Workers in Washington and California will see a larger paid leave deduction on their first paychecks of 2027. Washington’s paid family and medical leave premium rises to 1.2% of wages on Jan. 1, up from 1.13%. California’s State Disability Insurance withholding rate rises to 1.4%, up from 1.3%.
Both increases are automatic. Employers adjust the payroll deduction, and workers do not file anything or sign up. New York and Massachusetts are also moving paid leave numbers in January, though their changes show up mainly in benefit checks.
Washington moves to a 1.2% premium
The Washington Employment Security Department announced the new rate in an Oct. 16 news release. The premium rate will be 1.2% starting Jan. 1, 2027, compared with 1.13% this year. Employers keep using the 2026 rate for the third and fourth quarters of 2026.
The premium is split between the two sides of the payroll. Employers will pay 29.3% of the total premium and employees will pay 70.7%. By that math, a worker’s share comes to about 0.85% of wages, or roughly $8.48 for every $1,000 earned. On $50,000 in covered wages, that works out to about $424 a year, and the employer pays the other 29.3% of the premium on top of the worker’s share. Those dollar figures are calculated from the department’s percentages, not quoted from it.
The department’s release gives the new total rate and the new split, but not a dollar figure for each paycheck. Workers can check the 1.2% rate and the 29.3% and 70.7% shares against their first pay stub of the year, and ask the payroll office if the numbers differ.
Anyone still working in Washington or California has one thing to look at: the paid leave line on the first January pay stub. No form or sign-up is needed, since the deduction is automatic. A part-time job, a bridge job before retirement or a second income is covered the same way as a full-time salary, because the deduction follows wages.
Stay ahead of government payment news: Miss an enrollment or claim deadline and the money can be gone. Join the Retirement Money Brief and we’ll send you our 2026 Government Check Reality Tracker as a welcome gift.
Get the Brief + the check tracker →
We may earn a commission from links on this page.
California’s SDI rate goes to 1.4%
The California Employment Development Department lists the 2027 SDI withholding rate at 1.4 percent. The 2026 rate is 1.3 percent, and the department’s history shows 1.2 percent for 2025 and 1.1 percent for 2024. The rate has climbed every year since 2024.
California workers pay on all of their wages. The department notes that since Jan. 1, 2024, Senate Bill 951 has removed the taxable wage limit, so there is no ceiling on the amount subject to SDI withholding. Higher earners pay more as their pay rises.
The dollar difference is small per paycheck but real over a year. At 1.3 percent, a worker earning $50,000 has $650 withheld. At 1.4 percent, the same worker has $700 withheld, which is $50 more. On $80,000 the figures are $1,040 and $1,120, an increase of $80.
The department’s own history makes the trend plain. California’s withholding rate has gone from 1.1 percent to 1.4 percent in four years, which is an extra $3 for every $1,000 earned. On a $50,000 salary, that is $150 more a year than workers paid in 2024.
New York and Massachusetts raise benefit levels
New York’s paid family leave program lists a 2027 maximum weekly benefit of $1,287.91, up $59.38. Employees there will contribute 0.452% of their gross wages per pay period, with a yearly cap of $451.81, according to the state. The New York Department of Financial Services published the same contribution figures in its rate decision on Aug. 31.
Massachusetts, which runs its own paid family and medical leave system, sets its maximum weekly benefit at $1,284.61 in 2027, up from $1,230.39 in 2026. That is an increase of $54.22 a week for workers who reach the top of the scale.
The two benefit numbers come out within a few dollars of each other. A worker who takes the full weekly maximum in either state would collect a little under $1,300 a week before taxes.
Neither state’s weekly maximum changes what comes out of a paycheck on its own. Washington and California are the two states where the published change is on the deduction side, which is why their workers are the ones who will notice a smaller take-home amount in January.
Why the January change is easy to miss
Payroll deductions for paid leave rise by a tenth of a percentage point or less, and nobody has to approve them. California’s step from 1.3 percent to 1.4 percent costs a worker $1 more for every $1,000 earned. Washington’s step from 1.13% to 1.2% works the same way, in smaller pieces.
Taken one at a time, those changes rarely get a second look. Together with other January adjustments, such as new health plan premiums and tax withholding, they set the size of the take-home pay that workers have to budget around for the year.
The rates come from the state agencies themselves. Washington’s department set 1.2%, California’s department set 1.4 percent, and New York set 0.452%. Workers who want the exact figure for an employer’s payroll can check the first pay stub of 2027 against those numbers.
Which paycheck line changes on Jan. 1?
A paid leave deduction that rises by a fraction of a percent costs a worker $50 to $80 a year on a $50,000 to $80,000 salary, and it arrives with no bill and no warning. Small leaks like that are easy to miss, and they add up across taxes, Medicare costs, house costs and scams.
The Keep-It Starter Bundle puts nine guides in one download, one per money leak, including how to cut the tax bill: the senior deduction, RMDs, QCDs and the Roth window. Each of the 95 pages is meant for a single afternoon of moves.
Get nine money-leak guides to offset the paid leave deduction →
This article was produced with AI assistance and edited for accuracy against the sources linked above.
