California SDI Setup

TechKnowledge Content


How do I setup the California SDI (State Disability Insurance) tax? 


This tax is not included in the state tax calculations and can be set up as a local tax and included in this area on the W2. The setup of the tax is as follows: 

1. Click on Tools under Microsoft Dynamics GP, point to Setup, point to Payroll and click Local Tax.

2. Enter in the Local Tax Code of SDI and a description, and tax type of Other Income Tax.

3. From the Calculations on the left-hand side, insert over Check Maximum YTD Taxable Wages followed by Apply Tax Rate.

4. Enter in the Tax Rate Amount in the lower right-hand corner.

5. Enter Maximum YTD Taxable Wages in the lower left-hand corner.

6.  Save.

7. Go to Cards, point to Payroll and click Local Tax. Select the Employee ID's that you wish to assign this new SDI tax code to. Mark the checkbox if you want the tax to Automatically Calculate. Complete the setup as needed.

8. Ensure the employee's pay codes are subject to local tax for the SDI to be taken. 

This article was TechKnowledge Document ID:7279

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