What Does FED OASDI/EE Mean on Your Pay Stub?

When reviewing your pay stub, you might notice various deductions, one of which commonly appears as “FED OASDI/EE.” This line item represents a mandatory federal payroll tax that contributes to the Social Security program.

Deciphering OASDI

The acronym “OASDI” stands for Old-Age, Survivors, and Disability Insurance, the official name for the U.S. Social Security program. This federal program offers income support to eligible individuals and their families. The “FED” in “FED OASDI/EE” indicates this is a federal tax.

The Social Security program was established by the Social Security Act in 1935. It provided a federal safety net during widespread economic hardship. This system collects contributions from workers to fund benefits, partially replacing income lost due to retirement, disability, or the death of a wage earner.

The Employee’s Share

The “EE” in “FED OASDI/EE” denotes the employee’s portion of this tax. This deduction is part of the Federal Insurance Contributions Act (FICA) tax, which also includes Medicare taxes. For most employees, this is a mandatory withholding from their gross wages.

The employee’s contribution to OASDI is calculated at a rate of 6.2% of their taxable wages. This rate is applied to earnings up to an annual wage base limit. For example, in 2025, the wage base limit is $176,100, meaning any earnings above this amount are not subject to the OASDI tax for that year. This limit is adjusted annually to account for changes in the national average wage index.

Purpose of the Contribution

The funds collected through OASDI contributions serve to finance the benefits provided by the Social Security program. These benefits fall into three main categories. First, Old-Age benefits provide retirement income to eligible workers and their dependents, offering partial income replacement in retirement.

Second, Survivors benefits offer financial support to eligible family members of deceased workers (spouses, children, and dependent parents). This provides financial continuity for families who have lost a primary wage earner. Third, Disability benefits provide income to workers who become unable to work due to a physical or mental impairment, if they meet eligibility criteria.

Employer’s Role in OASDI

Employers play a role in funding the OASDI program. They are required to contribute a matching amount to the employee’s deduction. This means employers pay an additional 6.2% of an employee’s taxable wages into the OASDI fund. This employer contribution is separate from your paycheck withholding but goes to the same Social Security system.