What Is the FED OASDI/EE Tax on My Pay Stub?

One common deduction is labeled “FED OASDI/EE.” This refers to a federal payroll tax withheld from an employee’s gross wages. The acronym stands for Federal Old-Age, Survivors, and Disability Insurance, with “EE” specifically indicating the employee’s contribution. This deduction represents a mandatory contribution to a social insurance program.

Understanding Social Security (OASDI)

The “OASDI” portion of this tax stands for Old-Age, Survivors, and Disability Insurance, which is the formal name for the Social Security program. This program serves as a broad financial safety net, providing income security during significant life events.

Social Security primarily funds three main types of benefits. Old-Age benefits provide payments to retired workers and their eligible spouses and dependents, offering financial support during retirement years. Survivors benefits offer financial assistance to the families of deceased workers, including spouses, children, and dependent parents, helping them maintain economic stability after the loss of a breadwinner. Disability benefits are provided to workers who are unable to engage in substantial gainful activity due to a severe medical condition, ensuring a source of income when they cannot work.

Employee Contributions

The “EE” in FED OASDI/EE highlights the employee’s share of this federal tax. Employers are responsible for withholding this amount directly from an employee’s gross wages each pay period. These withheld funds are then remitted to the Internal Revenue Service (IRS).

This deduction is typically visible on an employee’s pay stub, commonly appearing under labels such as “Social Security,” “OASDI,” or sometimes as part of “FICA,” which encompasses both Social Security and Medicare taxes. The total annual contributions made by an employee to OASDI are reported on their Form W-2, Wage and Tax Statement, specifically in Box 4.

Contribution Rates and Wage Base Limits

For 2025, the employee’s Social Security tax rate is 6.2% of their gross wages. This rate is applied to earnings up to a specific annual threshold known as the “wage base limit” or “taxable maximum,” which represents the maximum amount of earnings subject to the Social Security tax in a given year.

For earnings in 2025, the wage base limit is $176,100. This means that any income earned above this amount within the calendar year is not subject to the 6.2% OASDI tax.

The wage base limit is subject to annual adjustments based on changes in the national average wage index, which can lead to variations in the maximum taxable earnings from one year to the next. For example, an employee earning $200,000 in 2025 would only pay Social Security tax on the first $176,100 of their income.