18509: Setting up SDI and SDRs (DAS)

Only California, Hawaii, New Jersey, New York, Rhode Island, and Puerto Rico have State Disability Insurance (SDI). State Disability Insurance and its corresponding rates (SDRs) must be set up at both Firm > Rates & Withholding Setup > State Setup and Employees > Employee Setup.

The following terms are used in Drake Accounting to describe SDI:

• State Disability Insurance (SDI) - A generic, all-encompassing tax term for SDI
  
• State Disability Wage Base - The wage base for SDI (in other words, how much of the first X amount is subject to tax. If unlimited, use 0)
• State Disability Insurance (CA) or State Disability Rate or DI Contribution Rate (SDRs) - The percentage of SDI (entered as a decimal) that is taxed
• State Max SDI Amount - The max amount of SDI taxes that can be taken out

To set up SDI:

1. From the side menu, go to Firm > Rates & Withholding Setup > State Setup.
2. Select a state from the States list to view applicable State Rates and filing status rates.
   
3. In the State Rates section, from the Client drop list, either select <Global Rates> (for state rates and limits that are not client-specific) or an applicable Client (for client-specific rates and withholding limits).
4. In the State Rates section, enter the applicable state disability insurance data. Options are as follows:
   • CA - State Disability Insurance (SDR), State Disability Wage Base, and State Max SDI Amount
   • HI -  State Disability Rate, State Disability Wage Base, and State Max SDI Amount
     
   • NJ - DI Contribution Rate (SDR), State Disability Wage Base, and State Max SDI Amount
     
   • NY - State Disability Rate, State Disability Wage Base, and State Max SDI Amount
     
   • PR - State Disability Rate, State Disability Wage Base, and State Max SDI Amount
     
   • RI - State Disability Rate, State Disability Wage Base, and State Max SDI Amount
     

   NOTE: SDRs should be entered as decimals. For example, an 8% rate should be entered as 0.08.
   
   
   

5. Click Save.
6. From the side menu, go to Employees > Employee Setup.
7. Select the employee for whom to set up SDI.
8. Click the State Tax tab. Make sure the box Use Employee’s Taxable State for SDI Calculation is marked. This option will not appear if the While working in... state or territory does not have SDI.
   
   
   
   
9. Click Save.
   
   IMPORTANT: There will be issues with payroll if the state disability insurance is not set up correctly.

 For additional information on setting up rates and withholding, see KB 15047.