Rate Increased from 1.1% to 1.2%
Wage Base and Maximum Weekly Benefit Unchanged
The California Employment Development Department (EDD) has announced that the 2011 SDI payroll tax on employee wages will be increased from its current 1.1% to 1.2.%, effective January 1. The wages on which the contribution is taken will be unchanged at $93,316. The increase in the contribution rate will mean that SDI participants' cost for SDI coverage will increase by 9.09% over the 2010 cost. The maximum annual cost will increase from $1,026.48 to $1,119.79.
SDI provides disability and Paid Family Leave (PFL) benefits equal to 55% of the employee's base period earnings. The maximum weekly benefit will remain at $987.
Unlike other states that mandate disability benefits, SDI is funded by the employee; there is no employer cost.
In California, employers may elect to opt out of the SDI program and establish a private plan (called a "Voluntary Plan"). Voluntary Plans are attractive in many instances because they can provide equivalent or better benefits than SDI, at the same or lower cost to employees. In addition, Voluntary Plans often provide improved service to employees and plan sponsors.
Prior Year Announcements
2010 Announcement
2009 Announcement
The Larkin Company is an administrator of self-insured disability plans (including self-
insured California SDI) and leave of absence programs for employers. Please contact us for information about our services.