SDI and Paid Family Leave Payroll Deductions (2026)
Every 2026 state SDI, TDI, and paid family leave payroll deduction rate and wage cap, plus how the IRS says to tax them. All 14 jurisdictions covered.
This article is for general information, not tax or legal advice. Every state rate and wage base below resets on January 1 and several changed for 2026. Verify current figures with the state agency and the IRS, or talk to a payroll professional, before you run payroll.
CASDI. NYPFL. NJ FLI. WA PFML. CO FAMLI. MN Paid Leave. Six codes for roughly the same idea, and one of them may have just shown up on your pay stub.
Fourteen jurisdictions run a state disability insurance or paid family leave program, and most of them fund it partly or entirely with a payroll deduction taken from the employee. That deduction is not FICA, not federal unemployment tax, and not your state income tax withholding. It is a separate line with its own rate and its own annual cap.
It also comes out after federal income tax rather than before. Enough payroll write-ups get that backwards that it gets its own section below.
What SDI and paid family leave deductions actually are
These programs pay you a percentage of your normal wages when you are out of work for a reason that unemployment insurance does not cover.
SDI or TDI (State Disability Insurance / Temporary Disability Insurance) replaces wages when you cannot work because of your own non-work-related illness, injury, surgery, or pregnancy. Work-related injuries go through workers’ compensation instead.
PFL, PFML, or FLI (Paid Family Leave / Paid Family and Medical Leave / Family Leave Insurance) replaces wages when you take time off to bond with a new child or to care for a seriously ill family member. Some programs also cover military exigency leave.
Some states run both under one deduction. California’s single 1.3% CASDI line funds disability and Paid Family Leave together, and there is no separate PFL withholding. Rhode Island’s 1.1% covers both TDI and Temporary Caregiver Insurance.
Other states split them. New Jersey withholds TDI at 0.19% and FLI at 0.23% as two separate lines. Massachusetts splits its PFML contribution into a medical piece (0.28%) and a family piece (0.18%).
Three things it is not. FICA is separate: the flat 6.2% Social Security plus 1.45% Medicare comes out federally, so a California employee pays SDI on top of it. SUTA and FUTA are employer-paid unemployment taxes and never touch the employee side. And the federal FMLA guarantees job-protected leave, but the leave is unpaid, so it generates no deduction at all.
Employers are not always off the hook either. Colorado, Massachusetts, Maine, Minnesota, Oregon, Washington, Delaware, and New Jersey (for TDI) all require an employer share on top of the employee deduction.
2026 SDI and paid family leave deduction rates by state
Every jurisdiction that touches an employee paycheck for disability or paid leave in 2026:
| State | Program | 2026 employee rate | Wage base | Max annual employee cost | Employer share |
|---|---|---|---|---|---|
| California | SDI (funds DI + PFL) | 1.3% | None, all wages | No maximum | None |
| Colorado | FAMLI | 0.44% | $184,500 | $811.80 | 0.44% (10+ employees) |
| Connecticut | CT Paid Leave | 0.5% | $184,500 | $922.50 | None |
| Delaware | Paid Leave | up to 0.4% (0.16% at 10–24 employees) | $184,500 | ~$738 | 0.4% (25+ employees) |
| Hawaii | TDI | up to 0.5% of weekly wages | $1,500.21/week | $7.50/week | Balance of cost |
| Maine | PFML | up to 0.5% | $184,500 | $922.50 | 0.5% (15+ employees) |
| Massachusetts | PFML | 0.46% (0.28% medical + 0.18% family) | $184,500 | $848.70 | 0.42% medical (25+ employees) |
| Minnesota | Paid Leave | up to 0.44% | $185,000 | $814.00 | 0.44% (0.22% at 30 or fewer employees) |
| New Jersey | TDI + FLI | 0.19% + 0.23% | $171,100 | $325.09 + $393.53 | TDI experience-rated; none for FLI |
| New York | DBL + PFL | DBL 0.5% (max $0.60/week); PFL 0.432% | PFL $95,347.22 | DBL $31.20; PFL $411.91 | Balance of DBL cost |
| Oregon | Paid Leave | 0.6% | $184,500 | $1,107.00 | 0.4% (25+ employees) |
| Rhode Island | TDI + TCI | 1.1% | $100,000 | $1,100.00 | None |
| Washington | PFML | ~0.807% (71.43% of 1.13%) | $184,500 | ~$1,489 | 28.57% of 1.13% (50+ employees) |
| Washington | WA Cares (long-term care) | 0.58% | None | No maximum | None |
| District of Columbia | PFL | None | n/a | n/a | 0.75%, fully employer-funded |
| Maryland | FAMLI | None until 1/1/2027 | $184,500 | n/a | Rate set by 5/1/2026 |
Most of those $184,500 wage bases are not a coincidence. They peg to the 2026 Social Security wage base set by the SSA cost-of-living announcement, which is the same ceiling that stops your Social Security tax mid-year. Minnesota rounds it to $185,000.
What changed on January 1, 2026
Four things, and stale tables get at least two of them wrong.
California went from 1.2% to 1.3%. With no wage cap, that increase applies to every dollar. A $250,000 earner in California pays $3,250 in SDI for the year, which is more than the entire annual cost of every other state program on this list.
Minnesota Paid Leave went live. Premiums started accruing January 1, 2026 at 0.88% total, split evenly between employer and employee unless the employer covers the whole thing.
Delaware Paid Leave started paying out. The state began accepting claims on January 1, 2026, but the payroll deductions funding those claims started a year earlier, on January 1, 2025. Contributions run up to 0.8% of covered wages in total, and an employer may charge employees no more than half of it.
Maine’s benefits start May 1, 2026, though contributions have been coming out of paychecks since January 1, 2025.
Two more worth flagging. Maryland’s FAMLI program slipped again and now starts contributions on January 1, 2027, so any 2026 table listing a Maryland employee rate is wrong. And the District of Columbia’s paid family leave program is funded entirely by a 0.75% employer tax, so DC employees see nothing on their stub.
Are SDI and paid family leave deductions pre-tax? No.
This is the single most common error in content about these deductions, and it changes what your W-2 says.
The employee’s required contribution to a state disability or paid family leave program is included in wages. It does not reduce your federal taxable income. A traditional 401(k) deferral reduces federal income tax withholding, and a Section 125 health premium reduces both income tax and FICA wages. An SDI deduction reduces neither.
Rev. Rul. 2025-4, effective for payments made on or after January 1, 2025, holds that mandatory employee contributions withheld and remitted to the state are included in the employee’s gross income and in wages for federal employment tax purposes, and the employer must report them on the employee’s Form W-2. New York’s paid family leave agency says the same thing in plainer English: PFL contributions are deducted from employees’ after-tax wages.
So on your pay stub, the deduction sits below the tax lines, not above them. If you are working out where each item lands in the stack, our guide to gross pay versus net pay walks through the order.
You can still deduct it, but only if you itemize. Rev. Rul. 2025-4 treats the employee contribution as a state income tax the employee may deduct on Schedule A, subject to the SALT limitation. For the roughly nine in ten filers taking the standard deduction, that is worth nothing.
Employers, watch the pick-up rule. If you voluntarily pay the employee’s share of the contribution instead of withholding it, that payment is now taxable wages to the employee and must be reported on their Form W-2. IRS Notice 2026-06, released in December 2025, extended transition relief for state-paid medical leave benefits attributable to employer contributions through 2026, but pointedly did not extend relief for pick-up contributions.
Contribution taxability is not benefit taxability
These are two separate questions and they get conflated constantly.
Family leave benefits you receive are includible in gross income, but they are not FICA wages. Medical leave benefits attributable to your own contributions are excluded under section 104(a)(3). The portion attributable to employer contributions is includible under section 105 and generally treated like third-party sick pay, which is the piece Notice 2026-06 gave relief on through 2026.
On the W-2: these contributions go in Box 14, labeled as state disability insurance taxes withheld. Where a state runs separate disability and family leave programs, list them as separate items. The 2026 form splits Box 14 into 14a and 14b: everything previously reported in Box 14 (Other) now goes in Box 14a, and Box 14b was created for Treasury tipped occupation codes, so these deductions belong in Box 14a.
Running SDI and PFL across a multi-state payroll
One state is a lookup. Three states is a different job.
The deduction follows the work state, not the company’s home state. A Delaware-registered company with a remote employee in Oregon withholds Oregon Paid Leave, not Delaware Paid Leave. This is the mistake that generates the most amended returns.
Wage bases truncate mid-year, per employee. Once a worker’s year-to-date taxable wages hit the base, the deduction stops. Hire someone in August and their prior earnings elsewhere do not count toward your wage base for them, so the cap is measured against wages you paid. Get the year-to-date number wrong and you over-withhold, then owe a correction.
Five wage bases break the $184,500 pattern. California has no cap at all. Rhode Island stops at $100,000. Minnesota uses $185,000. New York PFL caps at $95,347.22, which is derived from the state average weekly wage rather than any federal figure. Hawaii caps weekly instead of annually.
Headcount thresholds usually change the split, not the employee rate. Washington at 50 employees, Massachusetts at 25, Oregon at 25, Maine at 15, Colorado at 10. Below those thresholds the employer share shrinks or disappears while the employee keeps paying the same percentage, so a nine-person Colorado shop and an eleven-person Colorado shop withhold identically and owe differently. Delaware breaks the pattern: employers with 10 to 24 covered employees owe parental leave only and can deduct at most 0.16%, and employers with nine or fewer sit outside the mandate entirely.
This is exactly the arithmetic that spreadsheets lose track of. WorkLogs44 carries an independent state for every employee in a payroll run and itemizes these as named state special taxes (CA SDI, NY PFL, and so on) inside the per-employee breakdown. Year-to-date earnings fields mean the wage-base truncation lands on the right paycheck. To see the whole employer side at once, the multi-employee payroll calculator and the employer cost calculator cover the matching pieces.
Common mistakes and edge cases
Treating the deduction as pre-tax. Covered above, but it belongs at the top of this list because it flows straight through to the W-2 and to the employee’s Schedule A.
Applying last year’s rate in January. Every one of these programs resets on January 1. California’s move from 1.2% to 1.3% is the obvious one for 2026, but Oregon, Washington, and New York adjust too.
Assuming SUTA and SDI share a wage base. They do not, and the gap can be enormous. California’s UI wage base is $7,000 while its SDI base is unlimited. Two deductions, same state, same employee, wildly different ceilings.
Including tips where the state excludes them. Washington assesses PFML premiums on gross wages not including tips. Run the premium on a tipped employee’s full gross and you over-collect every pay period.
Blowing past the annual maximum. New York PFL stops at $411.91 for 2026. New Jersey FLI stops at $393.53. If your system keeps withholding past those numbers, you owe the employee a refund.
Forgetting private and voluntary plan substitutes. California voluntary plans, New Jersey private plans, and approved private plans in Massachusetts, Connecticut, and Washington all replace the state deduction with a plan-specific one. California also allows a religious exemption on Form DE 5067.
Mixing up the employee and employer shares. In Oregon the total is 1.0% and the employee pays 60% of it, not 1.0%. In Washington the employee pays 71.43% of the 1.13% total. Charging the full program rate to the employee is a wage violation, not a rounding error.
For a broader sweep of what goes wrong on small-business payroll, we collected the most common payroll mistakes separately. The salary after tax by state calculator runs the full picture if you want these deductions stacked against income tax in your state.
Frequently Asked Questions
What is the SDI deduction on my paycheck?
SDI stands for State Disability Insurance, a mandatory state payroll deduction that funds short-term wage replacement when you cannot work because of your own illness, injury, or pregnancy. In California it appears on pay stubs as CASDI, and the same deduction funds Paid Family Leave.
Is SDI the same as paid family leave?
It depends on the state. In California and Rhode Island, one deduction funds both disability and family leave benefits. In New Jersey, New York, and Massachusetts they are separate programs with separate rates, and they show up as two distinct lines on the pay stub.
Are SDI and paid family leave deductions pre-tax or post-tax?
Post-tax. They do not reduce your federal taxable wages the way a 401(k) or a Section 125 health premium does. Rev. Rul. 2025-4 holds that the required employee contribution is included in wages, and New York states outright that PFL contributions come out of after-tax wages. You may deduct the amount as state income tax on Schedule A if you itemize, subject to the SALT cap.
How much is the California SDI deduction in 2026?
1.3% of all wages, up from 1.2% in 2025. California has no wage cap on SDI, so the deduction applies to every dollar you earn for the whole year. That single line funds both State Disability Insurance and Paid Family Leave.
Which states deduct paid family leave from employee paychecks in 2026?
California, Colorado, Connecticut, Delaware, Hawaii, Maine, Massachusetts, Minnesota, New Jersey, New York, Oregon, Rhode Island, and Washington. The District of Columbia runs a paid family leave program that is fully employer-funded, so employees there see no deduction. Maryland's employee contributions do not begin until 2027.
Can I opt out of SDI or paid family leave deductions?
Generally no. A few narrow exceptions exist. Your employer may substitute an approved voluntary or private plan in states like California, New Jersey, Massachusetts, Connecticut, and Washington, and California allows a religious exemption filed on Form DE 5067. Opting out is an employer-level or exemption-level decision, not a box you check.
Where do SDI and PFL contributions go on my W-2?
Box 14, labeled as state disability insurance taxes withheld. Where a state runs separate disability and family leave programs, they must be listed as separate items. On the 2026 Form W-2, Box 14 splits into 14a and 14b: everything that used to sit in Box 14 goes in Box 14a, and the new Box 14b is reserved for Treasury tipped occupation codes.
Do I stop paying once I hit the annual maximum?
In most states, yes. New York PFL stops at $411.91 for 2026 and New Jersey FLI stops at $393.53. Once your year-to-date taxable wages reach the state's wage base, the deduction ends for the rest of the year. California is the exception, because there is no wage cap at all.