California SDI rises to 1.3%, still with no wage cap
The State Disability Insurance rate increases from 1.2% to 1.3% of all wages. There has been no taxable wage ceiling since SB 951 removed it in 2024, so every dollar earned is charged.
California’s State Disability Insurance contribution rate rose to 1.3% with effect from January 1, 2026, up from 1.2% in 2025. SDI funds both disability benefits and Paid Family Leave, and is withheld from every California payslip.
The rate matters more than it used to because there is no taxable wage ceiling. Senate Bill 951 removed it from January 1, 2024, so unlike Social Security — which stops at a wage base — SDI applies to every dollar earned, without limit.
On a $75,000 salary that is $975 for the year. On $200,000 it is $2,600, and on $500,000 it is $6,500 — more than the entire state income tax bill in several other states.
This is the single most common omission in California take-home calculators. Some leave SDI out altogether; others still apply a wage cap that has not existed since 2023. Either way the result overstates California take-home pay.
Separately, the Franchise Tax Board’s 2026 figures index the standard deduction to $5,706 single and $11,412 joint, up 3.0% from $5,540 and $11,080, with every bracket threshold moving by the same 3.0%.