Determine Taxable Wages and Calculate Taxes
Find out how taxable wages are calculated, including Unemployment Insurance tax, Employment Training Tax, and State Disability Insurance tax.
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 determine the contribution amounts to be paid or withheld for reporting to us.
Rate limits used are an estimate only. Current taxable wage limits are available on Rates and Withholding
Taxable Wage
Limits Used:
UI – $7,000
SDI – $128,298
| First Quarter | Second Quarter | Third Quarter | Fourth Quarter | |||||
|---|---|---|---|---|---|---|---|---|
| Employee | A | B | A | B | A | B | A | B |
| Paid Wages | $35,000 | $6,000 | $35,000 | $500 | $35,000 | $8,000 | $35,000 | $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 | $35,000 | $6,000 | $35,000 | $500 | $35,000 | $8,000 | $23,2983 | $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, the employer will continue to pay taxes for every other employee until each employee reaches the UI taxable wage limit of $7,000 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. Employee A has reached the SDI taxable wage limit of $128,298 for the year.
Calculate UI and ETT
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 serve as an estimate only, employer’s individual rates may vary.
Follow these steps to access your current employer payroll tax rates through e-Services for Business:
Step 1: Log in to e-Services for Business.
Step 2: Select View your Payroll Tax Rates under the menu: More Online Services.
Note: 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 , 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 SDI 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 determine the contribution amounts to be paid or withheld for reporting to us.
Rates used serve as an estimate only, SDI rates are set by law each year. Current SDI rates are available online at Rates and Withholding. Refer to for additional information on determining the taxable wages to be used in the calculation.
State Disability Insurance Tax
Rates Used: 1.2% (.012)
| First Quarter | Second Quarter | Third Quarter | Fourth Quarter | |
|---|---|---|---|---|
| Taxable wages for SDI.1 | $16,000 | $35,000 | $43,000 | $35,880 |
| Rate | 1.2% | 1.2% | 1.2% | 1.2% |
| Total SDI tax to be reported.2 | $192.00 | $420.00 | $516.00 | $430.56 |
1 Refer to , 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 to Reporting Requirements for additional information about reporting forms.
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.