State disability insurance deductions require an employer to have at least how many employees?

State disability insurance deductions require an employer to have at least how many employees?

• A. 0 employees
• B. 1 or more
• C. 5 or more
• D. 10 or more

Answer: (B)

State Disability Insurance deductions apply to payroll withholding for employees, and the obligation starts as soon as you have any worker on your payroll. In California, you withhold SDI from each employee’s wages, up to the annual limit, and remit those amounts to the state. If you have no employees, there’s no one to withhold from, so SDI deductions aren’t required for your payroll. For a landscaping contractor, that means once you hire even one employee, you must begin withholding SDI from that person’s wages. The other options aren’t correct because they imply a higher threshold. Zero employees would mean no SDI withholding, which isn’t the rule once you hire someone. Requiring five or ten or more employees would unnecessarily delay the start of a required deduction. Therefore, the threshold is having at least one employee.

State Disability Insurance deductions apply to payroll withholding for employees, and the obligation starts as soon as you have any worker on your payroll. In California, you withhold SDI from each employee’s wages, up to the annual limit, and remit those amounts to the state. If you have no employees, there’s no one to withhold from, so SDI deductions aren’t required for your payroll. For a landscaping contractor, that means once you hire even one employee, you must begin withholding SDI from that person’s wages.

The other options aren’t correct because they imply a higher threshold. Zero employees would mean no SDI withholding, which isn’t the rule once you hire someone. Requiring five or ten or more employees would unnecessarily delay the start of a required deduction. Therefore, the threshold is having at least one employee.