Determine Taxable Wages and Calculate Taxes
Learn about taxable wages and how to calculate the taxes you need to pay, including Unemployment Insurance (UI), Employment Training Tax (ETT), and State Disability Insurance (SDI). Refer to Types of Payments (DE 231TP) to find out what types of payments are subject to UI, ETT, and SDI.
Taxable Wages
UI and ETT1 are paid by the employer on the first $7,000 in wages earned by each employee during the year. SDI is withheld from the employee’s wages and there is no SDI taxable wage limit.
How to Find Your UI /ETT Rate
You can find your current UI and ETT rate by using one of the following options:
- Notice of Contribution Rates and Statement of UI Reserve Account (DE 2088)
Your UI and ETT rate is mailed to you each year on the Notice of Contribution Rates and Statement of UI Reserve Account (DE 2088). Keep the DE 2088 for your records. You can also access it online in your e-Services for Business account after it is mailed. - e-Services for Business:
Step 1: Log in to e-Services for Business.
Step 2: Select Get My UI Rate under the Account Management panel. - UI Rate Search (No enrollment necessary.)
Step 1: Go to UI Rate Search.
Step 2: Enter your employer payroll tax account number.
Step 3: Select Search.
UI Calculations
The UI taxes are calculated by multiplying the UI taxable wage amount by the employer’s UI tax rate.
The table below shows an example of how UI taxable wages are calculated for an employer with two employees.
Rate Used: 3.4% (.034). The rate used in the following table is just for this example.
| Employee A2 | First Quarter | Second Quarter | Third Quarter | Fourth Quarter | Total for Year |
|---|---|---|---|---|---|
| Wages Paid for Quarter | $45,000 | $45,000 | $45,000 | $45,000 | =$180,000 |
| UI Taxable Wages | $7,000 | $0 | $0 | $0 | $7,000 |
| UI Tax Rate 3.4% (.034) | x.034 | x.034 | x.034 | x.034 | x.034 |
| UI Tax Due for Employee A | $238 | $0 | $0 | $238 | $238 |
| Employee B3 | First Quarter | Second Quarter | Third Quarter | Fourth Quarter | Total for Year |
|---|---|---|---|---|---|
| Wages Paid for Quarter | $2,500 | $2,500 | $2,500 | $2,500 | =$10,000 |
| UI Taxable Wages | $2,500 | $2,500 | $2,000 | $0.00 | $7,000 |
| UI Tax Rate 3.4% (.034) | x.034 | x.034 | x.034 | x.034 | x.034 |
| UI Tax Due for Employee B | $85 | $85 | $68 | $0 | $238 |
| Total for All Employees4 | First Quarter | Second Quarter | Third Quarter | Fourth Quarter | Total for Year |
|---|---|---|---|---|---|
| Wages Paid for Quarter | $47,500 | $47,500 | $47,500 | $47,500 | =$190,000 |
| UI Taxable Wages | $9,500 | $2,500 | $2,000 | $0 | $14,000 |
| UI Tax Rate 3.4% (.034) | x.034 | x.034 | x.034 | x.034 | x.034 |
| UI Tax Due for Employee A | $323 | $85 | $68 | $0 | $476 |
1 ETT is not required if an employer has a negative reserve account balance for the year, or if the employer is subject to the maximum rate + 2 percent penalty under section 977(c) of the California Unemployment Insurance Code. Please check your annual DE 2088 rate notice for your ETT rate.
2Employee A was paid $45,000 each quarter and reached the UI taxable wage limit of $7,000 for the year in the first quarter.
3Employee B reached the UI taxable wage limit of $7,000 in the third quarter. The employer will report the full $2,500 of wages paid to this employee for the first and second quarter, but will only report $2,000 of wages in the third quarter because that is when the UI wage limit is reached.
4The total UI taxable wages for all employees for each quarter is the amount the employer would report as UI taxable wages on the quarterly tax return.
ETT Calculations
ETT is calculated by multiplying the ETT taxable wage amount by the ETT rate. Please check your annual DE 2088 rate notice as not all employers need to pay ETT1.
The table below shows an example of how the ETT taxable wages were calculated for the same two employees. Rate Used: 0.1% (.001). The rate used in the following table is just for this example.
| Employee A | First Quarter | Second Quarter | Third Quarter | Fourth Quarter | Total for Year |
|---|---|---|---|---|---|
| ETT Taxable Wages | $7,000 | $0 | $0 | $0 | $7,000 |
| ETT Tax Rate .1% (.001) | x.001 | x.001 | x.034 | x.034 | x.001 |
| ETT Tax Due for Employee A | $7 | $0 | $0 | $238 | $7 |
| Employee B | First Quarter | Second Quarter | Third Quarter | Fourth Quarter | Total for Year |
|---|---|---|---|---|---|
| ETT Taxable Wages | $2,500 | $2,500 | $0 | $0 | $7,000 |
| ETT Tax Rate .1% (.001) | x.001 | x.001 | x.001 | x.001 | x.001 |
| ETT Tax Due for Employee B | $2.50 | $2.50 | $0 | $0 | $7 |
| Total for All Employees4 | First Quarter | Second Quarter | Third Quarter | Fourth Quarter | Total for Year |
|---|---|---|---|---|---|
| UI Taxable Wages | $9,500 | $2,500 | $0 | $0 | $14,000 |
| UI Tax Rate 3.4% (.034) | x.001 | x.001 | x.001 | x.001 | x.001 |
| UI Tax Due for Employee A | $9.50 | $2.50 | $68 | $0 | $14 |
SDI Taxable Wages and SDI Tax
All wages paid are currently subject to SDI tax1. The calculated amounts are withheld by the employer from the employee’s wages and paid to the EDD. The SDI rate is the same for all employers and can be found on our Contribution Rates Webpage.
SDI Calculations
The table below provides an example of how SDI is calculated using the 2024 SDI rate of 1.1%.
| Employee A | First Quarter | Second Quarter | Third Quarter | Fourth Quarter | Total for Year |
|---|---|---|---|---|---|
| Wages Paid for Quarter | $45,000 | $45,000 | $45,000 | $45,000 | =$180,000 |
| SDI Taxable Wages | $45,000 | $45,000 | $45,000 | $45,000 | $180,000 |
| SDI Tax Rate 1.1% (.011) | x.011 | x.011 | x.011 | x.011 | x.011 |
| Total SDI Tax to Withhold | $495 | $495 | $495 | $495 | $1,980 |
| Employee B | First Quarter | Second Quarter | Third Quarter | Fourth Quarter | Total for Year |
|---|---|---|---|---|---|
| Wages Paid for Quarter | $2,500 | $2,500 | $2,500 | $2,500 | =$10,000 |
| SDI Taxable Wages | $2,500 | $2,500 | $2,500 | $2,500 | $10,000 |
| SDI Tax Rate 1.1% (.011) | x.011 | x.011 | x.011 | x.011 | x.011 |
| Total SDI Tax to Withhold | $27.50 | $27.50 | $27.50 | $27.50 | $110 |
| Total for All Employees | First Quarter | Second Quarter | Third Quarter | Fourth Quarter | Total for Year |
|---|---|---|---|---|---|
| Wages Paid for Quarter | $47,500 | $47,500 | $47,500 | $47,500 | =$190,000 |
| Total SDI Taxable Wages | $47,500 | $47,500 | $47,500 | $47,500 | $190,000 |
| SDI Tax Rate 1.1% (.011) | x.011 | x.011 | x.011 | x.011 | x.011 |
| Total SDI Tax to Withhold | $522.50 | $522.50 | $522.50 | $522.50 | $2,090 |
1Effective January 1, 2024, Senate Bill 951 removed the taxable wage limit and maximum withholdings for each employee subject to SDI contributions.
For Further Assistance and Support
Contact the Taxpayer Assistance Center at 1-888-745-3886.
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Contact Us
If you have questions, Contact Payroll Taxes. You can also contact the Taxpayer Assistance Center at 1-888-745-3886 or visit your local Employment Tax Office.