Please be aware of a significant update in the payroll tax structure that affects all California employees starting in 2024.
California State Disability Insurance (SDI) Payroll Tax Change:
Traditionally, the California SDI payroll tax of 1.1%, which funds the state’s disability insurance program, was applied to wages up to a cap of $153,164.
Starting in 2024, California has removed this wage cap, and the 1.1% payroll tax will now be applicable to all wage income without limit.
Consequently, the highest individual income tax rate on wage income in California will rise to 14.4%.
It is crucial for all employers and employees to take note of this change as it will impact net income and payroll processing. If you have any questions regarding how this change affects your payroll operations or if you require assistance in adjusting to the new legislation, please contact us.