2026 California State Disability Insurance (SDI) Voluntary Plan guide
California’s 2026 Voluntary Plan (VP) rates have been updated, with the maximum weekly benefit increasing to $1,765. Learn how private disability plans operate, understand the new assessment rates for employers, and see how 2026 figures compare to last year.
Under California law, employers may opt out of the state-run Disability Insurance (DI) and Paid Family Leave (PFL) programs in favor of a Voluntary Plan (VP). To be approved, these private plans must provide all the same benefits as the State Plan, plus at least one additional benefit or higher payout level, and cannot cost employees more than the standard SDI tax.
Below, we outlines the 2026 parameters for Voluntary Plans, including the updated contribution rates, benefit caps, and the administrative assessment rates paid by employers. You can
What is an SDI Voluntary Plan?
A Voluntary Plan is a private disability insurance program that an employer or a group of employees can choose to implement instead of the mandatory state coverage. These plans are governed by the California Unemployment Insurance Code (CUIC) and must be approved by the Employment Development Department (EDD).
Key requirements for a Voluntary Plan include:
- Superior Benefits: It must offer at least one benefit that is better than the State Plan (e.g., a higher weekly payout or a shorter waiting period).
- Equal Cost: The employee contribution rate cannot exceed the current state SDI tax rate.
- Employee Consent: A majority of the employer's employees must agree to the plan before it is implemented.
2026 VP Contribution Rates and Benefit Amounts
Effective January 1, 2026, the contribution and benefit limits for Voluntary Plans have been adjusted to match the broader shifts in California's disability insurance landscape.
| Category | 2026 VP Rate/Amount | 2025 VP Rate/Amount |
|---|---|---|
| Employee Contribution Rate | 1.3% | 1.2% |
| Taxable Wage Ceiling | No Limit (NA) | No Limit (NA) |
| Max Weekly Benefit (WBA) | $1,765 | $1,681 |
| Max Benefit Amount (52 weeks) | $91,780 | $87,412 |
| Employer Assessment Rate | 0.00182 | 0.00168 |
The Elimination of Wage Caps
Following the passage of Senate Bill 951, the Taxable Wage Ceiling was eliminated on January 1, 2024. This means that for 2026, the 1.3% contribution rate applies to all wages earned by an employee, with no maximum cap on the annual contribution amount.
Understanding the Assessment Rate
The Assessment Rate is a fee paid by employers directly to the EDD to cover the administrative costs associated with overseeing Voluntary Plans.
For 2026, the assessment rate is 0.00182. This figure is calculated by taking the worker contribution rate (1.3%) and multiplying it by 14%, as per CUIC 3252(b). While employees pay the 1.3% contribution to fund their coverage, the assessment is an employer-paid obligation.
2026 vs. 2025: Key Changes
The transition from 2025 to 2026 reflects a general increase in both the cost of the program and the benefits provided:
- Contribution Increase: The rate has ticked up from 1.2% to 1.3%, aligning with the State Plan’s funding needs.
- Benefit Increase: The maximum weekly benefit has jumped by $84 per week (from $1,681 to $1,765), providing a higher safety net for workers during periods of disability or family leave.
- Total Payout Capacity: The maximum total benefit available over a full 52-week claim has increased by over $4,300 compared to 2025.
How to Apply for VP Benefits
If you are covered by a Voluntary Plan, you do not file your claim directly with the EDD. Instead:
- Check Your Paystub: If your paystub lists "VPDI" or a similar private plan name rather than "CASDI," you are likely covered by a Voluntary Plan.
- Contact Your Employer: Your HR department or benefits coordinator will provide the necessary forms and medical certification requirements specific to your company's plan.
- Appeals: Even though the plan is private, you still have the right to appeal a denied claim to the California Unemployment Insurance Appeals Board (CUIAB).
Sources & References
The information in this guides comes directly from official government agencies responsible for disability-related tax rules and programs:
- IRS Publication 907 outlines how disability income, deductions, credits, and ABLE accounts are treated for federal tax purposes.
- U.S. Department of Labor provides details on the Work Opportunity Tax Credit (WOTC), including employer eligibility and filing requirements.
- California Employment Development Department (EDD) explains the eWOTC portal, certification process, and deadlines for California businesses.
- CalABLE offers account information, contribution limits, and management tools for California’s ABLE savings program.
These sources are updated regularly and provide the most reliable information available for California individuals, families, and employers.
