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Think California Taxes Couldn’t Go Higher?

Resource & Insights
California removed the income cap subject to the State Disability Insurance contribution as of 1/1/2024 and increased the SDI contribution rate to 1.1 percent.
March 27, 2024
Dawn Rhea
Dawn Rhea
Partner, National Tax Office

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California Tax

California removed the income cap subject to the State Disability Insurance (SDI) contribution as of January 1, 2024. California also increased the SDI contribution rate to 1.1 percent for 2024, up from 0.9 percent in 2023. The elimination of the income cap and increase in rate effectively increases California’s top tax rate on income to 14.4 percent, up from 13.3 percent.

The changes were part of SB 951 (2022), which removed the taxable wage limit and maximum withholdings for employees subject to SDI contribution to pay for an extension of SDI and Paid Family Leave (PFL) benefits.

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