SDI: State Disability Insurance Definition

State Disability Insurance, or SDI, is a state tax paid by the employer and/or employee. SDI is a compensation plan established by the state to support injured or ill employees who are unable to work.

SDI Extended Definition
An injury or illness may leave an employee unable to work. State disability insurance is a state-established compensation plan that supports such individuals.

Disability includes any physical or mental injury or illness that prevents an employee from performing regular tasks. Disability insurance benefits available to a worker usually depend on the agreement been the employee and the employer.

Related Article
An Overview of State Disability Insurance for Employers

Last Updated By

Rachel Blakely-Gray | May 01, 2023