SDI or TDI: What is it?

State Disability Insurance (SDI) is required by some states. In some states, employees pay SDI, in others, employers pay, and in some, both pay. It is also know as Temporary Disability Insurance (TDI).

The state informs you of your SDI rate and effective date each year.

• If your rate changes, enter the new rate and effective date immediately. (Do not delete your old rate; we need it to calculate tax forms.)
• For some states, we calculate SDI automatically for you. You don't need to enter it.

In Hawaii and New York, an employer can withhold some portion of TDI (and in Hawaii, of HC) from employees.

To withhold these from employees:

1. Go here.
   (Or choose Setup > Deductions.)
2. Click Add a New Deduction/Contribution.
3. Select a Categoryand then a Type.
   • New York employers choose "Other deductions" and then "NY SDI."
   • Hawaii employers choose "Other deductions" and then "Other after tax deductions."
4. Click OK.
5. Set up each employee to use the new deduction.

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