What is CASDI (CA SDI) On My Paycheck
California SDI (State Disability Insurance), also known as CASDI, is a program that provides short-term wage replacement benefits to eligible workers. It helps employees who cannot work because of a non-work-related illness, injury, or pregnancy. The program is funded through a payroll tax that workers pay.
If you see a deduction labeled CASDI or CA SDI on your paycheck, and ask yourself “What is CASDI tax meaning”, it refers to California State Disability Insurance. This means a portion of your earnings is going toward this insurance. Many employees in California contribute to this program, and they may qualify for benefits if they meet certain requirements. CASDI isn’t the same as workers’ compensation, which provides coverage for work-related injuries and medical conditions.
How is CASDI Funded?
CASDI is funded by employee payroll deductions. Employers do not pay into this program. Instead, workers contribute a small percentage of their minimum wages, which is automatically deducted from their paychecks.
Since the program is required under California salary laws, employees cannot refuse to pay unless they qualify for an exemption. The state collects this money and uses it to fund disability and paid family leave benefits.
What is the CASDI Tax Rate?
The California SDI tax rate changes each year. It is set by the Employment Development Department (EDD) of California. The rate is applied to an employee’s wages up to a certain limit.
As of 2025, the California State Disability Insurance (CASDI) tax rate is 1.2%. This rate applies to all of an employee’s wages, as there is no longer a wage cap for CASDI contributions. This change means that employees will continue to have CASDI deductions from their paychecks regardless of their total earnings for the year.
For example, if you earn $50,000 in 2025, your CASDI deduction would be $600 (calculated as $50,000 multiplied by 1.2%). If you earn $200,000, your CASDI deduction would be $2,400. These deductions fund the Ca disability employee tax program, which provides benefits to workers who are unable to work because of illnesses, injuries, or pregnancies.
It’s important to note that the California SDI tax rate and regulations can change annually. For the most current information, always refer to the California Employment Development Department’s official resources.
If you see CASDI E tax or CASDI-E tax meaning on your paycheck, it refers to the employee contribution to the program.
Who is Eligible for CASDI?
To qualify for CASDI benefits, you must:
- Be unable to work due to a non-job-related illness, injury, or pregnancy.
- Have earned enough wages in the past to qualify.
- Have California SDI taxes deducted from your paycheck.
- Have a doctor verify your disability.
If approved, CASDI pays up to 60-70% of your regular wages for a certain period. The amount and duration depend on your earnings and medical condition.
Employee benefits administration plays an important role by making sure that workers are aware of and can access CASDI benefits, alongside other workplace benefits like health insurance and retirement plans.
CASDI also includes Paid Family Leave (PFL).
Paid Family Leave (PFL) provides benefits to people who need to take time off work to:
- Care for a seriously ill child, parent, parent-in-law, grandparent, grandchild, sibling, spouse, or registered domestic partner.
- Bond with a new child entering the family through birth, adoption, or foster care placement.
- Participate in a qualifying event resulting from an eligible family member’s military deployment to a foreign country.
Is CASDI Mandatory?
Yes, CASDI is mandatory for most employees in California. If you work for a private employer and get a regular paycheck, you likely have CASDI automatically deducted.
Some people wonder, “Is CASDI the same as SDI?” The answer is yes. CASDI stands for California State Disability Insurance (CA SDI – CASDI), and they are the same program.
Are Independent Contractors Eligible for CASDI?
Independent contractors are not eligible for CASDI, because they do not have CASDI taxes deducted from their earnings. Since CASDI is funded through employee payroll deductions, only W-2 employees typically contribute to and receive benefits from the program.
However, self-employed workers and independent contractors can choose to opt in by enrolling in California’s Disability Insurance Elective Coverage (DIEC) program. This allows them to pay into the system and qualify for State Disability Insurance (SDI) and Paid Family Leave (PFL) benefits if they ever need them.
Is California SDI Tax Refundable?
Unfortunately, CASDI is not refundable, even if you did not file a claim for disability benefits during the year. However, you can deduct your CASDI contributions from your total tax liability, which may increase your overall tax refund—but this is not a direct refund of your unused contributions.
That said, a refund may be possible if you overpaid due to automatic paycheck deductions exceeding the maximum contribution limit. If your total contributions stay at or below this limit, you will not be eligible for a refund.
Are There Exemptions from CASDI?
While most workers must pay CASDI taxes, some exemptions exist:
- Certain Government Workers – Many public employees do not pay into CASDI.
- Some Nonprofit Employees – Workers at specific nonprofit organizations may be exempt.
- Self-Employed Individuals – Unless they choose to opt into the program, self-employed workers do not pay CASDI taxes.
- Religious Organizations – Some groups can request an exemption.
If you are exempt, California SDI taxes will not be deducted from your paycheck. However, this also means you cannot receive CASDI benefits.
Many people assume that OASDI (Old-Age, Survivors, and Disability Insurance) and CASDI (California State Disability Insurance) taxes are the same, but they are actually different. OASDI is a federal tax that funds Social Security benefits for retirees, disabled individuals, and survivors of deceased workers. CASDI, on the other hand, is a state-level tax in California that provides short-term disability and paid family leave benefits. While both taxes support disability-related programs, they serve distinct purposes and are managed at different government levels.
What are Employer Responsibilities for CASDI?
Employers in California have specific responsibilities when it comes to CASDI taxes. While employers do not pay into CASDI themselves, they must have deductions from employee wages and compliance with California employment laws.
Here’s what employers must do:
- Deduct CASDI Taxes from Employee Paychecks
Employers must withhold the correct CASDI tax rate from each employee’s wages. As of 2025, the rate is 1.2%, and there is no wage cap, meaning all taxable wages are subject to CASDI deductions.
- Report and Submit CASDI Taxes to the EDD
Employers must send the deducted CASDI taxes to the California Employment Development Department (EDD) as part of their payroll tax filings. This guarantees that employees can access State Disability Insurance (SDI) benefits when needed.
- Provide Accurate Pay Stub Information
Employers must include CASDI deductions on employee pay stubs. Labels such as CASDI deduction, CA disability employee tax, or CA SDI CASDI should appear clearly so employees know where their money is going.
- Educate Employees About CASDI
While not required by law, employers should inform employees about what CASDI is, how it works, and how they can apply for benefits through the EDD if they become eligible.
- Maintain Payroll Records
Employers must keep records of CASDI deductions and tax filings for at least four years. These records save compliance in case of audits or employee questions about their deductions.
CASDI is a state-run insurance program that helps California workers if they cannot work due to a disability or family leave needs. It is funded through a payroll tax that most employees must pay. The CASDI tax rate changes each year, and only certain workers are exempt.
If you see CASDI or CA SDI on your paycheck, it means you are contributing to this program. While it is a required tax for many, it provides valuable benefits when needed.
