October 31, 2022

California EDD Announces 2023 Changes

The EDD Tax Branch has released the State Disability Insurance (SDI) withholding rate for 2023. The rate will decrease from 1.1% to 0.9%. The taxable wage ceiling will increase from $145,600 to $153,164. The maximum cost for employees will decrease from $1,601.60 to $1,378.48.

We have reached out to the EDD to see when the 2023 maximum weekly benefit will be released and have been told that they are still working on that update. They are also working on their 2022 Fall bi-annual update. The EDD will be sending a newsblast once the updates for 2023 are finalized.

California permits employers to opt out of SDI and establish a private plan for Voluntary Disability and Paid Family Leave Insurance (known as a “Voluntary Plan”), provided certain requirements are met. Among these requirements are that the Voluntary Plan’s cost to employees be no more than the cost for SDI and that benefits paid by the plan are at least equal to what the EDD would pay.

If you think a Voluntary Plan would be a good option for your company and employees or would like to find out more information, please reach out to your Account Manager. The Larkin Company will reach out to our current Voluntary Plan clients to assist them in finalizing their plans for 2023.

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