19% of wages up to $171,100 |
| Hawaii | Temporary Disability Insurance (TDI) | Up to 0.5% of weekly wages, maximum $7.50 a week |
| Rhode Island | Temporary Disability Insurance (TDI) and Temporary Caregiver Insurance (TCI) | 1.1% of wages up to $100,000 |
The 2026 figures come from each state's labor or employment department, and the PaycheckHubs calculator includes all five. Hawaii employers may choose to pay more of the cost themselves, so your actual deduction can be lower.
How New York's SDI cap works
New York's employee contribution is 0.5% of wages, but no more than $0.60 per week. Because 0.5% of $120 is $0.60, anyone earning more than $120 a week hits the cap. In practice, almost every full-time New York worker pays the same $0.60 a week, or $31.20 a year, no matter how much they earn.
How it appears per paycheck depends on your pay schedule. Weekly paychecks show $0.60, biweekly paychecks show $1.20, and semimonthly or monthly amounts reflect the weeks in each period.
Worked examples
New York hourly worker: $26 an hour, 40 hours, paid weekly
| Per weekly paycheck | Amount |
|---|---|
| Gross pay | $1,040.00 |
| Federal income tax | $82.88 |
| Social Security | $64.48 |
| Medicare | $15.08 |
| New York income tax | $44.68 |
| New York SDI | $0.60 |
| Net pay | $832.28 |
Without the cap, 0.5% of $1,040 would be $5.20. The cap keeps it at $0.60. This is a single filer with no pre-tax deductions; New York Paid Family Leave isn't included, so actual take-home pay will be slightly lower.
New York salaried worker: $150,000, head of household, biweekly
At $150,000 a year paid biweekly, gross pay is $5,769.23 per paycheck. The SDI deduction is $1.20 per paycheck, $31.20 for the year, exactly the same annual amount as the hourly worker above. Net pay comes to an estimated $4,218.97 per paycheck before Paid Family Leave.
California: the same $26 hourly job
For the same $26-an-hour weekly job in California, our calculator estimates federal tax, FICA, $24.89 in California income tax and $13.52 in SDI (1.3% of $1,040), for net pay of $839.15.
You can run these yourself in the New York paycheck calculator and the California paycheck calculator, or start from the main paycheck calculator.
Finding SDI on your pay stub
SDI usually appears in the tax section of your pay stub, near state income tax, sometimes abbreviated with the state's initials. Hawaii and Rhode Island may label it TDI, and Rhode Island may show TCI too. In New Jersey, disability, family leave and unemployment contributions may appear as separate lines or be grouped.
If you don't see it and you work in one of these five states, ask your payroll department. Some employers provide coverage through a private plan approved by the state instead of the state fund, and some cover the cost themselves. Our guide on how to read your pay stub explains the other lines you'll see.
SDI vs. other disability deductions
SDI is different from a voluntary short-term or long-term disability policy you buy through your employer. Those are elective benefits with their own premiums and tax treatment, covered in our guide to life and disability insurance deductions. You can have both: SDI because the state requires it, and a workplace policy on top for additional coverage.
Paid family leave is related but separate in most states. It replaces wages while you care for a family member or bond with a new child. See paid family leave payroll deductions by state for that side of things.
Frequently Asked Questions
Which states have SDI tax?
California, New York, New Jersey, Hawaii and Rhode Island require employee contributions to a state disability program. Hawaii and Rhode Island call it temporary disability insurance (TDI).
How much is New York SDI in 2026?
0.5% of wages, capped at $0.60 a week. That works out to $31.20 a year for anyone who earns more than $120 every week.
Can I opt out of SDI?
Generally no. If you're a covered employee in a state that requires it, the contribution is mandatory, although some employers use an approved private plan instead of the state fund.
Does SDI count as state income tax?
No. It's a separate payroll contribution for a specific insurance program, even though it usually appears next to state tax on your pay stub.
Sources
- Tax Foundation: State Individual Income Tax Rates and Brackets, 2026
- IRS Publication 15, Employer's Tax Guide
- Consumer Financial Protection Bureau
Run the numbers for your state
Written and checked against IRS, Social Security Administration and state tax agency publications for the 2026 tax year. General information, not tax, legal or financial advice. Read our editorial policy, calculation methodology and sources.