What Is Federal OASDI/EE Withholding?

Federal OASDI/EE withholding is a mandatory payroll tax deducted from an employee’s gross wages. This tax serves as the employee’s contribution to the Social Security system. Its primary purpose is to fund essential benefits for eligible retirees, survivors of deceased workers, and individuals facing disabilities. The amount withheld directly supports these federal programs, ensuring a financial safety net for millions of Americans.

Understanding OASDI

OASDI stands for Old-Age, Survivors, and Disability Insurance, the official name for the federal Social Security program. This comprehensive program provides financial support to individuals who have lost income due to retirement, disability, or the death of a working family member. The Social Security Administration (SSA) is responsible for administering the OASDI program.

The Old-Age component of OASDI provides retirement benefits to eligible workers once they reach a certain age and have accumulated sufficient work credits. The Survivors Insurance provides financial assistance to dependents of deceased workers, such as spouses and children. The Disability Insurance component offers benefits to workers who become unable to work due to a severe physical or mental disability.

Employee Withholding Mechanics

The employee’s share of OASDI tax is 6.2% of their gross wages for 2025. This rate applies up to a certain annual limit, known as the “wage base limit” or “taxable maximum.”

For earnings in 2025, the Social Security wage base limit is $176,100. Employees pay OASDI tax only on earnings up to this amount within a calendar year. Once cumulative earnings reach this limit, no further OASDI tax is withheld for the remainder of the year. For example, if an employee earns $5,000 in a pay period and their year-to-date earnings are below the wage base limit, $310 ($5,000 x 0.062) will be withheld for OASDI. If their year-to-date earnings then exceed the limit, the withholding will stop or be adjusted accordingly for subsequent paychecks.

Reporting Your Withholding

Employees can review their federal OASDI withholding on their paystubs. This deduction is labeled as “SS,” “Social Security,” or “OASDI” and indicates the amount withheld for that specific pay period. Many paystubs also show a year-to-date total for these withholdings.

At the end of each calendar year, employers provide employees with a Form W-2, Wage and Tax Statement. This form summarizes annual earnings and taxes withheld. The total annual federal OASDI wages are reported in Box 3 of Form W-2, while the actual amount of Social Security tax withheld for the year is shown in Box 4.

Employer’s Role in Withholding

Employers have an obligation to withhold OASDI tax from their employees’ wages. This ensures employees contribute their share to the Social Security system. Employers are also responsible for matching the employee’s contribution.

For 2025, employers contribute an additional 6.2% of the employee’s wages to OASDI, matching the employee’s portion. This effectively doubles the total contribution to the Social Security program for each employee. Employers must then remit both the employee’s withheld share and their own matching share to the U.S. Treasury on a regular schedule.