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California State Disability Insurance (CASDI), also known as CA-SDI, is a state-mandated payroll tax that helps fund short-term disability benefits for eligible California workers.
CASDI is funded through a small deduction taken directly from employees’ paychecks. You may see it listed on your check stubs as “CASDI” or “CASDI-E,” which represents the employee contribution toward California State Disability Insurance.
Typically, benefit payments equal a percentage of the employee’s average income, and they can provide payments for a limited period (usually up to 52 weeks), depending on eligibility and disability insurance claim approval.
CASDI is California-specific and is part of the state disability programs. It also differs from federal taxes by requiring employers to withhold a small amount from employees’ earnings and pay the state.
Understanding CASDI is important because it provides a safety net during times when you are unable to work due to health-related issues. In this guide, we will explain what CASDI is, how it works, what it covers, and how it appears on a W-2 form or on your paycheck.
What Is CASDI?
California State Disability Insurance (CASDI) is a state-run program that provides short-term wage replacement benefits based on past earnings to employees who become unable to work due to a non-work-related illness, injury, or pregnancy-related condition.
This program was established in 1946 to protect workers from losing income due to temporary disability. Over time, it has expanded to include additional support such as Paid Family Leave (PFL), which grants employees time off to care for a family member or bond with a new child, with the ability to maintain benefits along the way.
CASDI benefits normally cover a percentage of an employee’s pay; often 70% to 90% of their average earnings, subject to a weekly maximum limit set by the state. Employers who do not comply with CASDI regulations may be subject to penalties, which makes proper payroll management important.
What is CA SDI Tax Used For?
The CA SDI (California State Disability Insurance) tax is a payroll tax that assists eligible workers in California to receive short-term wage replacement benefits under California Labor Laws.
In 2026, eligible employees can receive about 70% to 90% of their wages, up to the state’s maximum weekly benefit limit, with total benefits depending on updated annual limits set by California.
Who Pays For CASDI?
CASDI is paid by only employees—not employers.
Employers must withhold the CASDI tax from employee wages in each pay period and remit it to the state in California. The CASDI cost is completely covered by an employee’s paycheck, but it is the employer who performs the deduction and reporting.
In cases where a business is utilizing payroll software or working with a payroll service, CASDI deductions are oftentimes computed and deducted automatically to help them be in compliance.
In short, CASDI carries the cost to employees through payroll deductions, with employers playing only an administrative role.
Who is Eligible for CASDI?
Citizenship or immigration status does not disqualify one from CASDI. Employees can also be eligible if they are unable to work due to a non-work-related illness, injury, or pregnancy.
State Disability Insurance (SDI) Eligibility
To qualify for SDI benefits, an individual must generally meet the following conditions:
- Unable to do work of any kind, at least for 8 consecutive days
- Lost wages because of the disability
- Earned at least $300 in wages during the base period, with CASDI deductions
- Be employed or actively seeking employment at the time of application
- Be under the care of a licensed physician or accredited religious practitioner up to eight weeks
- Submit the claim between 9 days and 49 days of the disability start date.
- Submit a medical certification from a licensed health professional
Paid Family Leave (PFL) Eligibility
An employee is eligible for PFL benefits when he or she:
- Be unable to work due to a qualifying family reason (bonding with a child, caring for a seriously ill family member, or supporting a military family member deployed overseas ).
- Have been employed or searching for work when the leave starts
- Were unable to perform normal work owing to the paid leave details
- Worked over $300 with SDI deductions in the last 18 months
CASDI benefits are designed to support eligible workers during temporary income loss while they recover or manage family responsibilities.
Note: You can use a pay stub template to review and verify details like CASDI deductions before generating the final paycheck.
How is Disability Calculated?
California disability benefits under CASDI are calculated based on your past earnings during a specific base period. The state reviews your wages and determines an average weekly income.
The state also applies a maximum weekly limit, so even higher earners cannot receive more than the set cap.
How Much is Disability Payment?
This differs for each employee, and the disability payment is based on the person’s income history. Nevertheless, in California, the majority of eligible employees can count on:
- Around 70%–90% of weekly wages
- Limited to around $ 1,681 per week (2025 limit)
- You are paid every week for the duration of the approved period of disability
How CASDI is Different from Paid Family Leave (PFL)?
Both provide wage replacement, but they serve different purposes.
| Feature | State Disability Insurance (SDI) | Paid Family Leave (PFL) |
|---|---|---|
| Purpose | It covers personal disability due to injury, illness, pregnancy, or childbirth recovery | Covers time off to care for new child |
| Reason for Leave | Employee’s own medical condition | Family caregiving, child bonding, or military support |
| Benefit Type | Short-term wage replacement | Short-term wage replacement |
| Duration | Up to 52 weeks (based on eligibility) | Up to 8 weeks in a 12-month period |
| Who It Helps | Employee is unable to work | Employee taking family-related leave |
| Example Use Case | Pregnancy disability, Surgery recovery | Caring for a sick family member, New child bonding |
CASDI may also cover both benefits in different stages—for example, SDI during recovery after childbirth, followed by PFL for bonding with the baby.
Difference between Social Security Disability Insurance and SDI
California State Disability Insurance (SDI) and Social Security Disability Insurance (SSDI) are different programs, although both provide income support when a person cannot work.
- SSDI (Social Security Disability Insurance) is a federal program that assists individuals with a long-term disability. It is applicable where there may be a medical condition that will last for 12 months or more, and restricts the ability to work substantially.
- SDI (California State Disability Insurance ) is a state program for short-term disability. It is a benefit that compensates an employee for loss of wages when he or she misses work due to a non-work-related illness, injury, pregnancy, or other malady. This is available in expectation of recovery.
What is CASDI on my paycheck?
CASDI on your paycheck or paystub stands for California State Disability Insurance. It is a small mandatory payroll deduction taken from your wages to fund short-term disability and paid family leave benefits in California. You’ll usually see it listed as “CASDI” or “CASDI-E” under the deductions section of your pay stub.
If you are reviewing a paystub template, CASDI will typically appear in the deductions section so employees can clearly understand state-mandated contributions.
What Is CASDI On W2?
CASDI on W-2 stands for California State Disability Insurance, and it represents how much of the tax was withheld from your pay in a year in total on your W-2.
It is shown in Box 14 (Other deductions) for information.
This lets you know how much you paid into the SDI program in case you use this information when filing your state taxes, but CASDI itself is not a federal income tax deduction.
CASDI Benefits Rates 2026
California State Disability Insurance rates are updated on January 1 each year. Updates that impact employee contributions as well as maximum benefit payouts.
| Category | 2026 Rate / Amount |
|---|---|
| Assessment Rate | 0.168% (administrative rate) |
| Employee Contribution Rate | 1.2% of wages |
| Maximum Weekly Benefit | $1,700+ per week (estimated) |
| Maximum Total Benefit | $88,000+ annually (estimated) |
Final Thoughts
CASDI provides income protection support to California workers when they take qualified leaves from work due to pregnancy, disability or injury, or family caregiving duties.
This applies to both employees and employers, as knowing how CASDI works will keep these individuals informed and help them stay compliant with payroll/tax records. Additionally, it simplifies planning finances and knowing what benefits might be there when a person encounters qualifying life events.
You can simplify this process by using a reliable pay stub generator. It automatically calculates state-specific taxes like SDI, FLI, PFML, SUI, etc. It ensures accurate deductions on every paycheck. Ultimately, it also helps businesses maintain clear, compliant payroll records while reducing manual errors in tax calculations.
FAQs
1. How long can you be on disability in California?
In California, SDI benefits can last for up to 52 weeks, depending on your medical condition and eligibility.
2. How much does disability pay in California?
Disability pay is usually 70%–90% of your weekly wages, up to the state’s maximum weekly benefit amount limit.
3. How often do you get paid on disability in California?
Disability benefits are typically paid on a weekly basis once your claim is approved. Payments are issued directly to your bank account or debit card.
4. What is SDI tax?
SDI tax (State Disability Insurance) is a payroll deduction taken from employees’ wages in California to fund short-term disability.
5. Are independent contractors eligible for California SDI tax?
No, independent contractors are generally not covered under CASDI because they do not pay into the SDI program.
Also Check:
1099 vs W4 Form: Differences, Uses, and Tax Impact Guide
What Is Form 8995? Everything You Need to Know in 2026
I-9 Vs W4 Form: What They Are and How They Differ?
FAQ's
How does California State Disability Insurance work?
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CASDI is funded through payroll deductions from employees’ wages. When an eligible worker cannot work due to a condition, they can apply for partial wage replacement benefits.
Is California SDI tax refundable?
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No, SDI tax is not refundable. It is a mandatory payroll contribution that funds disability in California.
Is CASDI the same as SDI?
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Yes, CASDI and SDI refer to the same program. SDI is the official name, while CASDI is commonly used on paychecks.
What is short-term disability insurance used for?
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It is used to replace a portion of income when an employee cannot work due to illness, injury, pregnancy, or other medical condition.
Is CASDI mandatory in California?
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Yes, CASDI is mandatory for most employees in California.
Is CASDI tax-deductible?
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CASDI contributions are generally not deductible from federal taxes.
What does the California Employment Development Department do?
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The EDD administers California’s SDI and PFL programs, processes claims, and manages unemployment.
