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.

e-Services for Business

Use e-Services for Business para administrar su cuenta de impuestos sobre la nómina del empleador en línea.

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Comuníquese con nosotros

Si tiene preguntas, comuníquese con las oficinas de impuestos sobre la nómina. También puede contactar con el Centro de Asistencia al Contribuyente llamando al 1-888-745-3886 o visitar la oficina del impuesto al empleo más cercana.

Last Revised: 06/17/2022