Understanding NY State Disability Insurance (SDI) & Paid Family Leave (PFL)

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What are NY SDI and PFL?

In New York, State Disability Insurance (SDI) and Paid Family Leave (PFL) are not payroll taxes — they’re insurance benefits you’re required to provide for your employees.

Instead of paying these to the state, you must set up coverage through an insurance company (a third-party provider) to stay compliant with NY law.

See Also:

• NY State Disability Insurance (SDI) Additional Resources

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How NY State Disability Insurance (SDI) Works

New York requires employers to have disability insurance for employees who can’t work due to illness or injury that’s not job-related.

You have two options:

• Pay the full cost of the insurance yourself, or
• Share the cost with your employees by taking a small deduction from their paychecks.

If you share the cost:

You can deduct up to 0.5% of an employee’s wages, with a maximum of $0.60 per week.

Your payroll provider (like Homebase) can show these deductions on payroll, but you are responsible for paying your insurance company directly.

Any SDI deduction you see labeled as (Manual) means you need to send that payment to your carrier yourself.

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How NY Paid Family Leave (PFL) Works

Paid Family Leave helps employees take paid time off for major family needs — like bonding with a new child or caring for a sick relative.

PFL is usually funded by employees through small payroll deductions, although employers can choose to pay the full cost if they want.

If you deduct from employee pay:

You can withhold 0.455% of each employee’s gross wages, up to a maximum of $399.43 per year.

Again, your payroll provider can calculate and withhold these amounts, but you must pay the insurance company directly for the policy.

Any PFL deduction marked (Manual) means you’ll need to send that payment to your insurance carrier yourself.

See Also:

• NY Paid Family Leave (PFL) Additional Resources

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How to Set Up Your Policies

Since New York doesn’t run these programs directly, you’ll need to get your own policies from a private insurance company that meets NY’s requirements.

You can choose any licensed carrier that offers:

• State Disability Insurance (SDI) coverage (see here), and
• Paid Family Leave (PFL) coverage (see here).

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What Homebase Handles (and What You Handle)

Homebase will:

• Calculate and deduct the correct SDI and PFL amounts from employee paychecks.
• Keep those deducted amounts in your company’s bank account after payroll runs.

You will need to:

• Pay your insurance provider directly for your SDI and PFL premiums.
• Include both your share and any amounts withheld from employees.

Note: Homebase does not send SDI or PFL payments to insurance companies.

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Quick Summary

What	Who Handles It	How It’s Paid
SDI & PFL deductions	Homebase	Shown in payroll as “Manual”
Paying insurance company	You (the employer)	Send payment directly
Choosing an insurance carrier	You	Must meet NY state requirements