SDI: Who is elegible for it?

You’re going about your day, doing your job, when something unexpected happens. Maybe you break a bone, or maybe your doctor tells you it’s time for surgery and rest—not optional. Just like that, work is off the table. But life? Rent, groceries, insurance bills? Still very much on. This is exactly why State Disability Insurance (SDI) exists. It’s a state-backed system that steps in when your health takes you out of the game for a while. Not forever—just long enough to throw things off balance.

If you’re an employee, SDI can be your financial cushion. If you’re in HR, you’re the one helping people understand how to land on it.

What is SDI?

Think of SDI as short-term financial backup for people who can’t work due to personal (non-job-related) medical issues. It doesn’t cover injuries that happen on the job—that’s workers’ comp territory. But if you’re recovering from surgery, dealing with serious anxiety, or experiencing complications during pregnancy, SDI might have your back.

It’s not a federal program—only a handful of states offer it: California, New York, New Jersey, Rhode Island, Hawaii, and Puerto Rico. If you’re working in one of those, a tiny chunk of your paycheck probably goes into the SDI fund.

And that’s key: SDI is something you’re actively paying into. So when you need help, it’s your own safety net you’re drawing from.

How does the SDI actually work?

Every payday, a small percentage of your gross income goes toward the state disability insurance fund. You’ll see it on your paycheck—sometimes as “CASDI” or “Disability Tax.” Most people don’t give it a second glance… until they need it.

If something happens and you’re medically certified as unable to work, you can file a claim. Usually, there’s a short waiting period (about a week). Then, if approved, you’ll get partial wage replacement, generally via direct deposit or a state-issued debit card.

The benefit amount? It’s based on what you earned before you got sick or injured. Most folks can get between 55% and 70% of their usual income. It’s not a full paycheck, but it can take the edge off—especially when you’re focused on healing, not hustling.

Who’s covered by the SDI?

Eligibility depends on the employee’s role and where they work. If someone is employed in a state that participates in SDI and sees the deduction listed on their pay stub, they’re likely covered. However, there are exceptions. Many federal employees are excluded, and self-employed individuals aren’t automatically enrolled—though some states offer an opt-in option for those who qualify.

Coverage isn’t always limited to someone who’s currently on the payroll. In many cases, an individual who recently left a job—yet was actively contributing to SDI at the time—can still qualify for benefits. This becomes especially relevant during pregnancy-related leave, which remains one of the most common reasons employees turn to SDI for support.

But eligibility has its boundaries. If someone stepped away from their job voluntarily and didn’t have a strong qualifying reason—or if their earnings during the base period weren’t high enough—their claim could be denied. That’s where HR plays a critical role.

When guidance comes early and clearly, employees are far less likely to be caught off guard by technicalities. A well-informed person is not only more likely to submit a complete, timely claim—they’re also better equipped to make decisions during periods of stress, without added uncertainty.

What is SDI on a Paycheck? 

Let’s face it—most people skim their pay stubs. But that “SDI” line? It’s worth paying attention to. It shows how much you’re contributing to your state’s disability insurance fund.

It’s not a huge amount—usually under 1% of your wages—but it adds up. And when life takes an unexpected turn, that tiny deduction can turn into the lifeline that keeps your rent paid.

For HR, this is where transparency matters. Employees should understand what this deduction is and how it can help them, long before they need to use it.

What kind of benefits does the SDI bring?

SDI provides partial income when you’re out of work temporarily due to health issues. It won’t make you rich, but it’ll help you stay afloat.

Pregnancy? Covered. Mental health struggles? Also covered. Minor surgery that takes you out for six weeks? Covered too. In some states, SDI overlaps with Paid Family Leave, so you might even get extended time off to care for a new baby or a sick family member.

But SDI isn’t forever—it’s designed for recovery, not retirement. Once you’re ready to return to work, benefits end. Still, that temporary support can be the difference between surviving and spiraling.

How much do they pay for disability?

It varies. States look at what you earned in the past year and apply a formula. The more you made, the higher your benefit—up to a point. High earners in California, for instance, can get over $1,600 a week. There’s usually a minimum too, so lower-income workers aren’t left out.

One good thing? SDI benefits are often not federally taxed (though your state might treat it differently). Bottom line: it’s money you can count on when working isn’t an option.

Is it the same as SSI?

Nope, and this gets confusing fast. SDI is based on your work history and income. It’s short-term. You pay into it with every paycheck.

Supplemental Security Income (SSI) is a federal safety net for folks with long-term disabilities or low income. It’s needs-based, not earnings-based.

Most people get more from SDI than SSI, assuming they’ve been working and contributing. Some might qualify for both, but it depends. Either way, HR can help clarify who’s eligible for what.

How does HR manage it? 

For HR professionals, managing SDI claims isn’t just an administrative task—it’s personal. You’re helping someone during what’s likely a very tough time.

That means guiding them through claims, explaining timelines, verifying employment and wages, and making sure their information is secure. You’re also the one who makes sure SDI doesn’t conflict with PTO, FMLA, or other leave options.

And when that employee is ready to return? HR helps make the transition back as smooth as possible—whether that’s reduced hours, remote work, or temporary accommodations.

SDI might not be something employees think about often—but when they need it, they really need it. For them, it’s peace of mind. For HR, it’s a responsibility—and an opportunity to genuinely support someone in crisis.

Handled right, SDI helps people heal without fear of financial ruin. It’s not just a program. It’s a promise: that when life throws a curveball, someone’s got their back.