What Does OASDI Mean on My Paystub?

“OASDI” on a paystub refers to Old-Age, Survivors, and Disability Insurance, a mandatory federal payroll deduction that forms a core part of the U.S. Social Security system. This deduction helps fund programs designed to provide financial security to millions of Americans.

Understanding the OASDI Deduction

OASDI is a mandatory federal payroll tax collected under the Federal Insurance Contributions Act (FICA), often appearing alongside Medicare tax. It is the official name for what is commonly known as Social Security tax.

These contributions fund benefits for retired workers, individuals with disabilities, and surviving family members of deceased workers. Both employees and their employers are required to contribute to this tax.

How OASDI Contributions are Calculated

The mechanics of the OASDI tax involve a specific rate applied to your earnings up to a certain limit. For 2025, the OASDI tax rate is 6.2% for employees, with employers contributing a matching 6.2%, making the total contribution 12.4% of taxable wages. This tax applies only up to an annual amount known as the “wage base limit” or “taxable maximum.” For 2025, this limit is $176,100, meaning any earnings above this threshold are not subject to the OASDI tax.

For instance, an employee earning $50,000 in 2025 would have $3,100 ($50,000 x 6.2%) deducted for OASDI, with their employer contributing an equal amount. If an employee earns $200,000 in 2025, the OASDI tax would only apply to the first $176,100 of their earnings, resulting in a maximum employee contribution of $10,918.20 ($176,100 x 6.2%). Once an individual’s cumulative earnings for the year reach this wage base limit, no further OASDI tax is withheld from their paycheck for the remainder of that year.

Benefits Covered by OASDI

OASDI contributions fund three primary categories of benefits provided through the Social Security system. Old-Age benefits provide monthly income to eligible retired workers, offering a partial replacement for lost earnings. Survivors benefits offer financial support to eligible family members, such as spouses and children, of a deceased worker who contributed to Social Security.

Disability benefits are paid to individuals who are unable to work due to a severe medical condition expected to last at least 12 months or result in death. To qualify for these benefits, individuals must earn “Social Security credits” through their work history and payment of Social Security taxes. Generally, 40 credits, earned by working approximately 10 years, are required for retirement benefits, though the number of credits needed for disability benefits can vary based on age. In 2025, one credit is earned for every $1,810 in covered earnings, with a maximum of four credits obtainable per year.