What Is OASDI Withholding on My Paycheck?
Demystify a crucial payroll deduction. Learn the fundamentals of this mandatory contribution, its structure, and how to identify it on your earnings statements.
Payroll deductions are a common feature on most paychecks. One federal tax deduction, often seen on your pay statement, is for Old-Age, Survivors, and Disability Insurance, commonly known as OASDI. This mandatory contribution funds government programs that provide financial support.
Understanding OASDI Withholding
OASDI stands for Old-Age, Survivors, and Disability Insurance, which is the formal name for the program commonly known as Social Security. This program is a component of the Federal Insurance Contributions Act (FICA) tax, a federal payroll tax that both employees and employers must pay. Its primary purpose is to provide a financial safety net for millions of Americans. Funds collected through OASDI withholding support Social Security benefits paid to eligible individuals who are retired, have a qualifying disability, or are survivors of deceased workers. The program has been in place since 1935, established under the Social Security Act.
How OASDI Withholding is Calculated
OASDI withholding is determined by applying a tax rate to your gross wages, up to an annual limit. For 2025, the OASDI tax rate for employees is 6.2% of their taxable wages. Your employer also contributes an equal share, paying an additional 6.2% on your behalf, bringing the total contribution to 12.4% of your wages.
The annual wage base limit is the maximum amount of earnings subject to OASDI tax each year. For 2025, this limit is $176,100. This means that any earnings above this threshold are not subject to the OASDI tax. For instance, if you earn $200,000 in 2025, you will only pay OASDI tax on the first $176,100 of your income. The maximum OASDI tax an employee would pay in 2025 is $10,918.20 ($176,100 multiplied by 6.2%).
Where OASDI Appears on Your Paycheck and Tax Forms
Identifying OASDI withholding on your pay stub is straightforward, though the exact label may vary. Common abbreviations include “OASDI,” “SS,” “Social Security,” or “Fed OASDI/EE.” This line item indicates the amount of Old-Age, Survivors, and Disability Insurance tax deducted from your gross pay for that specific pay period. This deduction is a direct reflection of your contribution to the federal Social Security program.
At the end of the year, your employer reports your total wages and withheld taxes on Form W-2, Wage and Tax Statement. For OASDI, two boxes on your W-2 are relevant. Box 3, labeled “Social Security wages,” reports the total amount of your wages subject to the OASDI tax, up to the annual wage base limit. Box 4, “Social Security tax withheld,” shows the actual amount of OASDI tax withheld from your pay throughout the year.