California employers preparing payroll for 2027 should distinguish state UI contributions, employee SDI withholding, and federal FUTA obligations. They have different rates and rules. This update separates confirmed 2027 rates from the 2026 FUTA determination still pending as of November 4, 2026.
Confirmed State Rates for 2027
EDD’s contribution rates and withholding schedules lists Schedule F+ UI rates from 1.5% to 6.2%, with a $7,000 annual taxable wage limit per employee. The published Schedule F+ range already incorporates the emergency surcharge; do not add another 15% to that range.
The ETT rate is 0.1% on the first $7,000. SDI withholding rises to 1.4% for 2027, compared with 1.3% for 2026. SDI has no taxable wage ceiling. Distinguish employee SDI withholding from employer UI contributions when reviewing payroll.
Check the Mailing Date on DE 2088
The Notice of Contribution Rates and Statement of UI Reserve Account (DE 2088) concerns your assigned rate and reserve account. EDD’s published guidance measures the protest period as 60 days from the December 31 mailing date, rather than the day you receive it. SDI and ETT rates are set by law and excluded from that protest process.
Compare the notice with your payroll and reserve-account records. A rate protest is a different process from a payroll tax audit. Our payroll tax audit guide explains that separate review.
Keep FUTA Separate From State Rates
Federal credit reduction can increase an employer’s FUTA liability when a state has an outstanding federal unemployment loan. The Department of Labor’s FUTA credit-reduction page explains the November 10 determination point. As of this review, the final 2026 determination should not be presented as confirmed.
Recheck the official determination after November 10 before using a final credit-reduction figure in year-end payroll guidance. The IRS FUTA credit-reduction explanation describes how the reduction interacts with federal reporting.
Review Employee Notices Separately
Rate changes do not replace duties to provide employee notices and pamphlets. Use EDD’s required notices and pamphlets checklist to identify the materials relevant to a hire, separation, or leave.
Do not infer permission to email employee notices merely because SIDES or UI Online uses electronic communications. Confirm the applicable delivery and consent requirements for the particular document.
Prepare Your Records
Keep rate notices, payroll reports, employee classifications, and evidence supporting any disputed charges together. Our accounting-firm classification guide explains a related source of payroll disputes.


