SDI / SUI Calculation

State Disability Insurance Expense and Withholding

State Unemployment Insurance Expense and Withholding

SDI / SUI

AccountEdge uses two figures to track maximum SUI Tax expense.

Each SUI tax has a Wage Max and a Tax Max. AccountEdge calculates the Tax Max as SUI Rate times the Wage Max.

Example:
Maximum Wage is $12,000
SUI Rate is .02%

AccountEdge will stop expensing or withholding SUI for an employee once the employee has reached the Tax Max of .02 x $12,000, or $240.00.

SUI is troublesome because the rate sometimes changes after several paychecks have been written. When the rate goes down mid-year, it is often the case that AccountEdge will stop expensing or withholding SUI before the Wage Max is met. This is because the Tax Max has already been met.

If the rate was 2% for the first 3 months of the year, and it goes down to .5%. Using our $12,000 wage max and an employee who has earned $3000 in the first quarter, the SUI tax would have accrued for $60.00 so far, or .02 x $3000.

Now the rate is changed to .5% with the same Wage Max. At the new rate, the new Tax Max has already been met in the First Quarter (.005 x $3000 = $15). So, even though the Wage Max of $12,000 has not been met, AccountEdge will stop calculating SUI because the Tax Max has been met.

A similar situation occurs when the rate goes up. AccountEdge will continue to calculate SUI even after the Wage Max has been met, because the Tax Max has not been met at the new, higher rate.