What Is FED OASDI/EE on a Paycheck?

Many individuals encounter the term “FED OASDI/EE” on their pay stubs and may not fully understand its meaning or purpose. This deduction represents a contribution to a federal program designed to provide financial security. This article aims to clarify what this line item signifies and its importance.

Decoding OASDI/EE

The acronym “OASDI” stands for Old-Age, Survivors, and Disability Insurance, the official name for the federal Social Security program. This program serves as a social insurance system, providing financial assistance. The “EE” component of “OASDI/EE” specifically denotes the “Employee Share” or “Employee Contribution.” This indicates the portion of the OASDI tax that is directly withheld from an individual’s gross wages. These elements represent a mandatory contribution.

How Contributions Work

OASDI contributions are part of the Federal Insurance Contributions Act (FICA) taxes, which also include Medicare taxes. Funding for OASDI involves a shared responsibility between employees and their employers. For 2025, the OASDI tax rate is set at 6.2% for employees and an equal 6.2% for employers, making a combined total of 12.4% on an employee’s earnings. These contributions are applied only up to an annual wage base limit, which for 2025 is $176,100. This means any earnings above this threshold are not subject to the OASDI tax.

Individuals who are self-employed are responsible for paying both the employee and employer portions of the OASDI tax, totaling 12.4% of their net earnings. However, self-employed individuals can deduct one-half of their self-employment taxes when calculating their adjusted gross income. These payroll deductions ensure continuous funding, with employers remitting the collected amounts to the Internal Revenue Service (IRS).

The Benefits of OASDI

The OASDI program provides three main categories of benefits. Old-Age benefits, commonly known as retirement benefits, are paid to eligible workers and their families once the worker reaches a specific age and has accumulated sufficient work credits. While benefits can begin as early as age 62, the full retirement age varies based on birth year, typically ranging from 66 to 67 years old. Waiting until full retirement age or later can result in higher monthly payments.

Survivors benefits provide financial support to eligible family members of a deceased worker who earned Social Security credits. This can include widows, widowers, dependent children, and sometimes even dependent parents. These benefits help families cope with the financial loss following the death of a primary wage earner.

Disability benefits are available for eligible workers who experience severe medical conditions preventing them from engaging in substantial work. To qualify, the disability must be expected to last at least 12 months or result in death, and the individual must have sufficient work credits. These benefits offer income replacement for those unable to work due to qualifying disabilities.