If you work in New Jersey, your paycheck probably includes a few small state deductions — things like Unemployment Insurance (UI), Family Leave Insurance (FLI), and Temporary Disability Insurance (TDI), also called the State Disability Insurance (SDI) tax.
This deduction helps fund the program that pays benefits if you’re unable to work because of a non-work-related illness or injury.
Let’s break down exactly how much the SDI (TDI) tax costs in 2025 — and what that means for your take-home pay.
What Is the SDI (Temporary Disability Insurance) Tax in New Jersey?
The New Jersey Temporary Disability Insurance (TDI) program — often called SDI by employees — provides short-term wage replacement if you can’t work due to sickness, pregnancy, or an off-the-job injury.
It’s funded by employee payroll deductions, meaning a small percentage of your earnings is withheld from each paycheck. Employers also pay their own share separately to the state.
These contributions ensure that, if you ever need disability benefits, the money is already available to cover part of your lost wages.
2025 New Jersey SDI (TDI) Tax Rate and Wage Base
For 2025, here’s what the New Jersey Department of Labor announced:
| Category | Employee Rate | Taxable Wage Base | Maximum Employee Contribution |
|---|---|---|---|
| Temporary Disability (TDI / SDI) | 0.23 % | $165,400 | $380.42 |
That means you’ll pay 0.23 % of your wages until your year-to-date earnings reach $165,400.
After that, no more SDI (TDI) is withheld for the rest of the year.
If you’re curious about other payroll taxes, you can compare them using this New Jersey Payroll Tax Calculator.
How Much SDI Will Be Taken from Your Paycheck?
Let’s look at what this deduction means in real terms.
| Annual Salary | 0.23 % Contribution | Approx. Biweekly Deduction (26 Pays) |
|---|---|---|
| $40,000 | $92 / year | $3.54 per paycheck |
| $60,000 | $138 / year | $5.31 per paycheck |
| $100,000 | $230 / year | $8.85 per paycheck |
| $165,400 + | $380.42 max | capped at $380.42 total for year |
For most workers, the SDI deduction is only a few dollars per pay period — a small contribution toward valuable income protection.
If you’d like to see how this fits with your overall take-home pay, use the New Jersey Gross-to-Net Calculator to estimate your net earnings after all deductions.
How the SDI Deduction Appears on Your Pay Stub
On your pay stub, you’ll likely see the SDI tax labeled as:
“TDI”, “NJ TDI”, or “Temporary Disability Insurance”
It will be grouped with other state payroll deductions, such as:
- UI – Unemployment Insurance
- FLI – Family Leave Insurance
- WDF – Workforce Development Fund
Once you’ve reached the wage base of $165,400, the TDI/SDI line will stop appearing for the rest of the year — your paycheck will increase slightly once that cap is hit.
Why You Pay SDI (TDI) in New Jersey
This deduction acts as an insurance policy for your income.
If you’re unable to work for medical reasons, the program provides partial wage replacement while you recover.
Think of it as paying a few dollars from every paycheck now to protect yourself later.
And because it’s state-run, benefits are guaranteed if you qualify — no private premiums required.
You can learn how these deductions combine by checking your New Jersey Paycheck Deductions Calculator.
When Contributions Stop and Refunds Apply
After your wages exceed $165,400 in 2025, the SDI tax automatically stops.
If you work multiple jobs, each employer may withhold up to the wage-base cap separately.
If that happens and your combined deductions exceed $380.42 for the year, you can apply for a refund from the New Jersey Division of Taxation using Form NJ-2450.
Quick Facts About New Jersey SDI (TDI) Tax
| Topic | Details |
|---|---|
| Employee rate (2025) | 0.23 % |
| Taxable wage base | $165,400 |
| Maximum annual deduction | $380.42 |
| Who pays | Employees + Employers (separate shares) |
| Stops after cap? | Yes |
| Pay-stub label | “TDI”, “NJ SDI”, or “Temporary Disability Insurance” |
| Refund if overpaid? | Yes, via Form NJ-2450 |
FAQs About the New Jersey SDI Tax
1. What is the current SDI rate in New Jersey?
The 2025 employee contribution rate is 0.23 % of wages up to $165,400.
2. How much will it cost per paycheck?
Typically between $3 and $9 per pay period for most full-time workers.
3. Does everyone pay SDI in New Jersey?
Yes, nearly all employees contribute unless they’re exempt under a private disability plan approved by the state.
4. Do dependents or filing status affect the SDI tax?
No — the SDI rate is flat, not based on dependents or income bracket.
5. What happens when I hit the wage base limit?
Your SDI deductions stop for the rest of the calendar year.
6. How can I verify my SDI contributions?
Check your pay stub or W-2 — look for a line labeled “TDI/SDI,” and ensure the total doesn’t exceed $380.42 for 2025.
7. Is the SDI deduction refundable if overpaid?
Yes, you can file Form NJ-2450 for a refund if multiple employers withheld too much.
“Find the latest New Jersey Payroll Tax Calculator to estimate all state taxes, including SDI.”
“Learn about New Jersey Family Leave Insurance Tax and how it relates to SDI contributions.”
“Check your total deductions using our New Jersey Paycheck Deductions Calculator.”
“Use the New Jersey FICA Calculator to include Social Security and Medicare taxes in your estimate.”
“Understand How New Jersey Unemployment Insurance Affects Your Paycheck.”
“See your complete take-home pay with our Gross-to-Net Paycheck Calculator.”
Juanita is the creator behind njpaycheckcalculator.org, dedicated to providing accurate and easy-to-use paycheck calculation tools for New Jersey residents. With a strong focus on clarity and reliability, she helps users understand their paychecks and tax deductions with confidence. Juanita is passionate about simplifying complex financial calculations, empowering users to make informed decisions about their income and budgeting.