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Employment Development Department
Employment Development Department

Determine Taxable Wages and Calculate Taxes Due for Unemployment Insurance, Employment Training Tax, and State Disability Insurance

How to:

Determine Taxable Wages

Unemployment Insurance (UI) tax and Employment Training Tax (ETT) are calculated up to the UI taxable wage limit of each employee’s wages per year and are paid by the employer. The State Disability Insurance (SDI) tax is calculated up to the SDI taxable wage limit of each employee’s wages and is withheld from the employee’s wages. Calculated amounts are for computing the contribution amounts to be paid or withheld for reporting to the EDD.

Rate limits used are for demonstration purposes only, current taxable wage limits are available on the Rates and Withholding page.

Taxable Wage

Limits Used: UI – $7,000, SDI – $100,880

First Quarter Second Quarter Third Quarter Fourth Quarter
Employee A B A B A B A B
Paid Wages $10,000 $6,000 $35,000 $500 $35,000 $8,000 $37,000 $15,000
Taxable Wages for UI/ET $7,0001 $6,000 $0.001 $500 $0.00 $5002 $0.00 $0.00
Taxable Wages for SDI $10,000 $6,000 $35,000 $500 $35,000 $8,000 $20,8803 $15,000

1Employee A has reached the UI taxable wage limit of $7,000 for the year. The employer will no longer pay UI taxes on this individual for the remainder of the year; however, they will continue to pay taxes for other employees until they individually reach the $7,000 limit for the year.

2Only a portion of Employee B’s third quarter wages are used to determine the UI taxable wages; prior wages reported plus the $500 mean Employee B has reached the UI taxable wage $7,000 limit for the year.

3Only a portion of Employee A’s fourth quarter wages are used to determine the SDI taxable wages; prior wages reported plus $20,880 mean that Employee A has reached the SDI taxable wage limit of $100,880 for the year.

For additional assistance, contact the Taxpayer Assistance Center at 1-888-745-3886.

Calculate Unemployment Insurance and Employment Training Tax

UI tax and ETT are calculated based on the taxable wages up to the UI taxable wage limit of each employee’s wages per year and are paid by the employer.

Rates used are for demonstration purposes only, employer’s individual rates may vary. Employers may access their current rates through e-Services for Business, select "View your Payroll Tax Rates" under "More Online Services." Refer to How to Determine Taxable Wages for additional information on determining the taxable wages to be used in the calculation.

Unemployment Insurance Tax

Rates Used: 3.4% (.034)

First Quarter Second Quarter Third Quarter Fourth Quarter
Taxable wages for UI1 $13,000 $500 $500 $0.00
Rate 3.4% 3.4% 3.4% 3.4%
Total UI tax to be reported.2 $442.00 $17.00 $17.00 $0.00

Employment Training Tax

Rates Used: 0.1% (.001)

First Quarter Second Quarter Third Quarter Fourth Quarter
Taxable wages for UI1 $13,000 $500 $500 $0.00
Rate 0.1% 0.1% 0.1% 0.1%
Total ETT tax to be reported2 $13.00 $0.50 $0.50 $0.00

1Refer to How to Determine Taxable Wages, for an illustration of UI/ETT taxable wages for each employee for each quarter.

2This amount would be reported on the appropriate reporting form. Refer to Reporting Requirements for additional information about reporting forms.

Calculate State Disability Insurance Tax

The SDI tax is calculated up to the SDI taxable wage limit of each employee’s wages and is withheld from the employee’s wages. Calculated amounts are for computing the contribution amounts to be paid or withheld for reporting to the EDD.

Rates used are for demonstration purposes only, SDI rates are set by law each year. Current SDI rates are available online at Rates and Withholding. Refer to How to Determine Taxable Wages for additional information on determining the taxable wages to be used in the calculation.

State Disability Insurance Tax

Rates Used: 1.0% (.010)

  First Quarter Second Quarter Third Quarter Fourth Quarter
Taxable wages for SDI.1 $16,000 $35,000 $43,000 $35,880
Rate 1.0% 1.0% 1.0% 1.0%
Total SDI tax to be reported.2 $160.00 $355.00 $430.00 $358.00

1 Refer to How to Determine Taxable Wages, for an illustration of SDI taxable wages for each employee for each quarter.

2 This amount would be reported on the appropriate reporting form. Refer to Reporting Requirements for additional information about reporting forms.

For additional assistance, contact the Taxpayer Assistance Center at 1-888-745-3886.