Do employees pay into unemployment in California? EDD tax breakdown explained

Oh wow okay so that makes a lot more sense. So the SDI on my check is disability, not unemployment? I always just assumed it was all going to the same pot.

Yeah the SDI thing trips everyone up. It covers disability leave and paid family leave through California EDD but it's completely separate from the UI unemployment fund.

This is accurate. Employers pay Federal Unemployment Tax Act (FUTA) as well as the state SUTA contributions. Zero employee contribution to UI in California. Your SDI rate for 2025 has also changed - there's no longer a wage cap on SDI withholding so high earners will notice a bigger deduction than previous years.

wait so if i get laid off my employer basically gets penalized for it? thats kinda wild i never knew that

Exactly right. It's called an experience rating system. Employers who have more UI claims filed against them pay a higher SUTA rate. It creates an incentive for employers to avoid unnecessary layoffs... in theory at least lol

So from the employee side there's literally nothing coming out of my paycheck for unemployment coverage? That's actually kind of reassuring I guess.

That's really helpful advice about setting up the account ahead of time. And yeah I've heard California EDD is nearly impossible to reach by phone. I'll check out that Claimyr site just in case.

claimyr actually worked for me too when I had an adjudication issue last year. Was stuck for almost 3 weeks unable to reach anyone and that service got me connected same day.

does it actually work or is it one of those things that sounds too good to be true? I've been trying to reach EDD for two weeks about my weekly claim

Thank you for clarifying the base period thing. I always wondered how they calculate the benefit amount. So it's based on what you actually earned not some flat rate?

Correct. California EDD looks at your highest earning quarter in the base period and calculates your weekly benefit amount from that. In 2025 the maximum weekly benefit amount is $450. So if you earned more you get more, up to that cap.

$450 a week maximum? That seems pretty low honestly especially in California where rent is insane

yeah $450/wk is rough. that's like $1800 a month. Try paying rent in LA or the bay on that lmao

Yes! The job search requirement is so important and people find out about it way too late. You need to document those 3 employer contacts per week and be ready to show them if audited. CalJOBS is the state system where you can also log your search activities.

wish someone had told me about CalJOBS before i started my claim. would have made keeping track so much easier

The weekly certification process is where a lot of people get tripped up. You answer questions about job search activity and earnings each week to continue receiving benefits. Missing a week or answering incorrectly can cause all kinds of issues with your California EDD claim.

interesting point about the indirect funding. never thought about it that way but yeah makes sense businesses bake all their tax costs into their overall compensation decisions

That's a really interesting perspective. Either way I'm glad to know that SDI line on my check isn't for unemployment at least now I know what it's actually for.

Adjudication with no explanation is the worst. Did you ever find out what triggered it for you?

Turns out there was a discrepancy between what my employer reported and what I said on my claim about my last day worked. A tiny difference caused weeks of delay. Eventually got it resolved but only after I used Claimyr to actually get through to an EDD agent. Found it through a thread like this one. claimyr.com was how I finally got the situation explained to me.

Ugh adjudication issues are so stressful. At least you got it resolved. How long after the adjudication was cleared did your payments actually come through?

Payments posted within about 3-4 business days after the adjudication cleared. Then I was backdated for all the weeks I had been certifying during the hold which was a relief.

It depends on the reason for the termination. California EDD evaluates misconduct claims on a case by case basis. Being fired for performance reasons or company restructuring is different from being fired for serious misconduct. When in doubt file the claim and let EDD determine eligibility - the worst they can do is deny it and you can appeal.

This is correct. California is actually relatively employee-friendly in this regard. Misconduct has to be willful and substantial to disqualify you. Being fired for not meeting performance metrics often doesn't rise to the level of disqualifying misconduct. File the claim.

ok that's actually reassuring. i was scared to even try. will file if it comes to that

What exactly is standby status and how do you apply for it through EDD?

Standby status means you're temporarily laid off but expect to return to your job within a set period. Your employer typically initiates this. On standby you may be exempt from the weekly job search requirements since you're expected to return to work. You still need to certify weekly though. Check with your employer first to see if they file for standby on your behalf.

i had standby status for 6 weeks when my employer had to shut down temporarily. it was honestly the easiest part of the UI process compared to the adjudication nightmare i had afterward lol

Okay so there is a minimum earnings threshold. Good to know. After 6 years at my job I definitely exceed that but it's useful information.

what happens if someone doesn't meet that threshold? like a part time worker?

Part time workers who don't meet the regular base period earnings requirement can sometimes qualify under the alternate base period which uses more recent quarters. California EDD has that as a backup calculation method.

This was literally me. I kept calling the main EDD number and just got disconnected over and over. Eventually used Claimyr which you can find at claimyr.com - there's a demo video at https://youtu.be/JmuwXR7HA10 that explains it. Got a callback from an actual EDD agent within about 24 hours and they explained what was holding up my claim. Saved me weeks of frustration.

I'll try it. At this point I've called probably 40 times and never gotten through. I just need someone to tell me what the issue is so I can fix it.

Pending on UI Online is usually either an identity verification issue or a potential eligibility question that EDD needs to investigate. Definitely need to talk to an agent to find out which one it is because the fix is completely different.

ugh ok I really hope claimyr works because I'm about to lose it. bills don't wait for EDD to figure out their phone system

Good to know about the employer notification. Our company has been pretty professional about the restructuring so far so hopefully it won't be contentious if it comes to that.

Employers disputing claims is way more common than people realize. Even when it's a clear layoff sometimes HR departments file responses that create delays. My employer accidentally reported my last day wrong and it triggered weeks of adjudication.

Oh wow good point I had not even thought about the health insurance piece yet. That's a whole other thing to figure out.

Losing your job counts as a qualifying life event for Covered California marketplace enrollment. You don't have to wait for open enrollment. Act within 60 days of losing employer coverage.

Exactly. And depending on your income on unemployment benefits you might even qualify for Medi-Cal. California has pretty generous Medi-Cal income thresholds compared to other states.

Yes! The waiting week confusion is real. That first week you certify is a mandatory waiting period and you won't receive payment for it. Starting from the second certified week you should see payments.

Oh I had no idea about the waiting week. So you'd potentially go almost 3 weeks without income after being laid off? Week 1 filing/processing + week 1 mandatory waiting + however long until the first payment posts?

Basically yeah. It's rough. That's why financial advisors always say keep 3-6 months of expenses saved as emergency fund but obviously most people don't have that.

The waiting week is also why it's so important to file as soon as you're laid off and not wait around. Every day you delay filing is a day you're pushing back when benefits start.

Oh that's really interesting. So even a reduction in hours could qualify you? How reduced do hours need to be to qualify for partial benefits?

Generally you need to be working reduced hours through no fault of your own and earning less than your weekly benefit amount. California EDD calculates a reduced benefit. Worth filing even if you're still partially employed.

Also related - there's the Work Sharing program in California where employers can apply for their employees to collect partial UI while working reduced hours during temporary slowdowns. Both the employer and employees benefit from it. Less well known but really useful.

The phone situation is the most frustrating part of the whole experience. You have a simple question but you literally cannot get a human on the line. EDD's callback system is also hit or miss from my experience.

That's why I keep recommending Claimyr in these threads. I know it might sound like I'm just promoting something but it genuinely solved the problem I couldn't solve on my own. For anyone with an urgent EDD issue they can't get answered, claimyr.com is worth looking at. The video demo at https://youtu.be/JmuwXR7HA10 shows exactly how it works.

Had not heard of Claimyr until this thread. Bookmarking it now for future reference because I am definitely going to need it again someday knowing my job situation lol

This is correct and an important distinction. California state income tax does not apply to unemployment benefits. Federal income tax does. You can have 10% withheld voluntarily from your EDD payments by requesting it on your claim, otherwise you may owe at tax time.

Wait so I should probably opt into federal tax withholding if I ever file? To avoid a surprise tax bill?

That's the general recommendation yes. You can also pay estimated quarterly taxes. Either way don't forget about the federal liability or you'll have an unpleasant surprise in April.

I forgot to withhold federal taxes during my claim and owed like $800 at tax time. Do not make my mistake lol

This is exactly the practical checklist I needed. Thank you. I'm going to set up my UI Online account this weekend while everything is still normal and calm.

Creating the UI Online account ahead of time is genuinely great advice. EDD identity verification can be a whole separate ordeal if you haven't set anything up. Better to work through any ID.me verification issues when you're not under financial stress.

Traditional California EDD UI requires a conventional W2 employment relationship. Gig workers classified as independent contractors typically don't qualify for regular UI because their earnings weren't subject to SUTA contributions from the hiring company. The COVID-era PUA program that covered gig workers ended. Currently gig workers generally need to look at whether they might be misclassified as contractors under AB5.

yeah my cousin drives for a delivery app full time. sounds like he'd have a tough time getting UI then unless he was actually misclassified

AB5 misclassification claims are actually a real avenue. If the work meets certain tests, EDD may determine someone is actually an employee for UI purposes. Not simple but it's been done. Would require filing the claim and letting EDD make the determination.