California CASDI Tax: Rates, Benefits, and Job Protection Limits

The California CASDI tax is the mandatory payroll deduction labeled “CASDI” or “SDI” on your pay stub, and for 2026 it takes 1.3% of every dollar you earn, with no income ceiling.¹ That money funds two state programs: Disability Insurance, which replaces part of your wages when a non-work illness or injury keeps you off the job, and Paid Family Leave, which does the same when you need time to bond with a new child or care for a seriously ill family member.

What’s Coming Out of Your Paycheck in 2026

The withholding rate is 1.3% for 2026, up from 1.2% in 2025.² Since SB 951 removed the taxable wage ceiling on January 1, 2024, the rate applies to all wages. There is no cap.¹

In practical numbers: a salary of $80,000 contributes $1,040 a year to CASDI. A salary of $200,000 contributes $2,600. Before the ceiling disappeared, high earners stopped contributing once they crossed a set threshold, so removing it hit six-figure salaries hardest.

CASDI is funded entirely by employees. Your employer doesn’t match it the way they match Social Security or Medicare.²

Some employers run an approved Voluntary Plan instead of sending contributions to the EDD. These private plans must provide at least every benefit the state program offers plus one improvement, and they can’t charge you more than the state rate. If your employer uses one, your paycheck deduction looks essentially the same, but the money goes to the private plan.³

What the Deduction Buys You

Your contributions fund two separate programs. Both pay partial wage replacement, but they cover different situations.

Disability Insurance

DI pays benefits when you can’t work because of a non-work-related illness, injury, or pregnancy. The “non-work” piece matters. On-the-job injuries go through workers’ compensation, which is a separate system funded by your employer. DI covers everything else: elective surgery, a difficult pregnancy, a mental health condition, a weekend car accident, a serious illness unrelated to your work.

Benefits last up to 52 weeks.⁴ There is a seven-day unpaid waiting period, so your first payment covers from the eighth day of your disability forward.⁵

Paid Family Leave

PFL pays benefits for up to eight weeks in any 12-month period, with no waiting period.⁶ It covers three situations:

Bonding with a new child after birth, adoption, or foster placement, with claims used within 12 months of the birth or placement date.⁷
Caring for a seriously ill spouse, child, parent, grandparent, grandchild, sibling, or domestic partner.
Handling qualifying events tied to a family member’s overseas military deployment, such as child care arrangements, legal or financial matters, or military ceremonies.⁸

New parents often use the programs back to back. DI pays during the weeks before and after birth when the mother is medically unable to work, and PFL picks up for bonding time afterward.

How Much the Benefits Actually Pay

Your weekly check is based on your earnings in the highest-paid quarter of your base period. For claims starting in 2026:

You get 90% of your weekly wages if your annual income is roughly $65,120 or less.
You get 70% of your weekly wages if you earn more, capped at $1,765 per week.⁹

The minimum weekly benefit is $50, and the same rates and cap apply to both DI and PFL claims.²

The 90% tier is recent. Before 2025, every claimant received between 60% and 70% of wages. The higher replacement for lower incomes reflects the fact that someone earning $45,000 can’t absorb a 30% pay cut the way someone earning $150,000 can.

To estimate: divide your highest-quarter earnings by 13 for an approximate weekly wage, then multiply by 0.9 or 0.7 depending on your income. If the result tops $1,765, your benefit is capped there. DI pays for up to 52 weeks; PFL pays for up to eight.⁴

To draw any benefit at all, you need at least $300 in CASDI-deducted wages during your base period, which is roughly the 12-month window covering the first four of the last five completed calendar quarters before your claim begins.⁹ For anyone working steadily, that’s a low bar.

Who Doesn’t Pay and Who Has to Opt In

Not every California worker pays CASDI. Federal employees, certain religious workers, elected officials, and students working for the school where they’re enrolled are exempt. Family work arrangements are also exempt: a child under 18 working for a parent, a spouse employed by a spouse, or a parent employed by a son or daughter. Independent contractors in licensed professions such as law, medicine, architecture, and accounting are excluded as well.¹⁰ If you fall into one of these groups, no CASDI appears on your paycheck, and you can’t claim DI or PFL benefits from the state program.

Self-employed people aren’t automatically covered either, but they can opt in through the Disability Insurance Elective Coverage (DIEC) program. To qualify, your business must not be seasonal, and you need a net profit of at least $4,600 per year. There’s a trap worth knowing: after enrolling, you must wait at least six months before filing any claim, and you commit to the program for at least two full calendar years. If your profits fall below $4,600 for three consecutive years, the EDD can cancel your coverage.¹¹

CASDI Does Not Protect Your Job

The most important thing to understand about CASDI is what it isn’t. It is money, not job security. The EDD states plainly that disability benefits do not provide job protection.¹²

If you want your position held while you’re out, you generally need to qualify separately under the California Family Rights Act (CFRA) or the federal Family and Medical Leave Act (FMLA). CFRA covers employees who have worked for their employer at least one year, logged at least 1,250 hours in the past 12 months, and work for a company with five or more employees.¹³ FMLA sets a higher employer-size threshold at 50 employees.

Many workers qualify for both CASDI benefits and CFRA protection, and the two run concurrently. But if you work for a small employer or haven’t been there long enough, you can collect every dollar of DI or PFL you’re entitled to and still legally lose your job. Check your CFRA eligibility before you assume otherwise.

Tax Treatment When You Receive Benefits

The two programs are taxed differently, and the gap surprises people in April.

DI benefits are generally not taxable at the federal or state level. The one exception: if you were collecting unemployment and switched to DI after becoming sick or injured, the IRS treats those DI payments as a substitute for unemployment, which makes them federally taxable.¹⁴

PFL benefits are always federally taxable. The IRS treats PFL as a form of unemployment compensation, so you’ll receive a Form 1099-G and must report the income on your federal return. California does not tax DI or PFL benefits at the state level.¹⁴

The EDD doesn’t automatically withhold federal taxes from PFL payments. If you plan to take leave, adjust your withholding elsewhere or set aside cash so the federal bill doesn’t catch you off guard.

1
Employment Development Department. Contribution Rates, Withholding Schedules, and Meals and Lodging Values
2
Employment Development Department. Contribution Rates and Benefit Amounts
3
Employment Development Department. Become a Voluntary Plan Employer
4
Employment Development Department. Am I Eligible for Disability Insurance Benefits
5
Employment Development Department. Disability Insurance Claim Process
6
Employment Development Department. Paid Family Leave
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Employment Development Department. Paid Family Leave Claim Process
8
Employment Development Department. Paid Family Leave for Military Family
9
Employment Development Department. Disability Insurance Benefit Payment Amounts
10
Employment Development Department. Exempt Employment (DE 231EE)
11
Employment Development Department. Disability Insurance Elective Coverage (DIEC)
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Employment Development Department. Disability Insurance Benefits
13
California Civil Rights Department. Family Care and Medical Leave Quick Reference Guide
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Employment Development Department. Form 1099G FAQs