How to Calculate Short-Term Disability Benefits in California
California's short-term disability insurance program pays a percentage of your regular wages.
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In California, employees must contribute a small payroll tax to the state's short-term disability insurance (SDI) program. These payments fund disability benefits for employees who are temporarily unable to work due to disability, including pregnancy.
Most California employees are eligible for SDI; to learn the eligibility rules, see Do I Qualify for California State Disability Insurance? If you qualify for benefits, you will receive a percentage of your regular wages. Most employees receive about 55% of what they were earning before becoming disabled. This article explains how to figure out your benefit amount.
Understanding the Base Period
California employees are generally entitled to an SDI benefit equal to 55% of their regular wages, up to a cap. Currently, the cap is just over $1,000 per week; the state adjusts the cap as necessary to adjust for inflation.
However, you won't necessarily receive 55% of what you were earning just before becoming unable to work. Instead, California benefits depend on your earnings during the base period. The base period is the 12-month period ending just before the last complete calendar quarter you were able to work. For example, if you become disabled in November 2013, the last complete calendar quarter you worked was July 1, 2013 through September 30, 2013. So, your base period for benefits is July 1, 2012 through June 30, 2013.
The state uses your highest-paid calendar quarter during the base period as a starting point. If you receive the same salary year in and year out, the timing of your claim won't affect you much. Your highest-paid quarter will be the same as any other quarter. However, if your wages are irregular, or you receive a windfall at some point, when you file your claim could significantly change your benefit amount. If the months in which you earn the most fall within the base period, your payment will be higher.
For instance, let's say you receive a significant retention bonus after your company is purchased. Using the base period example above, if your bonus was paid in July of 2013, it would not fall within your base period, and your benefits would not reflect that higher amount. However, if it was paid in June of 2013, that would be your highest-paid quarter in the base period, and would be used to calculate your benefits.
If you have irregular earnings, you may be able to time your claim to make sure that your base period captures your highest earnings. You must file for benefits within 49 days of becoming disabled, so you can't wait forever. However, if postponing your claim for a few days would yield a much higher benefit payment, and you are still within the filing deadline, you may want to delay your claim. Speak to an attorney if you have any questions about how this works -- or about the best time to file for benefits.
Calculating SDI Benefits
California pays SDI benefits on a daily basis. The state's Economic Development Department (EDD) will use the highest-paid quarter of your base period to come up with a daily amount. For example, if you earned 10,000 in your highest-paid quarter, and that quarter included 91 days, your daily earnings amount would be about $109. The EDD will pay you 55% of that amount, or about $60 per day. Note that this is the amount you will earn for every single day you are not working, including weekends. So your weekly benefit would add up to $60 times seven days, or $420.
If you have high earnings, you may be subject to the cap. For example, if you earned $30,000 in your highest-paid quarter, which included 91 days, your daily earnings amount would be about $327. The EDD's initial benefit calculation would be 55% of this amount, or roughly $180. Because this daily amount times seven days ($1,260) is more than the state's current weekly maximum of $1,069, your weekly benefit would be the maximum of $1,069.
The EDD has published a schedule you can use to calculate your benefit amount, once you know your earnings for the highest-paid quarter of the base period.
After the EDD receives your claim for benefits, it will contact your employer and may contact you for information. If the EDD decides you are eligible for benefits, it will send you a notice of eligibility, along with its initial calculation of your benefit amount.
If You Receive Other Earnings
If you are receiving money while you are disabled, it may affect your benefit amount. If you are using accrued paid vacation time, you will still receive full disability benefits. However, if you are using accrued sick time, paid disability leave available through your employer's policies, or PTO that is intended to cover all reasons for time off, your benefits will be affects. The EDD will subtract what you are actually being paid from your benefit amount, and pay you the difference (if there is one).
Similarly, if you return to work gradually, working shorter hours or in a light duty position, the EDD will subtract what you are paid for your work from your benefit amount, and pay you the difference. This is allowed only while you are still disabled, however. Once you return to your regular work, your benefits will cease.
Receiving Your Benefits
Typically, claimants receive benefits every two weeks while they are out of work. You may receive your benefits on a bank debit card, which you can use to withdraw cash or pay for items, like a regular debit card. You can also transfer your benefits from the EDD debit card to your regular bank account.
While you are on disability leave, you may have to complete additional paperwork to receive your benefits. For example, if you have to stay out longer than you planned, or if you didn't know how long your disability would last when you applied for benefits, you may need to confirm to the EDD that you are still unable to work. Your health care provider may also have to provide additional information.