1. Administering Payroll for the United States
  2. Voluntary Plan Disability Insurance

Voluntary Plan Disability Insurance

You can provide Voluntary Plan Disability Insurance (VPDI) for employees who have opted out of the state disability plan. VPDI plans use the same taxability rules, exemptions, and self-adjustment method as the state disability insurance (SDI) plan.

However, there are some areas you should consider.

  • Changing disability plans

  • Enabling VPDI tax withholding

  • Configuring VPDI rates and wage limits

  • Configuring VPDI for individual employees

When you can change disability plans

Whether you're implementing VPDI or reverting to the state plan, you can make this switch only at the beginning of the calendar year. If you change the plan after running the first payroll of the year, you must perform the balance adjustments to move the wages and taxes to the appropriate balances.

How to enable VPDI tax withholding for your organization

You can set VPDI at these levels.

  • Payroll statutory unit (PSU)

  • Tax reporting unit (TRU)

    This overrides settings on the PSU card.

To enable VPDI for your organization:

  1. To configure this plan at the PSU level, start the Legal Entity Calculation Cards task from your implementation project.

    Use the Legal Reporting Unit Calculation Cards task to configure it at the TRU level.

  2. In Component Groups, select the California state regional node.

  3. In Calculation Component, select State Disability.

  4. Select Enterable Calculation Values on Calculation Cards.

  5. Click Create.

  6. Search for and select Default Disability Plan as the display value.

  7. In Value, select the private plan type.

  8. Click Save.

  9. Click Create again.

  10. To set the rate, search for and select one of these display values.

    • VPDI Employee Rate

    • VPDI Employer Rate

    To set the wage limit, search for and select one of these display values.

    • VPDI Employee Wage Limit

    • VPDI Employer Wage Limit

  11. Enter the rate or wage limit, and click Save.

How to configure VPDI rates and wage limits

To configure your VPDI plan:

  1. To configure the plan at the PSU level, start the Legal Entity Calculation Cards task from your implementation project.

    Use the Legal Reporting Unit Calculation Cards task to configure it at the TRU level.

  2. In Component Groups, select the California state regional node.

  3. In Calculation Component, select State Disability.

  4. Select Enterable Calculation Values on Calculation Cards.

  5. Click Create.

  6. To set the rate, search for and select one of these display values.

    • VPDI Employee Rate

    • VPDI Employer Rate

    To set the wage limit, search for and select one of these display values.

    • VPDI Employee Wage Limit

    • VPDI Employer Wage Limit

  7. Enter the rate or wage limit, and click Save.

How to configure VPDI for individual employees

You can enable or disable VPDI for individual employees by configuring their Tax Withholding card.

  1. Start the Calculation Entries task, and open the person's tax card for editing.

  2. Open the state component for editing.

  3. Identify the person as either eligible or exempt from VPDI.

  4. Save your work.