What Is Fed OASDI/EE on a Paycheck?

When you look at your paycheck, you might notice a deduction labeled “Fed OASDI/EE.” This represents your contribution to the federal Social Security program, specifically the employee’s portion of the Old-Age, Survivors, and Disability Insurance tax. This mandatory payroll deduction helps fund current and future benefits.

Understanding Old-Age, Survivors, and Disability Insurance (OASDI)

OASDI stands for Old-Age, Survivors, and Disability Insurance, forming the core of the U.S. Social Security system. This program provides financial support to millions of Americans, offering retirement benefits to qualified workers and their spouses. It also extends protections to surviving family members, such as spouses and children, after a worker’s death.

OASDI also provides disability benefits to individuals unable to work due to a severe medical condition. This social insurance program uses contributions from current workers to fund benefits for current retirees, survivors, and disabled individuals. It offers economic security across various life stages.

The Employee Contribution (EE)

The “EE” in Fed OASDI/EE indicates the employee’s contribution to this federal program, directly withheld from your gross pay. For 2025, the standard employee tax rate for OASDI is 6.2% of your gross wages. This tax applies to earnings up to an annual limit, known as the Social Security wage base.

For 2025, the Social Security wage base limit is $176,100. Once your earnings reach this amount, OASDI tax is no longer withheld from additional wages for the remainder of the calendar year. For example, an individual earning $176,100 or more in 2025 would contribute a maximum of $10,918.20 ($176,100 x 6.2%).

Why OASDI/EE is Deducted

The deduction of OASDI/EE from your paycheck is mandatory for most employees under the Federal Insurance Contributions Act (FICA). This federal law requires both employees and employers to contribute to Social Security and Medicare. These contributions are a legal requirement for most forms of employment.

Your contributions, along with those of your employer, are recorded under your Social Security number. These earnings records determine your eligibility for various Social Security benefits, including retirement, disability, and survivor benefits. Employers also contribute a matching 6.2% portion for OASDI, totaling 12.4% of your wages up to the annual limit.

How Your OASDI/EE Contributions Are Used

Collected OASDI taxes are not held in individual accounts for your future use. Instead, these funds are deposited into specific Social Security trust funds: the Old-Age and Survivors Insurance (OASI) Trust Fund and the Disability Insurance (DI) Trust Fund. The money in these funds primarily pays current Social Security beneficiaries.

This means contributions from today’s workers fund benefits for today’s retirees, survivors, and individuals with disabilities. This pay-as-you-go system ensures funds are immediately available to support those currently eligible for benefits. The Social Security Administration manages these funds.