What Is Fed OASDI/EE on My Paycheck?

The “FED OASDI/EE” deduction on paychecks represents a mandatory contribution to federal programs designed to offer financial security. Understanding this acronym and its impact on your take-home pay can help demystify your payroll statement. This article explains the components of this deduction, the programs it supports, and how these contributions are calculated.

What “FED OASDI/EE” Means

The “FED OASDI/EE” line on a paycheck breaks down into several parts, each signifying a specific aspect of this federal payroll tax. “FED” indicates that the deduction is a federal requirement, mandated by the United States government. The acronym “OASDI” stands for Old-Age, Survivors, and Disability Insurance, which is the official designation for Social Security. This component of the tax supports benefits for retirees, those with disabilities, and the survivors of deceased workers.

The “EE” portion of the deduction specifically denotes the “Employee” share of these taxes. These contributions are part of a larger set of payroll taxes known as the Federal Insurance Contributions Act (FICA) taxes. FICA taxes also include contributions for Medicare, which is often listed separately as “MEDICARE” or “HI” (Hospital Insurance) on pay stubs, but sometimes combined under a general “FICA” line. Regardless of how they appear on a paycheck, both Social Security and Medicare taxes are typically included as part of an individual’s FICA obligations.

The Programs Funded by These Taxes

The contributions made through FED OASDI/EE and related Medicare taxes directly fund two significant federal social insurance programs: Social Security and Medicare. Social Security, officially known as Old-Age, Survivors, and Disability Insurance, provides financial protection to millions of Americans. It offers benefits to eligible retired workers, their spouses, and children, as well as to disabled workers and their families, and survivors of deceased workers. The program aims to replace a portion of lost income due to retirement, disability, or death.

Medicare, on the other hand, is the federal health insurance program primarily for people who are aged 65 or older. It also covers certain younger people with disabilities and individuals with End-Stage Renal Disease. Medicare consists of several parts, with the Hospital Insurance (HI) portion, funded by payroll taxes, covering inpatient hospital stays, skilled nursing facility care, hospice care, and some home health services. These programs collectively form a social safety net, providing a measure of economic stability and healthcare access.

How Your Contributions Are Determined

The amount withheld for FED OASDI/EE is calculated based on an individual’s taxable wages, applying specific tax rates and wage limits. For Social Security (OASDI), the employee’s tax rate is 6.2% of their earnings. However, this tax only applies up to a certain annual income threshold, known as the Social Security taxable wage base. For 2025, this wage base limit is $176,100, meaning any earnings above this amount are not subject to the Social Security tax.

For Medicare, the employee’s tax rate is 1.45% of all earned income. There is no wage base limit for Medicare tax, so it applies to every dollar an employee earns. Additionally, an extra 0.9% Medicare tax applies to wages exceeding $200,000 for individuals, with this additional tax solely borne by the employee. When combined, the standard employee FICA tax rate for Social Security and Medicare is 7.65% (6.2% + 1.45%).

For example, if an employee earns $5,000 in a pay period and has not yet reached the Social Security wage base limit, their Social Security deduction would be $310 ($5,000 x 6.2%). Their Medicare deduction would be $72.50 ($5,000 x 1.45%), resulting in a total FICA deduction of $382.50 for that period. If the employee’s year-to-date earnings surpassed the Social Security wage base, only the Medicare tax would continue to be withheld from subsequent earnings.

The Shared Responsibility

The FICA taxes, encompassing both Social Security and Medicare contributions, represent a shared financial responsibility between employees and their employers. The “EE” on a paycheck denotes the employee’s portion of these required deductions. Employers are also mandated by federal law to contribute a matching amount for both Social Security and Medicare taxes on behalf of each employee.

This means that for every dollar an employee contributes to Social Security, their employer contributes an equal amount, also at a rate of 6.2% of the employee’s wages up to the annual wage base. Similarly, employers match the employee’s 1.45% Medicare contribution, applying to all earned income. This dual contribution system ensures a broader funding base for these federal programs, which are a mandatory part of the nation’s social safety net.