What is ny sdi tax?

New York State Disability Insurance (SDI) tax is a payroll tax that is collected from employees to fund the state's disability insurance program. The SDI tax rate for 2021 is 0.511% of an employee's wages, up to a maximum annual contribution of $196.72. Employers are required to withhold and remit this tax on behalf of their employees.

The purpose of the NY SDI tax is to provide temporary cash benefits to eligible workers who are unable to work due to a disability, illness, or injury that is not work-related. These benefits can help replace a portion of lost wages during the period of disability.

Employers with payrolls of $300,000 or more in a calendar year are required to provide disability benefits coverage for their employees. Employers can either choose to purchase a private disability insurance policy or participate in the state's disability insurance program, which is funded by the SDI tax.

Employees who qualify for NY SDI benefits must have worked and earned a minimum amount of wages in covered employment during the base period, which is the first four of the last five completed calendar quarters before the disability began.

Overall, the NY SDI tax is an important source of funding for the state's disability insurance program, ensuring that workers have access to financial support when they are unable to work due to a temporary disability.