What Is Federal OASDI/EE on My Paycheck?

Federal OASDI/EE on your paycheck refers to a mandatory contribution to a federal social insurance program. This deduction supports the Old-Age, Survivors, and Disability Insurance portion of Social Security, specifically representing the employee’s share. It plays a fundamental role in providing financial security for millions of Americans. Understanding this payroll deduction helps individuals comprehend how their earnings contribute to broader social safety nets. The system is designed to pool contributions from current workers to fund benefits for eligible beneficiaries.

Understanding Old-Age, Survivors, and Disability Insurance

Old-Age, Survivors, and Disability Insurance (OASDI) is the official name for Social Security. Established under the Social Security Act of 1935, this program provides financial protection. It is funded through dedicated payroll taxes for eligible individuals and their families.

The “Old-Age” component provides retirement benefits to eligible workers who have contributed to the system. These benefits offer a steady income stream during retirement, helping to replace a portion of pre-retirement earnings. The amount of benefit received depends on an individual’s earnings history and the age they claim benefits.

The “Survivors” part of OASDI offers financial support to the families of deceased workers. This can include spouses, minor children, and in some cases, dependent parents. These benefits help families cope with the financial loss when a wage earner passes away.

“Disability Insurance” provides income to workers unable to perform substantial work due to a severe medical condition. To qualify, the disability must be expected to last for at least 12 months or result in death.

Employee Share of Contributions

The “EE” in federal OASDI/EE denotes the employee’s portion of this payroll tax. Employees contribute a percentage of their earnings to fund the OASDI program. For 2025, the federal OASDI tax rate for employees is 6.2% of their taxable wages.

This rate applies to an employee’s gross wages up to an annual threshold, known as the wage base limit or taxable maximum. For 2025, this limit is $176,100. Earnings above $176,100 in a calendar year are not subject to the OASDI tax.

For example, an employee earning $50,000 in 2025 would contribute $3,100 ($50,000 x 0.062) to OASDI. If an employee earns $200,000 in 2025, their contribution is capped at $10,918.20 ($176,100 x 0.062), as earnings exceeding the $176,100 wage base limit are exempt from further OASDI taxation.

Employer Share of Contributions

Employers also contribute to OASDI, matching the employee’s amount. The federal OASDI tax rate for employers is 6.2% for 2025. Employer contributions are also subject to the annual wage base limit.

For 2025, this limit is $176,100. Employers do not pay OASDI tax on any portion of an employee’s earnings exceeding this taxable maximum.

These employer contributions are distinct from the employee’s share but are directed to the same OASDI fund. Combined contributions from both employees and employers fund the Social Security program.

How Contributions Appear on Your Pay Statement

When reviewing your pay statement, federal OASDI contributions appear as a deduction from your gross wages. Common labels include “Social Security,” “SS,” or “OASDI.” Sometimes, it may be part of a broader “FICA” deduction, which stands for the Federal Insurance Contributions Act.

FICA encompasses both Social Security (OASDI) and Medicare taxes. The OASDI portion specifically funds the Old-Age, Survivors, and Disability Insurance program. Your pay stub itemizes these deductions.

These contributions are formally reported on your annual Form W-2, Wage and Tax Statement. Box 3 of Form W-2 shows your total Social Security wages for the year, which is the amount of your earnings subject to OASDI tax, up to the wage base limit. Box 4 of Form W-2 displays the total amount of Social Security tax withheld from your pay throughout the year.