Payroll

Change in SDI Withholding Rate

Effective April 1, 2000, the State Disability Insurance (SDI) withholding
rate increases to 0.7% (.007).

The chart below shows the two SDI withholding rates that are in effect for
the calendar year 2000.

Wages Paid During  Withholding Rate
January 1 - March 31    0.5% (.005)
April 1 - December 31   0.7% (.007)

The SDI taxable wage limit will remain at $46,327 per employee for the
calendar year 2000.

Your clients' Payroll Tax Deposit (DE 88) coupons may include the preprinted
0.5% SDI rate.  It is important to note that your clients will not receive
new coupons so be sure that they withhold at 0.7% starting with wages paid on
or after April 1, 2000.

The Employment Development Department is currently developing year-end
reporting guidelines for the calendar year 2000 and will provide you with
additional information as it becomes available.

If you have any questions about the SDI rate change, please contact your
local Employment Tax Customer Service Office listed in the white pages of
your telephone directory under "Employment Development Department, Payroll
Tax Information" or check our Internet site at http://www.edd.ca.gov
This important message is brought to you by the California Society of
Enrolled Agents PIES (Problem Identification for Early Solution)