So there should be no SDI deductions withheld from lump sum payments. This includes lump sum payments for vacation cash out or 401(k) plans.The California State Disability Insurance (SDI) program provides short-term Disability Insurance (DI) and Paid Family Leave (PFL) wage replacement benefits. When employees fill out information for CASDI on their W2 form, they must enter the dollar amount withheld in Box 14. Security Taxable Wage Base. Download an application below, call (408) 758-3800 to get an application mailed or pick it up in one of our lobbies. These taxes are also called SDI contributions. Example. If you're like most employees in California, you have State Disability Insurance (SDI) taxes automatically taken out of your paycheck. No longer than 7 business days after the payment is withheld. Mandatory deductions.